Exhibit 10.4

 

SECURITY AND PLEDGE AGREEMENT

 

THIS SECURITY AND PLEDGE AGREEMENT (this “Agreement”) is entered into as of
October 7, 2011 among STR HOLDINGS, INC., a Delaware corporation (the
“Borrower”), the other parties identified as “Obligors” on the signature
pages hereto and such other parties that may become Obligors hereunder after the
date hereof (together with the Borrower, individually an “Obligor”, and
collectively the “Obligors”) and BANK OF AMERICA, N.A., in its capacity as
administrative agent (in such capacity, the “Administrative Agent”) for the
holders of the Secured Obligations (defined below).

 

RECITALS

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of the date hereof
(as amended, modified, supplemented, increased, extended, restated, renewed,
refinanced or replaced from time to time, the “Credit Agreement”) among the
Borrower, the Guarantors identified therein, the Lenders identified therein and
the Administrative Agent, the Lenders have agreed to make Loans and issue
Letters of Credit upon the terms and subject to the conditions set forth
therein; and

 

WHEREAS, this Agreement is required by the terms of the Credit Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.                                       Definitions.

 

(a)                                  Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms shall have the meanings set forth in the UCC
(defined below):  Accession, Account, Adverse Claim, As-Extracted Collateral,
Chattel Paper, Commercial Tort Claim, Consumer Goods, Deposit Account, Document,
Electronic Chattel Paper, Equipment, Farm Products, Financial Asset, Fixture,
General Intangible, Goods, Instrument, Inventory, Investment Company
Security, Investment Property, Letter-of-Credit Right, Manufactured Home, Money,
Proceeds, Securities Account, Security Entitlement, Securities Intermediary,
Security, Software, Supporting Obligation and Tangible Chattel Paper.

 

(b)                                 In addition, the following terms shall have
the meanings set forth below:

 

“Collateral” has the meaning provided in Section 2 hereof.

 

“Copyright License” means any written agreement, naming any Obligor as licensor,
granting any right under any Copyright.

 

“Copyrights” means (a) all registered United States copyrights in all Works, now
existing or hereafter created or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, registrations, recordings and applications in the United States
Copyright Office, and (b) all renewals thereof.

 

“Patent License” means any agreement, whether written or oral, providing for the
grant by or to an Obligor of any right to manufacture, use or sell any invention
covered by a Patent.

 

“Patents” means (a) all letters patent of the United States or any other country
and all reissues and extensions thereof, and (b) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof.

 

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“Pledged Equity” means, with respect to each Obligor, (i) 100% of the issued and
outstanding Equity Interests of each Domestic Subsidiary of the Borrower that is
directly owned by such Obligor and (ii) 66% (or such greater percentage that,
due to a change in an applicable Law after the date hereof, (A) could not
reasonably be expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary’s United States parent
and (B) could not reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding Equity Interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Equity Interests not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary of the Borrower
that is directly owned by such Obligor, including the Equity Interests of the
Subsidiaries owned by such Obligor as set forth on Schedule 1(b) hereto, in each
case together with the certificates (or other agreements or instruments), if
any, representing such shares, and all options and other rights, contractual or
otherwise, with respect thereto, including, but not limited to, the following:

 

(1)                                  all Equity Interests representing a
dividend thereon, or representing a distribution or return of capital upon or in
respect thereof, or resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants, rights or options
issued to the holder thereof, or otherwise in respect thereof; and

 

(2)                                  in the event of any consolidation or merger
involving the issuer thereof and in which such issuer is not the surviving
Person, all shares of each class of the Equity Interests of the successor Person
formed by or resulting from such consolidation or merger, to the extent that
such successor Person is a direct Subsidiary of an Obligor.

 

“Secured Obligations” means, without duplication, (a) all Obligations and
(b) all costs and expenses incurred in connection with enforcement and
collection of the Obligations, including the reasonable fees, charges and
disbursements of counsel.

 

“Trademark License” means any agreement, written or oral, providing for the
grant by or to an Obligor of any right to use any Trademark.

 

“Trademarks” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any other country or any political
subdivision thereof, or otherwise and (b) all renewals thereof.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
state of New York except as such term may be used in connection with the
perfection of the Collateral and then the applicable jurisdiction with respect
to such affected Collateral shall apply.

 

“Work” means any work that is subject to copyright protection pursuant to Title
17 of the United States Code.

 

2.                                       Grant of Security Interest in the
Collateral.  To secure the prompt payment and performance in full when due,
whether by lapse of time, acceleration, mandatory prepayment or otherwise, of
the Secured

 

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Obligations, each Obligor hereby grants to the Administrative Agent, for the
benefit of the holders of the Secured Obligations, a continuing security
interest in, and a right to set off against, any and all right, title and
interest of such Obligor in and to all of the following, whether now owned or
existing or owned, acquired, or arising hereafter (collectively, the
“Collateral”):  (a) all Accounts; (b) all Chattel Paper; (c) those certain
Commercial Tort Claims set forth on Schedule 2(c) hereto; (d) all Copyrights;
(e) all Copyright Licenses; (f) all Deposit Accounts; (g) all Documents; (h) all
Equipment; (i) all Fixtures; (j) all General Intangibles; (k) all Instruments;
(l) all Inventory; (m) all Investment Property; (n) all Letter-of-Credit Rights;
(o) all Money; (p) all Patents; (q) all Patent Licenses; (r) all Pledged Equity;
(s) all Software; (t) all Supporting Obligations; (u) all Trademarks; (v) all
Trademark Licenses; and (w) all Accessions and all Proceeds of any and all of
the foregoing.

 

Notwithstanding anything to the contrary contained herein, the security
interests granted under this Agreement shall not extend to (i) any Equity
Interests in Subsidiaries of the Borrower other than Pledged Equity; (ii) any
property which, subject to the terms of Section 8.09 of the Credit Agreement, is
subject to a Lien of the type described in Section 8.01(i) of the Credit
Agreement pursuant to documents which prohibit such Obligor from granting any
other Liens in such property and (iii) any General Intangible, permit, lease,
license, contract or other Instrument of an Obligor to the extent the grant of a
security interest in such General Intangible, permit, lease, license, contract
or other Instrument in the manner contemplated by this Agreement, under the
terms thereof or under applicable Law, is prohibited and would result in the
termination thereof or give the other parties thereto the right to terminate,
accelerate or otherwise alter such Obligor’s rights, titles and interests
thereunder (including upon the giving of notice or the lapse of time or both);
provided that (a) any such limitation described in the foregoing clause (iii) on
the security interests granted hereunder shall only apply to the extent that any
such prohibition could not be rendered ineffective pursuant to the UCC or any
other applicable Law (including Debtor Relief Laws) or principles of equity and
(b) in the event of the termination or elimination of any such prohibition or
the requirement for any consent contained in any applicable Law, General
Intangible, permit, lease, license, contract or other Instrument, to the extent
sufficient to permit any such item to become Collateral hereunder, or upon the
granting of any such consent, or waiving or terminating any requirement for such
consent, a security interest in such General Intangible, permit, lease, license,
contract or other Instrument shall be automatically and simultaneously granted
hereunder and shall be included as Collateral hereunder.

 

The Obligors and the Administrative Agent, on behalf of the holders of the
Secured Obligations, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral security
for all of the Secured Obligations, whether now existing or hereafter arising
and (ii) is not to be construed as an assignment of any Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.

 

3.                                       Representations and Warranties.  Each
Obligor hereby represents and warrants to the Administrative Agent, for the
benefit of the holders of the Secured Obligations, that:

 

(a)                                  Ownership.  Each Obligor is the legal and
beneficial owner of its Collateral and has the right to pledge, sell, assign or
transfer the same.  There exists no Adverse Claim with respect to the Pledged
Equity of such Obligor.

 

(b)                                 Security Interest/Priority.  This Agreement
creates a valid security interest in favor of the Administrative Agent, for the
benefit of the holders of the Secured Obligations, in the Collateral of such
Obligor and, when properly perfected by filing, shall constitute a valid and
perfected, first priority security interest in such Collateral (including all
uncertificated Pledged Equity consisting of partnership or limited liability
company interests that do not constitute Securities), to the extent such
security interest can be perfected by filing under the UCC, free and clear of
all Liens except for Permitted Liens.  The taking possession by the
Administrative Agent

 

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of the certificated securities (if any) evidencing the Pledged Equity of
Domestic Subsidiaries and all other Instruments constituting Collateral will
perfect and establish the first priority of the Administrative Agent’s security
interest in all the Pledged Equity of Domestic Subsidiaries evidenced by such
certificated securities and such Instruments.  With respect to any Collateral
consisting of a Deposit Account, Security Entitlement or held in a Securities
Account, upon execution and delivery by the applicable Obligor, the applicable
Securities Intermediary and the Administrative Agent of an agreement granting
control to the Administrative Agent over such Collateral, the Administrative
Agent shall have a valid and perfected, first priority security interest in such
Collateral.

 

(c)                                  Types of Collateral.  None of the
Collateral consists of, or is the Proceeds of, As-Extracted Collateral, Consumer
Goods, Farm Products, Manufactured Homes or standing timber.

 

(d)                                 Equipment and Inventory.  With respect to
any Equipment and/or Inventory of an Obligor, each such Obligor has exclusive
possession and control of such Equipment and Inventory of such Obligor except
for (i) Equipment leased by such Obligor as a lessee or (ii) Equipment or
Inventory in transit with common carriers.  Except as set forth on Schedule
3(d) hereto, no Inventory of an Obligor is held by a Person other than an
Obligor pursuant to consignment, sale or return, sale on approval or similar
arrangement.

 

(e)                                  Authorization of Pledged Equity.  All
Pledged Equity is duly authorized and validly issued, is fully paid and, to the
extent applicable, nonassessable and is not subject to the preemptive rights of
any Person.

 

(f)                                    No Other Equity
Interests, Instruments, Etc.   As of the Closing Date, (i) no Obligor owns any
certificated Equity Interests in any Subsidiary that are required to be pledged
and delivered to the Administrative Agent hereunder except as set forth on
Schedule 1(b) hereto, and (ii) no Obligor holds any Instruments, Documents or
Tangible Chattel Paper required to be pledged and delivered to the
Administrative Agent pursuant to Section 4(a)(i) of this Agreement other than as
set forth on Schedule 3(f) hereto.  All such certificated
securities, Instruments, Documents and Tangible Chattel Paper have been
delivered to the Administrative Agent.

 

(g)                                 Partnership and Limited Liability Company
Interests.  Except as previously disclosed to the Administrative Agent, none of
the Collateral consisting of an interest in a partnership or a limited liability
company (i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a Security governed by
Article 8 of the UCC, (iii) is an Investment Company Security, (iv) is held in a
Securities Account or (v) constitutes a Security or a Financial Asset.

 

(h)                                 Intentionally Omitted.

 

(i)                                     Consents; Etc.  There are no
restrictions in any Organization Document governing any Pledged Equity or any
other document related thereto which would limit or restrict (i) the grant of a
Lien pursuant to this Agreement on such Pledged Equity, (ii) the perfection of
such Lien or (iii) the exercise of remedies in respect of such perfected Lien in
the Pledged Equity as contemplated by this Agreement.  Except for (i) the filing
or recording of UCC financing statements, (ii) the filing of appropriate notices
with the United States Patent and Trademark Office and the United States
Copyright Office, (iii) obtaining control to perfect the Liens created by this
Agreement (to the extent required under Section 4(a) hereof), (iv) such actions
as may be required by Laws affecting the offering and sale of securities,
(v) such actions as may be required by applicable foreign Laws affecting the
pledge of the Pledged Equity of Foreign Subsidiaries and (vi) consents,
authorizations,

 

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filings or other actions which have been obtained or made, no consent or
authorization of, filing with, or other act by or in respect of, any arbitrator
or Governmental Authority and no consent of any other Person (including, without
limitation, any stockholder, member or creditor of such Obligor), is required
for (A) the grant by such Obligor of the security interest in the Collateral
granted hereby or for the execution, delivery or performance of this Agreement
by such Obligor, (B) the perfection of such security interest (to the extent
such security interest can be perfected by filing under the UCC, the granting of
control (to the extent required under Section 4(a) hereof) or by filing an
appropriate notice with the United States Patent and Trademark Office or the
United States Copyright Office) or (C) the exercise by the Administrative Agent
or the holders of the Secured Obligations of the rights and remedies provided
for in this Agreement.

 

(j)                                     Commercial Tort Claims.  As of the
Closing Date, no Obligor has commenced legal action with respect to any
Commercial Tort Claim seeking damages in excess of $1,000,000 other than as set
forth on Schedule 2(c) hereto.

 

(k)                                  Copyrights, Patents and Trademarks.

 

(i)                                     To the best of each Obligor’s knowledge,
each Copyright, Patent and Trademark of such Obligor is valid, subsisting,
unexpired, enforceable and has not been abandoned.

 

(ii)                                  To the best of each Obligor’s knowledge,
no holding, decision or judgment has been rendered by any Governmental Authority
that would limit, cancel or question the validity of any Copyright, Patent or
Trademark of any Obligor.

 

(iii)                               No action or proceeding is pending seeking
to limit, cancel or question the validity of any Copyright, Patent or Trademark
of any Obligor, or that, if adversely determined, could reasonably be expected
to have a material adverse effect on the value of any Copyright, Patent or
Trademark of any Obligor.

 

(iv)                              All applications pertaining to the Copyrights,
Patents and Trademarks of each Obligor have been duly and properly filed, and
all registrations or letters pertaining to such Copyrights, Patents and
Trademarks have been duly and properly filed and issued.

 

(v)                                 No Obligor has made any assignment or
agreement in conflict with the security interest in the Copyrights, Patents or
Trademarks of any Obligor hereunder.

 

4.                                       Covenants. Each Obligor covenants that
until such time as the Secured Obligations arising under the Loan Documents have
been paid in full (other than contingent indemnifications for which no claim has
been made) and the Commitments have expired or been terminated, such Obligor
shall:

 

(a)                                  Instruments/Chattel Paper/Pledged
Equity/Control.

 

(i)  If any amount payable under or in connection with any of the Collateral
shall be or become evidenced by any Instrument or Tangible Chattel Paper
individually having an amount in excess of $1,000,000, or if any property
constituting Collateral having a value exceeding $1,000,000 in any single
transaction shall be stored or shipped subject to a Document, ensure that such
Instrument, Tangible Chattel Paper or Document is either in the possession of
such Obligor at all times or, if requested by the Administrative Agent to
perfect its security interest in such Collateral, is delivered to the
Administrative Agent duly endorsed in a manner satisfactory to the
Administrative Agent.  Such Obligor shall ensure

 

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that any Collateral consisting of Tangible Chattel Paper individually having an
amount in excess of $1,000,000 is marked with a legend acceptable to the
Administrative Agent indicating the Administrative Agent’s security interest in
such Tangible Chattel Paper.

 

(ii)  Deliver to the Administrative Agent promptly upon the receipt thereof by
or on behalf of an Obligor, all certificates and instruments constituting
Pledged Equity.  Prior to delivery to the Administrative Agent, all such
certificates constituting Pledged Equity shall be held in trust by such Obligor
for the benefit of the Administrative Agent pursuant hereto.  All such
certificates representing Pledged Equity shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in
Exhibit 4(a)(ii) hereto.

 

(iii)  Execute and deliver all agreements, assignments, instruments or other
documents as reasonably requested by the Administrative Agent for the purpose of
obtaining and maintaining control with respect to any Collateral consisting of
(i) Deposit Accounts, (ii) Investment Property (other than Pledged Equity),
(iii) Letter-of-Credit Rights and (iv) Electronic Chattel Paper.

 

(b)                                 Filing of Financing Statements,
Notices, etc.  Each Obligor shall execute and deliver to the Administrative
Agent such agreements, assignments or instruments (including affidavits,
notices, reaffirmations and amendments and restatements of existing documents,
as the Administrative Agent may reasonably request) and do all such other things
as the Administrative Agent may reasonably deem necessary or appropriate (i) to
assure to the Administrative Agent its security interests hereunder, including
(A) such instruments as the Administrative Agent may from time to time
reasonably request in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC, (B) with regard to Patents, a
Notice of Grant of Security Interest in Patents for filing with the United
States Patent and Trademark Office in the form of Exhibit 4(b)(i) hereto,
(C) with regard to Trademarks, a Notice of Grant of Security Interest in
Trademarks for filing with the United States Patent and Trademark Office in the
form of Exhibit 4(b)(ii) hereto and (D) with regard to Copyrights, a Notice of
Grant of Security Interest in Copyrights in the form of
Exhibit 4(b)(iii) hereto, (ii) to consummate the transactions contemplated
hereby and (iii) to otherwise protect and assure the Administrative Agent of its
rights and interests hereunder.  Furthermore, each Obligor also hereby
irrevocably makes, constitutes and appoints the Administrative Agent, its
nominee or any other person whom the Administrative Agent may designate, as such
Obligor’s attorney in fact with full power and for the limited purpose to sign
in the name of such Obligor any financing statements, or amendments and
supplements to financing statements, renewal financing statements, notices or
any similar documents which in the Administrative Agent’s reasonable discretion
would be necessary or appropriate in order to perfect and maintain perfection of
the security interests granted hereunder, such power, being coupled with an
interest, being and remaining irrevocable until such time as the Secured
Obligations arising under the Loan Documents have been paid in full (other than
contingent indemnifications for which no claim has been made) and the
Commitments have expired or been terminated.  Each Obligor hereby agrees that a
carbon, photographic or other reproduction of this Agreement or any such
financing statement is sufficient for filing as a financing statement by the
Administrative Agent without notice thereof to such Obligor wherever the
Administrative Agent may in its sole discretion desire to file the same.

 

(c)                                  Collateral Held by Warehouseman,
Bailee, etc.  If any Collateral having a value in excess of $2,000,000 at any
one location is at any time in the possession or control of a warehouseman,
cosignee, bailee or any agent or processor of such Obligor and the
Administrative

 

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Agent so requests (i) notify such Person in writing of the Administrative
Agent’s security interest therein, (ii) instruct such Person to hold all such
Collateral for the Administrative Agent’s account and subject to the
Administrative Agent’s instructions and (iii) use reasonable best efforts to
obtain a written acknowledgment from such Person that it is holding such
Collateral for the benefit of the Administrative Agent.

 

(d)                                 Commercial Tort Claims.  (i) Promptly
forward to the Administrative Agent an updated Schedule 2(c) listing any and all
Commercial Tort Claims by or in favor of such Obligor with respect to which any
Obligor has commenced any legal action seeking damages in excess of $1,000,000
and (ii) execute and deliver such statements, documents and notices and do and
cause to be done all such things as may be required by the Administrative Agent,
or required by Law to create, preserve, perfect and maintain the Administrative
Agent’s security interest in any Commercial Tort Claims initiated by or in favor
of any Obligor with respect to which any Obligor has commenced any legal action
seeking damages in excess of $1,000,000.

 

(e)                                  Books and Records.  Mark its books and
records (and shall cause the issuer of the Pledged Equity of such Obligor to
mark its books and records) to reflect the security interest granted pursuant to
this Agreement.

 

(f)                                    Intentionally Omitted.

 

(g)                                 Issuance or Acquisition of Equity Interests
in Partnerships or Limited Liability Companies.  Not without executing and
delivering, or causing to be executed and delivered, to the Administrative Agent
such agreements, documents and instruments as the Administrative Agent may
reasonably require, issue or acquire any Pledged Equity consisting of an
interest in a partnership or a limited liability company that (i) is dealt in or
traded on a securities exchange or in a securities market, (ii) by its terms
expressly provides that it is a Security governed by Article 8 of the UCC,
(iii) is an investment company security, (iv) is held in a Securities Account or
(v) constitutes a Security or a Financial Asset.

 

(h)                                 Intellectual Property.

 

(i)                                     Not do any act or omit to do any act
whereby any material Copyright may become invalidated and (A) not do any act, or
omit to do any act, whereby any material Copyright may become injected into the
public domain; (B) promptly upon any executive officer of any Obligor becoming
aware of the same, notify the Administrative Agent if any material Copyright may
become injected into the public domain or of any materially adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any court or tribunal in the United
States or any other country) regarding an Obligor’s ownership of any such
material Copyright or its validity; (C) take all necessary steps as it shall
deem appropriate under the circumstances, to maintain and pursue each
application (and to obtain the relevant registration) of each material Copyright
owned by an Obligor and to maintain each registration of each material Copyright
owned by an Obligor including, without limitation, filing of applications for
renewal where necessary; and (D) promptly upon any executive officer of any
Obligor becoming aware of the same, notify the Administrative Agent of any
material infringement of any material Copyright of an Obligor of which it
becomes aware and take such actions as it shall reasonably deem appropriate
under the circumstances to protect such material Copyright, including, where
appropriate, the bringing of suit for infringement, seeking injunctive relief
and seeking to recover any and all damages for such infringement.

 

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(ii)                                  Not make any assignment or agreement in
conflict with the security interest in the Copyrights of each Obligor hereunder
(except as permitted by the Credit Agreement).

 

(iii)                               (A) Continue to use each material Trademark
on each and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such material Trademark in full force free from any claim of
abandonment for non-use, (B) maintain as in the past the quality of products and
services offered under such material Trademark, (C) employ such material
Trademark with the appropriate notice of registration, if applicable, (D) not
adopt or use any mark that is confusingly similar or a colorable imitation of
such material Trademark unless the Administrative Agent, for the ratable benefit
of the holders of the Secured Obligations, shall obtain a perfected security
interest in such mark pursuant to this Agreement, and (E) not (and not permit
any licensee or sublicensee thereof to) do any act or omit to do any act whereby
any such material Trademark may become invalidated.

 

(iv)                              Not do any act, or omit to do any act, whereby
any material Patent may become abandoned or dedicated.

 

(v)                                 Promptly upon any executive officer of any
Obligor becoming aware of the same, notify the Administrative Agent and the
holders of the Secured Obligations that any application or registration relating
to any material Patent or Trademark may become abandoned or dedicated, or of any
materially adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal in any
country) regarding such Obligor ownership of any Patent or Trademark or its
right to register the same or to keep and maintain the same.

 

(vi)                              Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of each
material Patent and Trademark, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.

 

(vii)                           Promptly upon any executive officer of any
Obligor becoming aware of the same, notify the Administrative Agent and the
holders of the Secured Obligations that any material Patent or Trademark
included in the Collateral is infringed, misappropriated or diluted by a third
party and promptly sue for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution, or to take such other actions as it
shall reasonably deem appropriate under the circumstances to protect such
material Patent or Trademark.

 

(viii)      Not make any assignment or agreement in conflict with the security
interest in the Patents or Trademarks of each Obligor hereunder (except as
permitted by the Credit Agreement).

 

Notwithstanding the foregoing, the Obligors may, in their reasonable business
judgment, fail to maintain, pursue, preserve or protect any Copyright, Patent or
Trademark which is not material to their businesses.

 

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5.                                       Authorization to File Financing
Statements.  Each Obligor hereby authorizes the Administrative Agent to prepare
and file such financing statements (including continuation statements) or
amendments thereof or supplements thereto or other instruments as the
Administrative Agent may from time to time deem necessary or appropriate in
order to perfect and maintain the security interests granted hereunder in
accordance with the UCC (including authorization to describe the Collateral as
“all personal property”, “all assets” or words of similar meaning; provided,
that it is understood that such authorization does not expand the security
interested granted pursuant to Section 2 and all exclusions set forth in the
second paragraph of Section 2 continue to apply).

 

6.                                       Advances.  On failure of any Obligor to
perform any of the covenants and agreements contained herein or in any other
Loan Document, the Administrative Agent may, at its sole option and in its sole
discretion, perform the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of the
security hereof or which may be compelled to make by operation of Law.  All such
sums and amounts so expended shall be repayable by the Obligors on a joint and
several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the Default Rate.  No such performance of any
covenant or agreement by the Administrative Agent on behalf of any Obligor, and
no such advance or expenditure therefor, shall relieve the Obligors of any
Default or Event of Default.  The Administrative Agent may make any payment
hereby authorized in accordance with any bill, statement or estimate procured
from the appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by an Obligor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

 

7.                                       Remedies.

 

(a)                                  General Remedies.  During the continuance
of an Event of Default, the Administrative Agent shall have, in addition to the
rights and remedies provided herein, in the Loan Documents, in any other
documents relating to the Secured Obligations, or by Law (including, but not
limited to, levy of attachment, garnishment and the rights and remedies set
forth in the UCC of the jurisdiction applicable to the affected Collateral), the
rights and remedies of a secured party under the UCC (regardless of whether the
UCC is the law of the jurisdiction where the rights and remedies are asserted
and regardless of whether the UCC applies to the affected Collateral), and
further, the Administrative Agent may, with or without judicial process or the
aid and assistance of others, (i) enter on any premises on which any of the
Collateral may be located and, without resistance or interference by the
Obligors, take possession of the Collateral, (ii) dispose of any Collateral on
any such premises, (iii) require the Obligors to assemble and make available to
the Administrative Agent at the expense of the Obligors any Collateral at any
place and time designated by the Administrative Agent which is reasonably
convenient to both parties, (iv) remove any Collateral from any such premises
for the purpose of effecting sale or other disposition thereof, and/or
(v) without demand and without advertisement, notice, hearing or process of law,
all of which each of the Obligors hereby waives to the fullest extent permitted
by Law, at any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale (which in the case of a private sale
of Pledged Equity, shall be to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for their own
account, for investment and not with a view to the distribution or resale
thereof), at any exchange or broker’s board or elsewhere, by one or more
contracts, in one or more parcels, for Money, upon credit or otherwise, at such
prices and upon such

 

9

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terms as the Administrative Agent deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). Each Obligor acknowledges
that any such private sale may be at prices and on terms less favorable to the
seller than the prices and other terms which might have been obtained at a
public sale and, notwithstanding the foregoing, agrees that such private sale
shall be deemed to have been made in a commercially reasonable manner and, in
the case of a sale of Pledged Equity, that the Administrative Agent shall have
no obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act of 1933.  Neither the Administrative
Agent’s compliance with applicable Law nor its disclaimer of warranties relating
to the Collateral shall be considered to adversely affect the commercial
reasonableness of any sale.  To the extent the rights of notice cannot be
legally waived hereunder, each Obligor agrees that any requirement of reasonable
notice shall be met if such notice, specifying the place of any public sale or
the time after which any private sale is to be made, is delivered to the
Borrower in accordance with the notice provisions of Section 11.02 of the Credit
Agreement at least 10 days before the time of sale or other event giving rise to
the requirement of such notice.  The Administrative Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.  Each Obligor further acknowledges and
agrees that any offer to sell any Pledged Equity which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of general
circulation in the financial community of New York, New York (to the extent that
such offer may be advertised without prior registration under the Securities Act
of 1933), or (ii) made privately in the manner described above shall be deemed
to involve a “public sale” under the UCC, notwithstanding that such sale may not
constitute a “public offering” under the Securities Act of 1933, and the
Administrative Agent may, in such event, bid for the purchase of such
securities.  The Administrative Agent shall not be obligated to make any sale or
other disposition of the Collateral regardless of notice having been given.  To
the extent permitted by applicable Law, any holder of Secured Obligations may be
a purchaser at any such sale.  To the extent permitted by applicable Law, each
of the Obligors hereby waives all of its rights of redemption with respect to
any such sale.  Subject to the provisions of applicable Law, the Administrative
Agent may postpone or cause the postponement of the sale of all or any portion
of the Collateral by announcement at the time and place of such sale, and such
sale may, without further notice, to the extent permitted by Law, be made at the
time and place to which the sale was postponed, or the Administrative Agent may
further postpone such sale by announcement made at such time and place.

 

(b)                                 Remedies relating to Accounts.  During the
continuation of an Event of Default, whether or not the Administrative Agent has
exercised any or all of its rights and remedies hereunder, (i) each Obligor will
promptly upon request of the Administrative Agent instruct all account debtors
to remit all payments in respect of Accounts to a mailing location selected by
the Administrative Agent and (ii) the Administrative Agent shall have the right
to enforce any Obligor’s rights against its customers and account debtors, and
the Administrative Agent or its designee may notify any Obligor’s customers and
account debtors that the Accounts of such Obligor have been assigned to the
Administrative Agent or of the Administrative Agent’s security interest therein,
and may (either in its own name or in the name of an Obligor or both) demand,
collect (including without limitation by way of a lockbox arrangement), receive,
take receipt for, sell, sue for, compound, settle, compromise and give
acquittance for any and all amounts due or to become due on any Account, and, in
the Administrative Agent’s discretion, file any claim or take any other action
or proceeding to protect and realize upon the security interest of the holders
of the Secured Obligations in the Accounts.  Each Obligor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of the
Administrative Agent in accordance with the provisions hereof shall be solely
for the Administrative Agent’s own convenience and that such Obligor shall not
have any right, title or

 

10

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interest in such Accounts or in any such other amounts except as expressly
provided herein or in the Credit Agreement.  Neither the Administrative Agent
nor the holders of the Secured Obligations shall have any liability or
responsibility to any Obligor for acceptance of a check, draft or other order
for payment of money bearing the legend “payment in full” or words of similar
import or any other restrictive legend or endorsement or be responsible for
determining the correctness of any remittance.  Furthermore, during the
continuation of an Event of Default, (i) the Administrative Agent shall have the
right, but not the obligation, to make test verifications of the Accounts in any
manner and through any medium that it reasonably considers advisable, and the
Obligors shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection with such test verifications,
(ii) upon the Administrative Agent’s request and at the expense of the Obligors,
the Obligors shall cause independent public accountants or others satisfactory
to the Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts and (iii) the Administrative Agent in its own name or in the
name of others may communicate with account debtors on the Accounts to verify
with them to the Administrative Agent’s satisfaction the existence, amount and
terms of any Accounts.

 

(c)                                  Deposit Accounts.  During the continuance
of an Event of Default, the Administrative Agent may prevent withdrawals or
other dispositions of funds in Deposit Accounts maintained with the
Administrative Agent.

 

(d)                                 Access.  In addition to the rights and
remedies hereunder, during the continuance of an Event of Default, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Obligors without cost or charge to the Administrative Agent, and
use the same, together with materials, supplies, books and records of the
Obligors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise.  In addition, the Administrative Agent may
remove Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.

 

(e)                                  Nonexclusive Nature of Remedies.  Failure
by the Administrative Agent or the holders of the Secured Obligations to
exercise any right, remedy or option under this Agreement, any other Loan
Document, any other document relating to the Secured Obligations, or as provided
by Law, or any delay by the Administrative Agent or the holders of the Secured
Obligations in exercising the same, shall not operate as a waiver of any such
right, remedy or option.  No waiver hereunder shall be effective unless it is in
writing, signed by the party against whom such waiver is sought to be enforced
and then only to the extent specifically stated, which in the case of the
Administrative Agent or the holders of the Secured Obligations shall only be
granted as provided herein.  To the extent permitted by Law, neither the
Administrative Agent, the holders of the Secured Obligations, nor any party
acting as attorney for the Administrative Agent or the holders of the Secured
Obligations, shall be liable hereunder for any acts or omissions or for any
error of judgment or mistake of fact or law other than their gross negligence or
willful misconduct hereunder.  The rights and remedies of the Administrative
Agent and the holders of the Secured Obligations under this Agreement shall be
cumulative and not exclusive of any other right or remedy which the
Administrative Agent or the holders of the Secured Obligations may have.

 

(f)                                    Retention of Collateral.  In addition to
the rights and remedies hereunder, the Administrative Agent may, in compliance
with Sections 9-620 and 9-621 of the UCC or otherwise complying with the
requirements of applicable Law of the relevant jurisdiction, accept or retain
the Collateral in satisfaction of the Secured Obligations.  Unless and until the
Administrative Agent shall have provided such notices, however, the
Administrative Agent shall not be deemed to have retained any Collateral in
satisfaction of any Secured Obligations for any reason.

 

11

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(g)                                 Deficiency.  In the event that the proceeds
of any sale, collection or realization are insufficient to pay all amounts to
which the Administrative Agent or the holders of the Secured Obligations are
legally entitled, the Obligors shall be jointly and severally liable for the
deficiency, together with interest thereon at the Default Rate, together with
the costs of collection and the fees, charges and disbursements of counsel.  Any
surplus remaining after the full payment and satisfaction of the Secured
Obligations shall be returned to the Obligors or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.

 

8.                                       Rights of the Administrative Agent.

 

(a)                                  Power of Attorney.  In addition to other
powers of attorney contained herein, each Obligor hereby designates and appoints
the Administrative Agent, on behalf of the holders of the Secured Obligations,
and each of its designees or agents, as attorney-in-fact of such Obligor,
irrevocably and with power of substitution, with authority to take any or all of
the following actions during the continuance of an Event of Default:

 

(i)                                     to demand, collect, settle, compromise,
adjust, give discharges and releases, all as the Administrative Agent may
reasonably determine;

 

(ii)                                  to commence and prosecute any actions at
any court for the purposes of collecting any Collateral and enforcing any other
right in respect thereof;

 

(iii)                               to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or release as the
Administrative Agent may deem reasonably appropriate;

 

(iv)                              receive and open mail addressed to an Obligor
and endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment,
shipment or storage of the goods giving rise to the Collateral of such Obligor
on behalf of and in the name of such Obligor, or securing, or relating to such
Collateral;

 

(v)                                 sell, assign, transfer, make any agreement
in respect of, or otherwise deal with or exercise rights in respect of, any
Collateral or the goods or services which have given rise thereto, as fully and
completely as though the Administrative Agent were the absolute owner thereof
for all purposes;

 

(vi)                              adjust and settle claims under any insurance
policy relating thereto;

 

(vii)                           execute and deliver all assignments,
conveyances, statements, financing statements, renewal financing statements,
security agreements, affidavits, notices and other agreements, instruments and
documents that the Administrative Agent may reasonably determine necessary in
order to perfect and maintain the security interests and liens granted in this
Agreement and in order to fully consummate all of the transactions contemplated
therein;

 

(viii)                        institute any foreclosure proceedings that the
Administrative Agent may reasonably deem appropriate;

 

12

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(ix)                                to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other documents relating to
the Collateral;

 

(x)                                   to exchange any of the Pledged Equity or
other property upon any merger, consolidation, reorganization, recapitalization
or other readjustment of the issuer thereof and, in connection therewith,
deposit any of the Pledged Equity with any committee, depository, transfer
agent, registrar or other designated agency upon such terms as the
Administrative Agent may reasonably deem appropriate;

 

(xi)                                to vote for a shareholder resolution, or to
sign an instrument in writing, sanctioning the transfer of any or all of the
Pledged Equity into the name of the Administrative Agent or one or more of the
holders of the Secured Obligations or into the name of any transferee to whom
the Pledged Equity or any part thereof may be sold pursuant to Section 7 hereof;

 

(xii)                             to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or threatened against the
Collateral;

 

(xiii)                          to direct any parties liable for any payment in
connection with any of the Collateral to make payment of any and all monies due
and to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct;

 

(xiv)                         to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time in respect
of or arising out of any Collateral; and

 

(xv)                            do and perform all such other acts and things as
the Administrative Agent may reasonably deem to be necessary, proper or
convenient in connection with the Collateral.

 

This power of attorney is a power coupled with an interest and shall be
irrevocable until such time as the Secured Obligations arising under the Loan
Documents have been paid in full (other than contingent indemnifications for
which no claim has been made) and the Commitments have expired or been
terminated.  The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Agreement,
and shall not be liable for any failure to do so or any delay in doing so.  The
Administrative Agent shall not be liable for any act or omission or for any
error of judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting from its
gross negligence or willful misconduct.  This power of attorney is conferred on
the Administrative Agent solely to protect, preserve and realize upon its
security interest in the Collateral.

 

(b)                                 Assignment by the Administrative Agent. The
Administrative Agent may from time to time assign the Secured Obligations to a
successor Administrative Agent appointed in accordance with the Credit
Agreement, and such successor shall be entitled to all of the rights and
remedies of the Administrative Agent under this Agreement in relation thereto.

 

(c)                                  The Administrative Agent’s Duty of Care. 
Other than the exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Obligors shall be
responsible for preservation of all

 

13

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rights in the Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Obligors.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any of the Collateral.  In the event of a public or
private sale of Collateral pursuant to Section 7 hereof, the Administrative
Agent shall have no responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or (ii) taking any steps to clean,
repair or otherwise prepare the Collateral for sale.

 

(d)                                 Liability with Respect to Accounts. 
Anything herein to the contrary notwithstanding, each of the Obligors shall
remain liable under each of the Accounts to observe and perform all the material
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account. 
Neither the Administrative Agent nor any holder of Secured Obligations shall
have any obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any holder of Secured Obligations of any payment
relating to such Account pursuant hereto, nor shall the Administrative Agent or
any holder of Secured Obligations be obligated in any manner to perform any of
the obligations of an Obligor under or pursuant to any Account (or any agreement
giving rise thereto), to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

(e)                                  Voting and Payment Rights in Respect of the
Pledged Equity.

 

(i)                                     So long as no Event of Default shall
exist, each Obligor may (A) exercise any and all voting and other consensual
rights pertaining to the Pledged Equity of such Obligor or any part thereof for
any purpose not inconsistent with the terms of this Agreement or the Credit
Agreement and (B) receive and retain any and all dividends (other than stock
dividends and other dividends constituting Collateral which are addressed
hereinabove), principal or interest paid in respect of the Pledged Equity to the
extent they are allowed under the Credit Agreement; and

 

(ii)                                  During the continuance of an Event of
Default, (A) all rights of an Obligor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant to
clause (i)(A) above shall cease and all such rights shall thereupon become
vested in the Administrative Agent which shall then have the sole right to
exercise such voting and other consensual rights, (B) all rights of an Obligor
to receive the dividends, principal and interest payments which it would
otherwise be authorized to receive and retain pursuant to clause (i)(B) above
shall cease and all such rights shall thereupon be vested in the Administrative
Agent which shall then have the sole right to receive and hold as Collateral
such dividends, principal and interest payments, and (C) all dividends,
principal and interest payments which are received by an Obligor contrary to the
provisions of clause (ii)(B) above shall be received in trust for the benefit of
the Administrative Agent, shall be segregated from other property or funds

 

14

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of such Obligor, and shall be forthwith paid over to the Administrative Agent as
Collateral in the exact form received, to be held by the Administrative Agent as
Collateral and as further collateral security for the Secured Obligations.

 

(f)                                    Releases of Collateral.  (i) If any
Collateral shall be sold, transferred or otherwise disposed of by any Obligor in
a transaction permitted by the Credit Agreement, then the Administrative Agent,
at the request and sole expense of such Obligor, shall promptly execute and
deliver to such Obligor all releases and other documents, and take such other
action, reasonably necessary for the release of the Liens created hereby or by
any other Collateral Document on such Collateral.  (ii) The Administrative Agent
may release any of the Pledged Equity from this Agreement or may substitute any
of the Pledged Equity for other Pledged Equity without altering, varying or
diminishing in any way the force, effect, lien, pledge or security interest of
this Agreement as to any Pledged Equity not expressly released or substituted,
and this Agreement shall continue as a first priority lien on all Pledged Equity
not expressly released or substituted.

 

9.                                       Application of Proceeds.  Upon the
acceleration of the Obligations pursuant to Section 9.02 of the Credit
Agreement, any payments in respect of the Secured Obligations and any proceeds
of the Collateral, when received by the Administrative Agent or any holder of
the Secured Obligations in Money, will be applied in reduction of the Secured
Obligations in the order set forth in Section 9.03 of the Credit Agreement.

 

10.                                 Continuing Agreement.

 

(a)                                  This Agreement shall remain in full force
and effect until such time as the Secured Obligations arising under the Loan
Documents have been paid in full (other than contingent indemnifications for
which no claim has been made) and the Commitments have expired or been
terminated, at which time this Agreement shall be automatically terminated and
the Administrative Agent shall, upon the request and at the expense of the
Obligors, forthwith release all of its liens and security interests hereunder
and shall execute and deliver all UCC termination statements and/or other
documents reasonably requested by the Obligors evidencing such termination.

 

(b)                                 This Agreement shall continue to be
effective or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any holder
of the Secured Obligations as a preference, fraudulent conveyance or otherwise
under any Debtor Relief Law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured Obligations
is rescinded or must be restored or returned, all reasonable costs and expenses
(including without limitation any reasonable legal fees and disbursements)
incurred by the Administrative Agent or any holder of the Secured Obligations in
defending and enforcing such reinstatement shall be deemed to be included as a
part of the Secured Obligations.

 

11.                                 Amendments; Waivers; Modifications, etc. 
This Agreement and the provisions hereof may not be amended, waived, modified,
changed, discharged or terminated except as set forth in Section 11.01 of the
Credit Agreement; provided that any update or revision to Schedule 2(c) hereof
delivered by any Obligor shall not constitute an amendment for purposes of this
Section 11 or Section 11.01 of the Credit Agreement.

 

12.                                 Successors in Interest.  This Agreement
shall be binding upon each Obligor, its successors and assigns and shall inure,
together with the rights and remedies of the Administrative Agent and the
holders of the Secured Obligations hereunder, to the benefit of the
Administrative Agent and the holders of the Secured Obligations and their
successors and permitted assigns.

 

15

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13.                                 Notices.  All notices required or permitted
to be given under this Agreement shall be in conformance with Section 11.02 of
the Credit Agreement.

 

14.                                 Counterparts.  This Agreement may be
executed in any number of counterparts, each of which where so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument.  It shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.  Delivery of executed
counterparts of this Agreement by facsimile or other electronic means shall be
effective as an original.

 

15.                                 Headings.  The headings of the sections
hereof are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

 

16.                                 Governing Law; Submission to Jurisdiction;
Venue; WAIVER OF JURY TRIAL.  The terms of Sections 11.14 and 11.15 of the
Credit Agreement with respect to governing law, submission to jurisdiction,
venue and waiver of jury trial are incorporated herein by reference, mutatis
mutandis, and the parties hereto agree to such terms.

 

17.                                 Severability.  If any provision of this
Agreement is determined to be illegal, invalid or unenforceable, such provision
shall be fully severable and the remaining provisions shall remain in full force
and effect and shall be construed without giving effect to the illegal, invalid
or unenforceable provisions.

 

18.                                 Entirety.  This Agreement, the other Loan
Documents and the other documents relating to the Secured Obligations represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Loan Documents, any other documents
relating to the Secured Obligations, or the transactions contemplated herein and
therein.

 

19.                                 Other Security.  To the extent that any of
the Secured Obligations are now or hereafter secured by property other than the
Collateral (including, without limitation, real property and securities owned by
an Obligor), or by a guarantee, endorsement or property of any other Person,
then the Administrative Agent shall have the right to proceed against such other
property, guarantee or endorsement during the continuance of any Event of
Default, and the Administrative Agent shall have the right, in its sole
discretion, to determine which rights, security, liens, security interests or
remedies the Administrative Agent shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying
or affecting any of them or the Secured Obligations or any of the rights of the
Administrative Agent or the holders of the Secured Obligations under this
Agreement, under any other of the Loan Documents or under any other document
relating to the Secured Obligations.

 

20.                                 Joinder.  At any time after the date of this
Agreement, one or more additional Persons may become party hereto by executing
and delivering to the Administrative Agent a Joinder Agreement.  Immediately
upon such execution and delivery of such Joinder Agreement (and without any
further action), each such additional Person will become a party to this
Agreement as an “Obligor” and have all of the rights and obligations of an
Obligor hereunder and this Agreement and the schedules hereto shall be deemed
amended by such Joinder Agreement.

 

21.                                 Rights of Required Lenders.  All rights of
the Administrative Agent hereunder, if not exercised by the Administrative
Agent, may be exercised by the Required Lenders.

 

22.                                 Consent of Issuers of Pledged Equity.  Each
issuer of Pledged Equity party to this Agreement hereby acknowledges, consents
and agrees to the grant of the security interests in such Pledged Equity by the
applicable Obligors pursuant to this Agreement, together with all rights

 

16

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accompanying such security interest as provided by this Agreement and applicable
law, notwithstanding any anti-assignment provisions in any operating agreement,
limited partnership agreement or similar organizational or governance documents
of such issuer.

 

[signature page follows]

 

17

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Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

 

OBLIGORS:

 

STR HOLDINGS, INC.,

 

 

a Delaware corporation

 

 

 

 

 

By:

 

 

 

Name:

Barry A. Morris

 

 

Title:

Executive Vice President and Chief

 

 

 

Financial Officer

 

 

 

 

 

 

SPECIALIZED TECHNOLOGY RESOURCES, INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

By:

 

 

 

Name:

Barry A. Morris

 

 

Title:

Executive Vice President and Chief

 

 

 

Financial Officer

 

 

 

 

 

 

STR SOLAR (CONNECTICUT), INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

By:

 

 

 

Name:

Barry A. Morris

 

 

Title:

Vice President

 

 

 

 

 

 

10 WATER STREET, INC., a Delaware corporation

 

 

 

 

 

 

By:

 

 

 

Name:

Barry A. Morris

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

Accepted and agreed to as of the date first above written.

 

 

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

18

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SCHEDULE 1(b)

 

PLEDGED EQUITY

 

OBLIGOR:

 

Name of Subsidiary

 

Number of Shares

 

Certificate
Number

 

Percentage
Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OBLIGOR:

 

Name of Subsidiary

 

Number of Shares

 

Certificate
Number

 

Percentage
Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

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SCHEDULE 2(c)

 

COMMERCIAL TORT CLAIMS

 

20

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SCHEDULE 3(d)

 

 

INVENTORY OF OBLIGORS HELD BY NON-OBLIGOR PURSUANT TO CONSIGNMENT, SALE OR
RETURN, SALE ON APPROVAL OR SIMILAR ARRANGEMENT

 

21

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SCHEDULE 3(f)

 

INSTRUMENTS; DOCUMENTS; TANGIBLE CHATTEL PAPER

 

22

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EXHIBIT 4(a)(ii)

 

IRREVOCABLE STOCK POWER

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to the
following Equity Interests of                                           , a
                         corporation:

 

No. of Shares

 

Certificate No.

 

 

 

 

 

 

 

 

 

 

and irrevocably appoints
                                                                     its agent
and attorney-in-fact to transfer all or any part of such Equity Interests and to
take all necessary and appropriate action to effect any such transfer.  The
agent and attorney-in-fact may substitute and appoint one or more persons to act
for him.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

23

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EXHIBIT 4(b)(i)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

PATENTS

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
October [    ], 2011 (as the same may be amended, modified, extended or restated
from time to time, the “Agreement”) by and among the Obligors party thereto
(each an “Obligor” and collectively, the “Obligors”) and Bank of America, N.A.,
as administrative agent (the “Administrative Agent”) for the holders of the
Secured Obligations referenced therein, the undersigned Obligor has granted a
continuing security interest in and continuing lien upon the patents and patent
applications shown below to the Administrative Agent for the ratable benefit of
the holders of the Secured Obligations:

 

PATENTS

 

Patent No.

 

Description of
Patent Item

 

Date of Patent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

PATENT APPLICATIONS

 

Patent Applications No.

 

Description of
Patent Applied for

 

Date of
Patent Applications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

24

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The undersigned Obligor and the Administrative Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the foregoing patents and patent applications (i) may only be
terminated in accordance with the terms of the Agreement and (ii) is not to be
construed as an assignment of any patent or patent application.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

[Obligor]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Acknowledged and Accepted:

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

25

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EXHIBIT 4(b)(ii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

TRADEMARKS

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
October [    ], 2011 (as the same may be amended, modified, extended or restated
from time to time, the “Agreement”) by and among the Obligors party thereto
(each an “Obligor” and collectively, the “Obligors”) and Bank of America, N.A.,
as Administrative Agent (the “Administrative Agent”) for the holders of the
Secured Obligations referenced therein, the undersigned Obligor has granted a
continuing security interest in and continuing lien upon the trademarks and
trademark applications shown below to the Administrative Agent for the ratable
benefit of the holders of the Secured Obligations:

 

TRADEMARKS

 

Trademark No.

 

Description of
Trademark Item

 

Date of Trademark

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

TRADEMARK APPLICATIONS

 

Trademark Applications No.

 

Description of
Trademark Applied for

 

Date of
Trademark Applications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

26

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The undersigned Obligor and the Administrative Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the foregoing trademarks and trademark applications (i) may only be
terminated in accordance with the terms of the Agreement and (ii) is not to be
construed as an assignment of any trademark or trademark application.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

[Obligor]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Acknowledged and Accepted:

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

27

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EXHIBIT 4(b)(iii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

COPYRIGHTS

 

United States Copyright Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
October [    ], 2011 (as the same may be amended, modified, extended or restated
from time to time, the “Agreement”) by and among the Obligors party thereto
(each an “Obligor” and collectively, the “Obligors”) and Bank of America, N.A.,
as administrative agent (the “Administrative Agent”) for the holders of the
Secured Obligations referenced therein, the undersigned Obligor has granted a
continuing security interest in and continuing lien upon the copyrights and
copyright applications shown below to the Administrative Agent for the ratable
benefit of the holders of the Secured Obligations:

 

COPYRIGHTS

 

Copyright No.

 

Description of
Copyright Item

 

Date of Copyright

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

COPYRIGHT APPLICATIONS

 

Copyright Applications No.

 

Description of
Copyright Applied for

 

Date of
Copyright Applications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Schedule 1 attached hereto

 

28

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The undersigned Obligor and the Administrative Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the foregoing copyrights and copyright applications (i) may only be
terminated in accordance with the terms of the Agreement and (ii) is not to be
construed as an assignment of any copyright or copyright application.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

[Obligor]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Acknowledged and Accepted:

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

29

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