Exhibit 10.12


 


EXECUTION COPY


 




 





SECOND LIEN CREDIT AGREEMENT


 


dated as of


 


June 15, 2007


 


among


 


STR ACQUISITION, INC.,

(to be merged with and into SPECIALIZED TECHNOLOGY RESOURCES, INC.)


 


STR HOLDINGS LLC,


 


THE LENDERS PARTY HERETO,


 


CREDIT SUISSE,

as Administrative Agent and Collateral Agent


 






 


CREDIT SUISSE SECURITIES (USA) LLC


 


as Sole Bookrunner and Sole Lead Arranger




 





[CS&M
Ref. No. 5865-531]


 

















 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  
	
  Definitions

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
  1

  
	
  SECTION 1.02.

  	
  Terms Generally

  	
  22

  
	
  SECTION 1.03.

  	
  Pro Forma Calculations

  	
  23

  
	
  SECTION 1.04.

  	
  Classification of Loans and Borrowings

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  
	
  The Credits

  
	
   

  
	
  SECTION 2.01.

  	
  Commitments

  	
  23

  
	
  SECTION 2.02.

  	
  Loans

  	
  23

  
	
  SECTION 2.03.

  	
  Borrowing Procedure

  	
  24

  
	
  SECTION 2.04.

  	
  Evidence of Debt; Repayment of Loans

  	
  25

  
	
  SECTION 2.05.

  	
  Fees

  	
  26

  
	
  SECTION 2.06.

  	
  Interest on Loans

  	
  26

  
	
  SECTION 2.07.

  	
  Default Interest

  	
  27

  
	
  SECTION 2.08.

  	
  Alternate Rate of Interest

  	
  27

  
	
  SECTION 2.09.

  	
  Termination and Reduction of Commitments

  	
  27

  
	
  SECTION 2.10.

  	
  Conversion and Continuation of Borrowings

  	
  27

  
	
  SECTION 2.11.

  	
  Optional Prepayment

  	
  29

  
	
  SECTION 2.12.

  	
  Mandatory Prepayments

  	
  30

  
	
  SECTION 2.13.

  	
  Reserve Requirements; Change in Circumstances

  	
  31

  
	
  SECTION 2.14.

  	
  Change in Legality

  	
  32

  
	
  SECTION 2.15.

  	
  Indemnity

  	
  33

  
	
  SECTION 2.16.

  	
  Pro Rata Treatment

  	
  33

  
	
  SECTION 2.17.

  	
  Sharing of Setoffs

  	
  34

  
	
  SECTION 2.18.

  	
  Payments

  	
  34

  
	
  SECTION 2.19.

  	
  Taxes

  	
  35

  
	
  SECTION 2.20.

  	
  Assignment of Commitments Under Certain
  Circumstances; Duty to Mitigate

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  
	
  Representations and
  Warranties

  
	
   

  	
   

  
	
  SECTION 3.01.

  	
  Organization; Powers

  	
  38

  
	
  SECTION 3.02.

  	
  Authorization

  	
  39

  
	
  SECTION 3.03.

  	
  Enforceability

  	
  39

  



 

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 3.04.

  	
  Governmental Approvals

  	
  39

  
	
  SECTION 3.05.

  	
  Financial Statements

  	
  39

  
	
  SECTION 3.06.

  	
  No Material Adverse Change

  	
  40

  
	
  SECTION 3.07.

  	
  Title to Properties; Possession Under Leases

  	
  40

  
	
  SECTION 3.08.

  	
  Subsidiaries

  	
  41

  
	
  SECTION 3.09.

  	
  Litigation; Compliance with Laws

  	
  41

  
	
  SECTION 3.10.

  	
  Agreements

  	
  41

  
	
  SECTION 3.11.

  	
  Federal Reserve Regulations

  	
  41

  
	
  SECTION 3.12.

  	
  Investment Company Act

  	
  42

  
	
  SECTION 3.13.

  	
  Use of Proceeds

  	
  42

  
	
  SECTION 3.14.

  	
  Tax Returns

  	
  42

  
	
  SECTION 3.15.

  	
  No Material Misstatements

  	
  42

  
	
  SECTION 3.16.

  	
  Employee Benefit Plans

  	
  42

  
	
  SECTION 3.17.

  	
  Environmental Matters

  	
  43

  
	
  SECTION 3.18.

  	
  Insurance

  	
  43

  
	
  SECTION 3.19.

  	
  Security Documents

  	
  44

  
	
  SECTION 3.20.

  	
  Location of Real Property and Leased Premises

  	
  45

  
	
  SECTION 3.21.

  	
  Labor Matters

  	
  45

  
	
  SECTION 3.22.

  	
  Solvency

  	
  45

  
	
  SECTION 3.23.

  	
  Transaction Documents

  	
  45

  
	
  SECTION 3.24.

  	
  Sanctioned Persons

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  	
   

  
	
  Conditions of Lending

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  Affirmative Covenants

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Existence; Compliance with Laws; Businesses and
  Properties

  	
  49

  
	
  SECTION 5.02.

  	
  Insurance

  	
  49

  
	
  SECTION 5.03.

  	
  Obligations and Taxes

  	
  51

  
	
  SECTION 5.04.

  	
  Financial Statements, Reports, etc.

  	
  51

  
	
  SECTION 5.05.

  	
  Litigation and Other Notices

  	
  53

  
	
  SECTION 5.06.

  	
  Information Regarding Collateral

  	
  53

  
	
  SECTION 5.07.

  	
  Maintaining Records; Access to Properties and
  Inspections; Maintenance of Ratings

  	
  54

  
	
  SECTION 5.08.

  	
  Use of Proceeds

  	
  55

  
	
  SECTION 5.09.

  	
  Employee Benefits

  	
  55

  
	
  SECTION 5.10.

  	
  Compliance with Environmental Laws

  	
  55

  
	
  SECTION 5.11.

  	
  Further Assurances

  	
  55

  
	
  SECTION 5.12.

  	
  Interest Rate Protection

  	
  56

  



 

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 5.13.

  	
  Post-Closing Items

  	
  56

  
	
  SECTION 5.14.

  	
  Funds Update

  	
  56

  
	
  SECTION 5.15.

  	
  Purchase Price Adjustments

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  Negative Covenants

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Indebtedness

  	
  57

  
	
  SECTION 6.02.

  	
  Liens

  	
  58

  
	
  SECTION 6.03.

  	
  Sale/LeaseBack Transactions

  	
  59

  
	
  SECTION 6.04.

  	
  Investments, Loans and Advances

  	
  60

  
	
  SECTION 6.05.

  	
  Mergers, Consolidations, Sales of Assets and Acquisitions

  	
  62

  
	
  SECTION 6.06.

  	
  Restricted Payments; Restrictive Agreements

  	
  62

  
	
  SECTION 6.07.

  	
  Transactions with Affiliates

  	
  64

  
	
  SECTION 6.08.

  	
  Business of Holdings, Borrower and Subsidiaries

  	
  64

  
	
  SECTION 6.09.

  	
  Other Indebtedness and Agreements

  	
  64

  
	
  SECTION 6.10.

  	
  Capital Expenditures

  	
  65

  
	
  SECTION 6.11.

  	
  Maximum Total Leverage Ratio

  	
  65

  
	
  SECTION 6.12.

  	
  Fiscal Year

  	
  66

  
	
  SECTION 6.13.

  	
  Certain Equity Securities

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  Events of
  Default

  
	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  The
  Administrative Agent and the Collateral Agent

  
	
   

  
	
  ARTICLE IX

  
	
   

  
	
  Miscellaneous

  
	
   

  
	
  SECTION 9.01.

  	
  Notices

  	
  73

  
	
  SECTION 9.02.

  	
  Survival of Agreement

  	
  73

  
	
  SECTION 9.03.

  	
  Binding Effect

  	
  74

  
	
  SECTION 9.04.

  	
  Successors and Assigns

  	
  74

  
	
  SECTION 9.05.

  	
  Expenses; Indemnity

  	
  77

  
	
  SECTION 9.06.

  	
  Right of Setoff

  	
  79

  
	
  SECTION 9.07.

  	
  Applicable Law

  	
  79

  
	
  SECTION 9.08.

  	
  Waivers; Amendment

  	
  79

  



 

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.09.

  	
  Interest Rate Limitation

  	
  80

  
	
  SECTION 9.10.

  	
  Entire Agreement

  	
  81

  
	
  SECTION 9.11.

  	
  WAIVER OF JURY TRIAL

  	
  81

  
	
  SECTION 9.12.

  	
  Severability

  	
  81

  
	
  SECTION 9.13.

  	
  Counterparts

  	
  81

  
	
  SECTION 9.14.

  	
  Headings

  	
  81

  
	
  SECTION 9.15.

  	
  Jurisdiction; Consent to Service of Process

  	
  82

  
	
  SECTION 9.16.

  	
  Confidentiality

  	
  82

  
	
  SECTION 9.17.

  	
  USA PATRIOT Act Notice

  	
  83

  
	
  SECTION 9.18.

  	
  Intercreditor Agreement

  	
  83

  



 

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(a)

  	
  -

  	
  Subsidiary Guarantors

  	
   

  
	
  Schedule 1.01(b)

  	
  -

  	
  Mortgaged Property

  	
   

  
	
  Schedule 2.01

  	
  -

  	
  Lenders and Commitments

  	
   

  
	
  Schedule 3.08

  	
  -

  	
  Subsidiaries

  	
   

  
	
  Schedule 3.09

  	
  -

  	
  Litigation

  	
   

  
	
  Schedule 3.17

  	
  -

  	
  Environmental Matters

  	
   

  
	
  Schedule 3.18

  	
  -

  	
  Insurance

  	
   

  
	
  Schedule 3.19(a)

  	
  -

  	
  UCC Filing Offices

  	
   

  
	
  Schedule 3.19(c)

  	
  -

  	
  Mortgage Filing Offices

  	
   

  
	
  Schedule 3.20(a)

  	
  -

  	
  Owned Real Property

  	
   

  
	
  Schedule 3.20(b)

  	
  -

  	
  Leased Real Property

  	
   

  
	
  Schedule 6.01

  	
  -

  	
  Existing Indebtedness

  	
   

  
	
  Schedule 6.02

  	
  -

  	
  Existing Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Administrative Questionnaire

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment and Acceptance

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Borrowing Request

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Guarantee and Collateral Agreement

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Mortgage

  	
   

  
	
  Exhibit F-1

  	
  -

  	
  Form of Opinion of Weil, Gotshal &
  Manges LLP

  	
   

  
	
  Exhibit F-2

  	
  -

  	
  Form of Opinion of Murtha Cullina LLP

  	
   

  
	
  Exhibit G

  	
  -

  	
  Form of Interest Election Request

  	
   

  
						



 

















 


SECOND LIEN CREDIT
AGREEMENT dated as of June 15, 2007, among STR ACQUISITION, INC., a
Delaware corporation, which substantially simultaneously with the execution
hereof shall be merged with and into SPECIALIZED TECHNOLOGY RESOURCES, INC., a
Delaware corporation (the “Borrower”), STR
HOLDINGS LLC, a Delaware limited liability company (“Holdings”),  the Lenders (as
defined in Article I), and CREDIT SUISSE, as administrative agent (in such
capacity, the “Administrative Agent”) and as collateral agent (in such
capacity, the “Collateral Agent”) for the Lenders.


 


The Borrower has
requested the Lenders to make Loans (such term and each other capitalized term
used but not defined in this introductory statement having the meaning given it
in Article I) on the Closing Date, in an aggregate principal amount not in
excess of $75,000,000. The proceeds of the Loans are to be used together with
the proceeds of the First Lien Loans and cash to be contributed by Holdings
solely (a) to pay consideration, fees and expenses related hereto and to
the Acquisition and (b) to refinance the Existing Debt.


 


The Lenders are willing
to extend such credit to the Borrower on the terms and subject to the
conditions set forth herein. Accordingly, the parties hereto agree as follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.01. Defined Terms. As
used in this Agreement, the following terms shall have the meanings specified
below:


 


“ABR”, when used in reference
to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.


 


“Acquisition”  shall mean the acquisition by
Holdings of the Company and its subsidiaries pursuant to the Merger Agreement,
pursuant to which on the Closing Date the Borrower will merge with and into the
Company with the Company surviving as a wholly owned direct subsidiary of
Holdings.


 


“Adjusted LIBO
Rate”  shall
mean, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.


 


“Administrative
Agent Fees”  shall
have the meaning assigned to such term in Section 2.05(a).


 

















 


“Administrative
Questionnaire”  shall
mean an Administrative Questionnaire in the form of Exhibit A, or such
other form as may be supplied from time to time by the Administrative Agent.


 


“Advisory
Services and Monitoring Agreements”  shall mean (i) the Advisory Services
and Monitoring Agreement dated as of the Closing Date, between the Borrower and
Evergreen Capital Partners, LLC and (ii) the Monitoring Agreement dated as
of the Closing Date, among the Borrower, DLJ Merchant Banking, Inc.,
Westwind STR Advisors, LLC and Dennis L Jilot.


 


“Affiliate”
shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that,
(i) for purposes of Section 6.07, the term “Affiliate” shall also
include any person that directly or indirectly owns 5% or more of any class of
Equity Interests of the person specified or that is an officer or director of
the person specified and (ii) Credit Suisse and its Affiliates (other than
Permitted Investors, Parent and Parent’s subsidiaries) shall be deemed not to
be Affiliates of Parent or any of its subsidiaries.


 


“Alternate Base
Rate”  shall
mean, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of
the preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, as the case may be.


 


“Applicable Percentage”  shall mean, for any day (a) with
respect to any Eurodollar Loan, 7.00% per annum, and (b) with respect to
any ABR Loan, 6.00% per annum.


 


“Arranger”  shall mean
Credit Suisse Securities (USA) LLC.


 


“Asset Sale”  shall mean
the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise) by the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Subsidiary Guarantor of (a) any
Equity Interests of any of the Subsidiaries (other than directors’ qualifying
shares) or (b) any other assets of the Borrower or any of the Subsidiaries
(other than (i) inventory, damaged, obsolete or worn out assets, scrap and
Permitted Investments, in each case disposed of in the ordinary course of
business, (ii) dispositions between or among Foreign Subsidiaries and (iii) any
sale, transfer or other disposition or series of related sales, transfers or
other dispositions having a value not in excess of $500,000).


 


2

















 


“Assignment and
Acceptance”  shall
mean an assignment and acceptance entered into by a Lender and an assignee, and
accepted by the Administrative Agent, in the form of Exhibit B or such
other form as shall be approved by the Administrative Agent.


 


“Attributable
Debt”  in
respect of a Sale/Leaseback Transaction means, as of the time of determination,
the present value (discounted at the interest rate borne by the Loans,
compounded annually) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of “Capital Lease Obligations”.


 


“Baseline EBITDA”  shall mean (i) for
the fiscal year ended December 31, 2007, $42,000,000, (ii) for the
fiscal year ended December 31, 2008, $45,000,000, (iii) for the
fiscal year ended December 31, 2009, $50,000,000, (iv) for the fiscal
year ended December 31, 2010, $55,000,000, (v) for the fiscal year
ended December 31, 2011, $60,000,000, (vi) for the fiscal year ended December 31,
2012, $65,000,000, and (vii) for the fiscal year ended December 31,
2013, $70,000,000.


 


“Board”  shall mean the Board of
Governors of the Federal Reserve System of the United States of America.


 


“Borrowing”  shall mean Loans of the
same Type made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect.


 


“Borrowing
Request”  shall
mean a request by the Borrower in accordance with the terms of Section 2.03
and substantially in the form of Exhibit C or such other form as shall be
approved by the Administrative Agent.


 


“Business Day”  shall mean any day other than a Saturday,
Sunday or day on which banks in New York City are authorized or required by law
to close; provided, however,  that
when used in connection with a Eurodollar Loan, the term “Business Day”  shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.


 


“Capital
Expenditures”  shall
mean, for any period, (a) the additions to property, plant and equipment
and other capital expenditures of the Borrower and its consolidated
Subsidiaries that are (or should be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance with GAAP and
(b) Capital Lease Obligations or Synthetic Lease Obligations incurred by
the Borrower and its consolidated Subsidiaries during such period, but
excluding in each case any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any damage,
loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation.


 


3

















 


“Capital Lease
Obligations”  of
any person shall mean the obligations of such person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance
sheet of such person under GAAP, and the amount of such obligations shall be
the capitalized amount thereof determined in accordance with GAAP.


 


“Cash Interest”  shall have the meaning
assigned to such term in Section 2.06.


 


A. “Change in Control”  shall be deemed to have occurred if (a) prior
to a Qualified Public Offering, the Permitted Investors shall fail to own,
directly or indirectly, beneficially and of record, shares representing at
least 51% of each of the aggregate ordinary voting power represented by the
issued and outstanding Equity Interests of Holdings, (b) after a Qualified
Public Offering, any “person” or “group” (within the meaning of Rule l3d-5
of the Securities Exchange Act of 1934 as in effect on the date hereof), other
than the Permitted Investors, shall own, directly or indirectly, beneficially
or of record, shares representing more than 35% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
Holdings, (c) a majority of the seats (other than vacant seats) on the
board of directors of Holdings shall at any time be occupied by persons who
were neither (i) nominated by the board of directors of Holdings nor (ii) appointed
by directors so nominated, (d) any change in control (or similar event,
however denominated) with respect to Holdings, the Borrower or any Subsidiary
shall occur under and as defined in any indenture or agreement in respect of
Material Indebtedness to which Holdings, the Borrower or any Subsidiary is a
party, or (e) Holdings shall cease to directly own, beneficially and of
record, 100% of the issued and outstanding Equity Interests of the Borrower.


 


“Change in Law”  shall mean (a) the adoption of any
law, rule or regulation after the date of this Agreement, (b) any
change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender (or, for purposes of Section 2.13,
by any lending office of such Lender or by such Lender’s holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.


 


“Closing Date”  shall mean June 15,
2007.


 


“Code”  shall mean the Internal Revenue Code of
1986, as amended from time to time.


 


“Collateral”  shall mean all the “Collateral” as
defined in any Security Document and shall also include the Mortgaged
Properties.


 


“Commitment”  shall mean, with
respect to any Lender, the commitment of such Lender to make Loans hereunder as
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender assumed its Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced


 


4














 


or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04.


 


“Company”  shall mean Specialized Technology Resources, Inc., a Delaware
corporation.


 


“Confidential Information Memorandum”  shall mean the Confidential Information
Memorandum of the Borrower dated May, 2007.


 


“Consolidated EBITDA”  shall
mean, for any period, Consolidated Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of (i) consolidated interest expense for such period and
any commitment, agency, letter of credit or similar fees paid during such period
with respect to Indebtedness permitted pursuant to Section 6.01 and other
bank service fees, (ii) consolidated income tax expense for such period, (iii) all
amounts attributable to depreciation and amortization for such period, (iv) any
non-cash charges (other than the write-down of current assets) for such period,
(v) fees and expenses accrued during such period with respect to the
Transactions and to the extent not consummated, any acquisition, disposition,
equity issuance, investment or incurrence of Indebtedness that would have been
permitted under this Agreement, (vi) charges in respect of management,
monitoring, consulting and advising fees payable to the Sponsor pursuant to the
Advisory Services and Monitoring Agreements as in effect as of the Closing Date
in respect of such period, (vii) one-time costs, payments and expenses (including
severance costs) incurred during such period in respect of the termination of employment
of employees, officers and management of the Borrower or any Subsidiary outside
the ordinary course of business, (viii) all cash payments received during
such period on account of non-cash income deducted from Consolidated Net Income
pursuant to clause (b)(ii) below in a previous period, (ix) consulting,
legal, accounting, integration, brokerage and variable commission fees, costs
and expenses incurred in connection with any Permitted Acquisition, (x) consulting
fees incurred in connection with a one-time strategic review of the Borrower in
an aggregate amount not to exceed $1,000,000, (xi) net after-tax extraordinary
losses or charges, including any such losses or charges relating to relocation
costs, one-time compensation charges and the Transactions, (xii) non-recurring
or unusual cash charges for such period in an aggregate amount not to exceed $1,000,000
in any fiscal year, (xiii) non-cash compensation charges, (xiv) foreign currency
transaction and translation losses, and (xv) any net after-tax gains or losses
(less fees, expenses or charges related thereto) attributable to the early
extinguishment of Indebtedness pursuant to the agreement governing such
Indebtedness, and minus (b) without duplication (i) all cash payments
made during such period on account of reserves, restructuring charges and other
non-cash charges added to Consolidated Net Income pursuant to clause (a)(iv) above
in a previous period, (ii) foreign currency transaction and translation
gains, and (iii) to the extent included in determining such Consolidated
Net Income, any unusual and extraordinary gains and all non-cash items of
income for such period, all determined on a consolidated basis in accordance
with GAAP. For purposes of determining the Total Leverage Ratio as of or for
the periods ended on September 30, 2007 and December 31, 2007,
Consolidated EBITDA will be


 


5

















 


deemed to be equal
to (i) for the fiscal quarter ended December 31, 2006, $12,013,000,
and (ii) for the fiscal quarter ended March 31, 2007, $7,273,000.


 


“Consolidated
Interest Expense”  shall
mean, for any period, the cash interest expense (including imputed interest
expense in respect of Capital Lease Obligations and Synthetic Lease
Obligations) of the Borrower and the Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP. For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by the Borrower or any Subsidiary with respect to interest
rate Hedging Agreements.


 


“Consolidated Net Income”  shall
mean, for any period, the net income or loss of the Borrower and the
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP (adjusted to reflect any charge, tax or expense incurred or accrued
by Holdings during such period as though such charge, tax or expense had been
incurred by the Borrower, to the extent that the Borrower has made or would be
entitled under the Loan Documents to make any payment to or for the account of
Holdings in respect thereof); provided that
there shall be excluded (a) the income of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by the
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Subsidiary, (b) the income or
loss of any person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any Subsidiary or the date
that such person’s assets are acquired by the Borrower or any Subsidiary, (c) the
income of any person in which any other person (other than the Borrower or a
wholly owned Subsidiary or any director holding qualifying shares in accordance
with applicable law) has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to the Borrower or a wholly
owned Subsidiary by such person during such period, and (d) any gains or
losses attributable to sales of assets (including pursuant to a Sale/Leaseback
Transaction) out of the ordinary course of business.


 


“Control”  shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by
contract or otherwise, and the terms “Controlling”  and “Controlled”  shall have meanings correlative thereto.


 


“Credit Facility”  shall mean the term loan facility
provided for by this Agreement.


 


“Cure Amount”  shall have the meaning assigned to such
term in Article VII.


 


“Cure Right”  shall have the meaning assigned to such term
in Article VII.


 


“Current Assets”  shall mean, at any time, the consolidated
current assets (other than cash and Permitted Investments) of the Borrower and
the Subsidiaries.


 


6

















 


“Current
Liabilities”  shall
mean, at any time, the consolidated current liabilities of the Borrower and the
Subsidiaries at such time, but excluding, without duplication, (a) the
current portion of any long-term Indebtedness and (b) outstanding
Revolving Loans and Swingline Loans under the First Lien Credit Agreement (each
as defined therein).


 


“Default”  shall mean any event or condition that
upon notice, lapse of time or both would constitute an Event of Default.


 


“Discharge of First Lien Obligations”
shall have the meaning assigned to such term in the Intercreditor
Agreement.


 


“Disqualified
Stock”  shall
mean any Equity Interest that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, (a) matures (excluding any maturity as the result
of an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, or requires the payment of
any cash dividend or any other scheduled payment constituting a return of
capital, in each case at any time on or prior to the 91st day following the
Maturity Date, or (b) is convertible into or exchangeable (unless at the
sole option of the issuer thereof) for (i) debt securities or (ii) any
Equity Interest referred to in clause (a) above, in each case at any time
prior to the 91st day following the Maturity Date.


 


“dollars”  or “$” shall mean lawful money of the
United States of America.


 


“Domestic
Subsidiaries”  shall
mean all Subsidiaries incorporated or organized under the laws of the United
States of America, any State thereof or the District of Columbia.


 


“Eligible
Assignee”  shall
mean any commercial bank, insurance company, investment or mutual fund or other
entity (but not any natural person) that is an “accredited investor” (as
defined in Regulation D under the Securities Act of 1933, as amended) that
extends credit or invests in bank loans as one of its businesses; provided that neither the Borrower nor any
of its Affiliates shall be an Eligible Assignee.


 


“EMU”  shall mean the economic and monetary
union as contemplated in the Treaty on European Union.


 


“Environmental
Laws”  shall mean all applicable Federal, state,
local and foreign laws (including common law), treaties, regulations, rules,
ordinances, codes, decrees, judgments, directives and orders (including consent
orders), in each case, relating to pollution or protection of the environment,
natural resources, human health and safety as related to exposure to Hazardous
Materials, or the generation, use, treatment, storage, transport or handling
of, or the arrangement for such activities with respect to, Hazardous
Materials.


 


“Environmental
Liability”  shall mean all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs


 


7

















 


(including administrative
oversight costs, natural resource damages and remediation costs), whether
contingent or otherwise, arising out of or relating to (a) requirements of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.


 


“Equity
Contribution”  shall
mean the contribution by DLJ Merchant Banking Partners IV, L.P., its affiliated
funds, certain existing investors in the Company and certain other investors
reasonably acceptable to the Arranger of not less than 30.0% of the pro forma
consolidated capitalization of Holdings after giving effect to the Transactions
on the Closing Date in cash to Holdings as cash common equity and/or preferred
equity that does not provide for any cash dividends, redemption or other cash
payment at any time prior to 91 days after repayment in full in cash of the
Credit Facility.


 


“Equity
Interests”  shall
mean shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
interests in any person, and any option, warrant or other right entitling the
holder thereof to purchase or otherwise acquire any such equity interest.


 


“ERISA”  shall mean the Employee
Retirement Income Security Act of 1974, as the same may be amended from time to
time.


 


“ERISA Affiliate”  shall mean any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.


 


“ERISA Event”  shall mean (a) any “reportable event”,
as defined in Section 4043 of ERISA or the regulations issued thereunder,
with respect to a Plan (other than an event for which the 30-day notice period
is waived), (b) prior to the effectiveness of the applicable provisions of
the Pension Act, the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302
of ERISA) or, on and after the effectiveness of the applicable provisions of
the Pension Act, any failure by any Plan to satisfy the minimum funding
standard (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Plan, in each case whether or not waived, (c) the
filing pursuant to, prior to the effectiveness of the applicable provisions of
the Pension Act, Section 412(d) of the Code or Section 303(d) of
ERISA or, on and after the effectiveness of the applicable provisions of the
Pension Act, Section 412(c) of the Code or Section 302(c) of
ERISA, of an application for a waiver of the minimum funding standard with
respect to any Plan, (d) on and after the effectiveness of the applicable
provisions of the Pension Act, a determination that any Plan is, or is expected
to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA
or Section 430(i)(4) of the Code), (e) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the


 


8

















 


Borrower or any of its
ERISA Affiliates from any Plan or Multiemployer Plan, (f) the receipt by
the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (g) prior to the
effectiveness of the applicable provisions of the Pension Act, the adoption of
any amendment to a Plan that would require the provision of security pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, (h) the
receipt by the Borrower or any of its ERISA Affiliates of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA or, on and after
the effectiveness of the applicable provisions of the Pension Act, in
endangered or critical status, within the meaning of Section 305 of ERISA,
(i) any Foreign Benefit Event or (j) any other event (other than the
initial adoption or assumption of a Plan) or condition with respect to a Plan
or Multiemployer Plan that could result in liability of the Borrower or any
Subsidiary.


 


“Eurodollar”,  when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.


 


“Event of
Default”  shall
have the meaning assigned to such term in Article VII.


 


“Excess Cash
Flow”  shall
mean, for any fiscal year of the Borrower (or, in the case of the fiscal year
ended December 31, 2007 (except for purposes of determining changes in
noncash working capital), the portion thereof commencing on the Closing Date
and ending on December 31, 2007), the excess of (a) the sum, without
duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) reductions
to noncash working capital of the Borrower and the Subsidiaries for such fiscal
year (i.e., the decrease, if any,
in Current Assets minus Current Liabilities from the beginning to the end of
such fiscal year) over (b) the sum, without duplication, of (i) the
amount of any Taxes payable in cash by the Borrower and the Subsidiaries or,
amounts payable pursuant to Sections 6.06(a)(iii)(y) or (iv) if
applicable, with respect to such fiscal year, (ii) Consolidated Interest
Expense for such fiscal year, (iii) Capital Expenditures made in cash in
accordance with Section 6.10 during such fiscal year, except to the extent
financed with the proceeds of Indebtedness, equity issuances, casualty
proceeds, condemnation proceeds or other proceeds that would not be included in
Consolidated EBITDA, (iv) permanent repayments of Indebtedness (other than
mandatory prepayments of Loans under Section 2.12) made in cash by the
Borrower and the Subsidiaries during such fiscal year, but only to the extent
that the Indebtedness so prepaid by its terms cannot be reborrowed or redrawn
and such prepayments do not occur in connection with a refinancing of all or
any portion of such Indebtedness and (v) additions to noncash working
capital for such fiscal year (i.e., the
increase, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year).


 


Excluded Taxes”  shall mean,
with respect to the Administrative Agent, any Lender or any other recipient of
any payment to be made by or on account of any


 


9

















 


obligation of the
Borrower hereunder, (a) income, franchise or other similar taxes imposed
on (or measured by) its income by (i) the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located or (ii) by reason of a present or former connection between the
recipient and the jurisdiction of the Borrower (other than such connection
arising solely from such recipient having executed, delivered, or performed its
obligations under, or enforced, this Agreement or any other Loan Documents), (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above, (c) in
the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure to comply with Section 2.19(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.19(a), and (d) backup withholding taxes imposed
on amounts payable to a recipient at the time such Lender becomes a party
hereto (or designates a new lending office) or is attributable to such Lender’s
failure or inability (other than as a result of a Change in Law) to comply with
Section 2.19(e), except to the extent that such Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such backup withholding tax pursuant to Section 2.19(a).


 


“Existing Credit Agreement”  shall mean that certain Credit Agreement
dated as of September 29, 2005 among the Company, Webster Bank, National
Association, as Administrative Agent and L/C Issuer, Newstar Financial, Inc.,
as Syndication Agent, The Governor and Company of the Bank of Ireland and
National City Bank, as Co-Documentation Agents and the Lenders party thereto,
as amended.


 


“Existing Debt”  shall mean the indebtedness of the
Company under the Existing Credit Agreement.


 


“Federal Funds Effective Rate”  shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.


 


“Fee Letter”  shall mean the Fee Letter dated April 21,
2007, among the Borrower, Holdings, the Arranger and the Administrative Agent.


 


“Financial Officer”  of any person shall mean the chief
financial officer, principal accounting officer, treasurer or controller of
such person.


 


10

















 


“First Lien
Credit Agreement”  shall
mean the First Lien Credit Agreement dated as of the date hereof, among the
Borrower, Holdings, Credit Suisse, as administrative agent and as collateral
agent, and the lenders from time to time party thereto.


 


“First Lien
Event of Default”  shall
have the meaning assigned to such term in Article VII.


 


“First Lien
Guarantee and Collateral Agreement”  shall mean the First Lien Guarantee and
Collateral Agreement dated as of the date hereof among the Borrower, Holdings,
the Subsidiaries party thereto and Credit Suisse, as first lien collateral
agent.


 


“First Lien
Loans”  shall
mean the loans made under the First Lien Credit Agreement.


 


“First Lien Loan
Documents”  shall
mean the First Lien Credit Agreement and all other instruments, agreements and
other documents evidencing or governing the First Lien Loans or providing for
any Guarantee or other right in respect thereof.


 


“First Priority
Liens”  shall
have the meaning assigned to such term in the Intercreditor Agreement.


 


“Foreign Benefit
Event”  shall
mean, with respect to any Foreign Pension Plan, (a) the existence of
unfunded liabilities in excess of the amount permitted under any applicable law,
or in excess of the amount that would be permitted absent a waiver from a
Governmental Authority, (b) the failure to make the required contributions
or payments, under any applicable law, on or before the due date for such
contributions or payments, (c) the receipt of a notice by a Governmental
Authority relating to the intention to terminate any such Foreign Pension Plan
or to appoint a trustee or similar official to administer any such Foreign
Pension Plan, or alleging the insolvency of any such Foreign Pension Plan or (d) the
incurrence of any liability in excess of $5,000,000 by Holdings, the Borrower
or any Subsidiary under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or partial withdrawal
of any participating employer therein.


 


“Foreign Lender”  shall mean any Lender that is organized
under the laws of a jurisdiction other than that in which the Borrower is
located. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.


 


“Foreign Pension
Plan”  shall
mean any benefit plan that covers employees of the Borrower or any Subsidiaries
who are employed outside of the United States and that is subject to any
statutory funding requirement permitting any Governmental Authority to
accelerate the obligation of the Borrower or any Subsidiaries to fund all or a
portion of the unfunded accrued benefit liabilities under such plan.


 


“Foreign Subsidiary”  shall mean any
Subsidiary that is not a Domestic Subsidiary.


 


11

















 


“GAAP”  shall mean United States generally
accepted accounting principles applied on a consistent basis.


 


“Governmental
Authority”  shall
mean any Federal, state, local or foreign court or governmental agency,
authority, instrumentality or regulatory body.


 


“Granting Lender”  shall have the meaning assigned to such
term in Section 9.04(i).


 


“Guarantee”  of or by any person shall mean any
obligation, contingent or otherwise, of such person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other person (the “primary obligor”)  in any manner,
whether directly or indirectly, and including any obligation of such person,
direct or indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness or other obligation, (b) to purchase or
lease properly, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment of such Indebtedness or
other obligation or (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness or other obligation; provided, however, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course
of business.


 


“Guarantee and Collateral Agreement”  shall mean the Second Lien Guarantee and
Collateral Agreement, substantially in the form of Exhibit D, among the
Borrower, Holdings, the Subsidiaries party thereto and the Collateral Agent for
the benefit of the Secured Parties.


 


“Guarantors”  shall mean Holdings and the Subsidiary
Guarantors.


 


“Hazardous Materials”
shall mean (a) any
petroleum products or byproducts and all other hydrocarbons, radon gas,
asbestos, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting
substances and (b) any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any Environmental Law.


 


“Hedging
Agreement”  shall
mean any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.


 


“Inactive Subsidiary”
shall mean any Subsidiary that (a) does not conduct any
business operations, (b) has assets with a book value not in excess of
$250,000 and (c) does not have any Indebtedness outstanding.


 


“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or with respect to deposits or advances of any kind
(excluding customer advances or deposits received in the ordinary course of
business),


 


12

















 


(b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily paid, (d) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (g) all Guarantees by such person of Indebtedness of others,
(h) all Capital Lease Obligations and Synthetic Lease Obligations of such
person and all Attributable Debt in respect of Sale/Leaseback Transactions
entered into by such person, (i) all obligations of such person as an
account party in respect of letters of credit and (j) all obligations of
such person in respect of bankers’ acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner, to the extent such person is liable therefor as a result of
such person’s ownership interest in, or other relationship with, such other
person, except to the extent the terms of such Indebtedness expressly provide
that such person is not liable therefor. Notwithstanding the foregoing, “Indebtedness”
shall not include indemnification, adjustment of purchase price, earn out,
contingent purchase obligations, hold back or other similar obligations, in
each case, incurred or assumed in connection with an acquisition or disposition
permitted hereunder of any business, assets or a Subsidiary, except to the
extent not paid when due (unless the same are being contested in good faith).
The amount of Indebtedness for which recourse is limited to either a specific
amount or to identified assets shall be equal to the lesser of such specified
amount or the fair market value of such asset, as the case may be.


 


“Indemnified Taxes”  shall
mean Taxes other than Excluded Taxes and Other Taxes.


 


“Intercreditor
Agreement”  shall
mean that certain Intercreditor Agreement dated as of the date hereof, among
the Borrower, the Subsidiaries party thereto, the Collateral Agent and First
Lien Collateral Agent (as defined therein).


 


“Interest
Election”  shall
have the meaning assigned to such term in  Section 2.06.


 


“Interest Election Request”  shall mean a notice of Interest Election
in accordance with the terms of Section 2.06 and substantially in the form
of Exhibit G.


 


“Interest
Payment Date”  shall
mean (a) with respect to any ABR Loan, the last Business
Day of each March, June, September and December, commencing September 28,
2007 and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day that would have been an Interest Payment Date
had successive Interest Periods of three months’ duration been applicable to
such Borrowing.


 


13














 


“Interest Period”  shall mean, with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as the Borrower may elect (provided
that for a Borrowing on the Closing Date, the Borrower may only
elect a 1 month Interest Period); provided,
however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.


 


“Lenders”  shall mean (a) the persons listed on Schedule
2.01 (other than any such person that has ceased to be a party hereto pursuant
to an Assignment and Acceptance) and (b) any person that has become a
party hereto pursuant to an Assignment and Acceptance.


 


“LIBO Rate”
shall
mean, with respect to any Eurodollar Borrowing for any Interest Period, the
rate per annum determined by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the commencement
of such Interest Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in dollars (as set forth by any service
selected by the Administrative Agent that has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “LIBO Rate” shall be the interest rate per annum determined by
the Administrative Agent to be the average of the rates per annum at which
deposits in dollars are offered for such relevant Interest Period to major
banks in the London interbank market in London, England by the Administrative
Agent at approximately 11:00 a.m. (London time) on the date that is two
Business Days prior to the beginning of such Interest Period.


 


“Lien”  shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.


 


“Loan Documents”  shall
mean this Agreement, the Security Documents and the promissory notes, if any,
executed and delivered pursuant to Section 2.04(e).


 


“Loan Parties”  shall mean the Borrower and the Guarantors.


 


14

















 


“Loans”  shall mean the term loans made by the
Lenders to the Borrower pursuant to Section 2.01.


 


“Margin
Stock”  shall have the meaning assigned to such
term in Regulation U.


 


“Material Adverse Effect”  shall mean (a) a materially adverse
effect on the business, assets, liabilities, operations, financial condition or
operating results of the Borrower and the Subsidiaries, taken as a whole or (b) a
material impairment of the rights and remedies of or benefits available to the
Lenders under any Loan Document.


 


“Material Indebtedness”  shall mean Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
Holdings, the Borrower or any Subsidiary in an aggregate principal amount exceeding
$9,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of Holdings, the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that Holdings, the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.


 


“Material Subsidiary”  shall mean, at any time, any Subsidiary that at such
time shall have assets in excess of $10,000,000 or shall have $10,000,000 in
revenues in the most recently ended fiscal year.


 


“Maturity
Date”  shall mean December 15, 2014.


 


“Merger Agreement”  shall mean the Agreement and Plan of
Merger dated as of April 21, 2007, among the Borrower, the Company and
Parent.


 


“Moody’s”  shall mean Moody’s Investors Service, Inc., or
any successor thereto.


 


“Mortgaged
Properties”  shall mean, initially, the owned real properties of
the Loan Parties specified on Schedule 1.01(b), and shall include each other
parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 5.11.


 


“Mortgages”  shall mean the mortgages, deeds of trust,
assignments of leases and rents, modifications and other security documents delivered
pursuant to clause (i) of paragraph (j) of Article IV or
pursuant to Section 5.11, each substantially in the form of Exhibit E.


 


“Multiemployer Plan”  shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.


 


“Net Cash Proceeds”  shall mean (a) with respect to any
Asset Sale, the cash proceeds (including cash proceeds subsequently received
(as and when received) in respect of noncash consideration initially received),
net of (i) selling expenses (including reasonable broker’s fees or
commissions, legal fees, transfer and similar taxes and the Borrower’s good
faith estimate of income taxes paid or payable in connection with such


 


15

















 


sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations or purchase price adjustment associated with
such Asset Sale (provided that, to the extent and at
the time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money that is secured by the asset sold in such Asset Sale and that is required
to be repaid with such proceeds (other than any such Indebtedness assumed by
the purchaser of such asset); provided,
however, that, if (x) the Borrower shall deliver a certificate
of a Financial Officer to the Administrative Agent at the time of receipt
thereof setting forth the Borrower’s intent to reinvest such proceeds in
productive assets of a kind then used or usable in the business of the Borrower
and its Subsidiaries within 365 days of receipt of such proceeds and (y) no
Default or Event of Default shall have occurred and shall be continuing at the
time of such certificate or at the proposed time of the application of such
proceeds, such proceeds shall not constitute Net Cash Proceeds except to the
extent not so used at the end of such 365-day period, at which time such
proceeds shall be deemed to be Net Cash Proceeds; and (b) with respect to
any issuance or incurrence of Indebtedness or any Specified Equity Issuance,
the cash proceeds thereof, net of all taxes and customary fees, commissions,
costs and other expenses incurred in connection therewith.


 


“Obligations”  shall
mean all obligations defined as “Obligations” in the Guarantee and Collateral
Agreement and the other Security Documents.


 


“Other Taxes”  shall
mean any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.


 


“Parent”  shall mean STR Holdings, Inc. and its successors
and assigns.


 


“PBGC”  shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.


 


“Pension Act”  shall
mean the Pension Protection Act of 2006, as amended from time to time.


 


“Perfection Certificate”  shall mean the Perfection Certificate substantially in
the form of Exhibit B to the Guarantee and Collateral Agreement.


 


“Permitted
Acquisition”  shall have the meaning assigned to such term in Section 6.04(g).


 


“Permitted
Investments”  shall mean:


 


(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition
thereof;


 


16

















 


(b) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, any
participating member state of the EMU (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of such participating
member state of the EMU), in each case with a rating equal to or higher than
Baa3 by Moody’s and BBB- by S&P (or the equivalent rating and rating agency
applicable for such member state) and maturing within one year from the date of
acquisition thereof;


 


(c)  investments in commercial paper maturing
within 270 days from the date of acquisition thereof and having, at such date
of acquisition, the highest credit rating obtainable from S&P or from Moody’s;


 


(d) investments in certificates of deposit,
banker’s acceptances, time deposits and eurodollar time deposits maturing
within one year from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, the
Administrative Agent or any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof or any
foreign commercial bank organized under the laws of a participating member
state of the EMU that has a combined capital and surplus and undivided profits
of not less than $500,000,000 in the case of U.S. banks (or the dollar
equivalent as of the date of determination in the case of non-U.S. banks);


 


(e) fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria of clause
(d) above;


 


(f) investments in “money market funds” within
the meaning of Rule 2a-7 of the Investment Company Act of 1940, as
amended, substantially all of whose assets are invested in investments of the
type described in clauses (a) through (e) above;


 


(g) investments in so-called “auction rate”
securities rated AAA or higher by S&P or Aaa or higher by Moody’s and which
have a reset date not more than 90 days from the date of acquisition thereof;
and


 


(h) other short-term investments utilized by Foreign Subsidiaries
in accordance with normal investment practices for cash management in
investments of a type analogous to the foregoing and denominated in dollars or
foreign currencies.


 


“Permitted Investors”  shall mean DLJ Merchant Banking Partners IV, L.P. and
its affiliated funds.


 


“person”  shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership, Governmental Authority or other entity.


 


 “PIK
Interest”  shall have the meaning assigned to such term in Section 2.06.


 


17

















 


“Plan”  shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.


 


“Pledged Collateral”  shall have the meaning assigned to such
term in the Guarantee and Collateral Agreement.


 


“Prime Rate”  shall
mean the rate of interest per annum determined from time to time by Credit
Suisse as its prime rate in effect at its principal office in New York City and
notified to the Borrower.


 


“Qualified Capital
Stock”  of any person shall mean any Equity
Interest of such person that is not Disqualified Stock.


 


“Qualified Public
Offering” shall
mean the initial underwritten public offering of common Equity Interests of
Holdings or the Borrower pursuant to an effective registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, that results in at least $50,000,000 of Net Cash
Proceeds to Holdings.


 


“Register” shall have the meaning assigned to such term in Section 9.04(d).


 


“Regulation
T” shall
mean Regulation T of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.


 


“Regulation
U” shall
mean Regulation U of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.


 


“Regulation
X”  shall mean Regulation X of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.


 


“Related
Fund”  shall
mean, with respect to any Lender that is a fund or commingled investment
vehicle that invests in bank loans, any other fund that invests in bank loans
and is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.


 


“Related
Parties” shall
mean, with respect to any specified person, such person’s Affiliates and the
respective directors, trustees, officers, employees, agents and advisors of
such person and such person’s Affiliates.


 


“Release”  shall mean any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into or through the environment or within or upon any building,
structure, facility or fixture.


 


18

















 


“Required
Lenders” shall
mean, at any time, Lenders having Loans and Commitments representing more than
50% of the sum of all Loans outstanding and Commitments at such time.


 


“Required
Prepayment Percentage”  shall mean in the case of any Excess Cash Flow, 50%
or, if on the date of the applicable prepayment (and after giving effect
thereto, in whole or in part), the Total Leverage Ratio is less than 5.25 to
1.00 but greater than or equal to 4.50 to 1.00, 25%, or, if on the date of the
applicable prepayment, the Total Leverage Ratio is less than 4.50 to 1.00, 0%.


 


“Responsible
Officer”
of any person shall mean any executive officer or Financial Officer of such
person and any other officer or similar official thereof responsible for the
administration of the obligations of such person in respect of this Agreement.


 


“Restricted Indebtedness”  shall mean Indebtedness of Holdings, the Borrower or
any Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).


 


“Restricted
Payment”  shall mean any dividend or other
distribution (whether in cash, securities or other property (other than
Qualified Capital Stock)) with respect to any Equity Interests in Holdings, the
Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property (other than Qualified Capital Stock)), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in Holdings,
the Borrower or any Subsidiary. For greater certainty, the payment of fees
pursuant to the Advisory Services and Monitoring Agreements shall not
constitute a Restricted Payment under Section 6.06(a).


 


“Sale/Leaseback
Transaction” means an arrangement, directly or indirectly, with any person relating
to property, real or personal or mixed, used or useful in the business of the
Borrower or any Subsidiary, whether now owned or acquired after the Closing
Date, whereby the Borrower or any Subsidiary sells or transfers such property
to a person and thereafter rents or leases such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.


 


“Secured
Parties”  shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.


 


“Security
Documents” shall mean the Mortgages, the Guarantee and Collateral Agreement, the
Intercreditor Agreement and each of the security agreements, mortgages and
other instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.


 


“Significant
Asset Sale” shall mean the sale, transfer, lease or other disposition by Holdings
or any Subsidiary to any person other than the Borrower or a Subsidiary
Guarantor of all or substantially all of the assets of, or a majority of the
Equity Interests in, a person, or a division or line of business or other
business unit of a person.


 


19

















 


“S&P”  shall mean Standard &  Poor’s Ratings Service, or any successor
thereto.


 


“Spanish Subsidized
Loans”  shall mean government-subsidized loans in advance made
as part of an official program of the Ministry of Economic Development of Spain
(the “Spanish
Ministry”), representing funds pledged to STR España
as incentive for economic development in the country of Spain and/or the region
of Asturias, Spain, the interest and principal of which are relieved by the
Spanish Ministry upon completion of STR España’s approved development program
(capital investment, job creation, employee training, etc.).


 


“SPC” shall have the meaning assigned to such
term in Section 9.04(i).


 


“Specified
Equity Issuance”  shall mean any public issuance or sale by
Holdings, the Borrower or any of their respective subsidiaries of any Equity
Interests of Holdings, the Borrower or any such subsidiary, as applicable,
other than public offerings with respect to Holding’s, the Borrower’s or any of
their respective subsidiaries’ Equity Interests registered on Form S-4 or Form S-8.


 


“Statutory Reserves”  shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority, domestic
or foreign, to which the Administrative Agent or any Lender (including any branch,
Affiliate or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar
Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in
Regulation D of the Board) and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.


 


“STR
España”  shall mean Specialized Technology Resources España
S.A., a stock corporation formed under the laws of Spain and wholly owned by
the Borrower.


 


“subsidiary”  shall mean, with respect to any person
(herein referred to as the “parent”),  any corporation, partnership, limited
liability company, association or other business entity (a) of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is being made,
owned, Controlled or held, or (b) that is, at the time any determination
is made, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.


 


“Subsidiary”  shall mean any subsidiary of the
Borrower.


 


20

















 


“Subsidiary
Guarantor”  shall mean each Subsidiary listed on
Schedule 1.01(a), and each other Subsidiary that is or becomes a party to the
Guarantee and Collateral Agreement.


 


“Synthetic
Lease” shall
mean, as to any person, any lease (including leases that may be terminated by
the lessee at any time) of any property (whether real, personal or mixed) (a) that
is accounted for as an operating lease under GAAP and (b) in respect of
which the lessee retains or obtains ownership of the property so leased for
U.S. federal income tax purposes, other than any such lease under which such
person is the lessor.


 


“Synthetic
Lease Obligations”  shall mean, as to any person, an amount
equal to the capitalized amount of the remaining lease payments under any
Synthetic Lease that would appear on a balance sheet of such person in
accordance with GAAP if such obligations were accounted for as Capital Lease
Obligations.


 


“Synthetic
Purchase Agreement”  shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Holdings, the Borrower
or any Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than
Holdings, the Borrower or any Subsidiary of any Equity Interest or Restricted
Indebtedness or (b) any payment (other than on account of a permitted
purchase by it of any Equity Interest or Restricted Indebtedness) the amount of
which is determined by reference to the price or value at any time of any
Equity Interest or Restricted Indebtedness; provided
that no phantom stock or similar plan providing for payments only to
current or former directors, officers or employees of Holdings, the Borrower or
the Subsidiaries (or to their heirs or estates) shall be deemed to be a
Synthetic Purchase Agreement.


 


“Taxes”  shall mean any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.


 


‘‘Total
Debt”  shall mean, at any time, the total
Indebtedness of the Borrower and the Subsidiaries at such time (excluding
Indebtedness of the type described in clause (i) of the definition of such
term, except to the extent of any unreimbursed drawings thereunder).


 


“Total Leverage Ratio”  shall mean, on any date, the ratio of
Total Debt (net of unrestricted cash and cash equivalents of the Borrower and
the Subsidiaries (in each case in the amount determined by GAAP)) on such date
to Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date. In any period of four consecutive
fiscal quarters in which a Permitted Acquisition or Significant Asset Sale
occurs, the Total Leverage Ratio shall be determined on a pro forma basis in
accordance with Section 1.03.


 


“Transactions”  shall mean, collectively, (a) the
execution, delivery and performance by Parent, the Company and the Borrower of
the Merger Agreement and the consummation of the transactions contemplated
thereby, (b) the execution, delivery and performance by Holdings, the
Borrower and the Subsidiaries party thereto of the First


 


21

















 


Lien Loan Documents and
the incurrence of the First Lien Loans, (c) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party
and the making of the Borrowings hereunder, (d) the repayment of all
amounts due or outstanding under or in respect of, and the termination of, the
Existing Credit Agreement and (e) the payment of related fees and
expenses.


 


“Type”, when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall
mean the Adjusted LIBO Rate and the Alternate Base Rate.


 


“USA PATRIOT Act”  shall mean The Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26,
2001)).


 


“wholly
owned Subsidiary”  of any person shall mean a subsidiary of such person
of which securities (except for directors’ qualifying shares) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made, owned, Controlled or held by such person or
one or more wholly owned Subsidiaries of such person or by such person and one
or more wholly owned Subsidiaries of such person.


 


“Withdrawal
Liability”  shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.


 


SECTION 1.02. Terms
Generally. The
definitions in Section 1.01 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”. The word “will” shall be construed to have
the same meaning and effect as the word “shall”; and the words “asset” and “property”
shall be construed as having the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document shall mean such document as
amended, restated, supplemented or otherwise modified from time to time and (b) all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided,
however, that if the Borrower notifies the Administrative Agent that
the Borrower wishes to amend any covenant in Article VI or any related
definition to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI or any related definition for such purpose), then the
Borrower’s compliance with such covenant shall be determined on the basis of
GAAP in effect immediately


 


22

















 


before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.


 


SECTION 1.03. Pro Forma Calculations. With respect to
any period of four consecutive fiscal quarters during which any Permitted
Acquisition or Significant Asset Sale occurs (and for purposes of determining
whether an acquisition is a Permitted Acquisition under Section 6.04(g) or
would result in a Default or an Event of Default), the Total Leverage Ratio
shall be calculated with respect to such period on a pro forma basis after
giving effect to such Permitted Acquisition or Significant Asset Sale
(including, without duplication, (a) all pro forma adjustments permitted
or required by Article 11 of Regulation S-X under the Securities Act of
1933, as amended and (b) pro forma adjustments for cost savings (net of
continuing associated expenses) to the extent such cost savings are factually
supportable, are expected to have a continuing impact and have been realized or
are reasonably expected to be realized within 12 months following such Permitted
Acquisition; provided that all
such adjustments shall be set forth in a reasonably detailed certificate of a
Financial Officer of the Borrower), using, for purposes of making such
calculations, the historical financial statements of the Borrower and the
Subsidiaries which shall be reformulated as if such Permitted Acquisition or
Significant Asset Sale, and any other Permitted Acquisitions and Significant
Asset Sales that have been consummated during the period, had been consummated
on the first day of such period.


 


SECTION 1.04. Classjfication
of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a
“Eurodollar Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).


 


ARTICLE II


 


The Credits


 


SECTION 2.01. Commitments.  Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make a Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Commitment. Amounts paid
or prepaid in respect of Loans may not be reborrowed.


 


SECTION 2.02. Loans.
(a) Each Loan shall be made as part of a Borrowing consisting
of Loans made by the Lenders ratably in accordance with their applicable
Commitments; provided, however, that
the failure of any Lender to make any Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). The Loans comprising any
Borrowing shall be in an aggregate principal amount that is an integral
multiple of $100,000 and not less than $500,000.


 


23














 


(b)   Subject
to Sections 2.08 and 2.14, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Borrower may request pursuant to Section 2.03.
Each Lender may at its option make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided,
however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than five Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.


 


(c)   Each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.


 


(d)   Unless the
Administrative Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with paragraph (c) above
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If the
Administrative Agent shall have so made funds available then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower to but excluding the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender’s Loan as part of such Borrowing for purposes of
this Agreement.


 


SECTION 2.03. Borrowing Procedure.  In order to request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a) in
the case of a Eurodollar Borrowing, not later than 12:00 (noon), New York City
time, three Business Days before a proposed Borrowing, and (b) in the case
of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before a proposed Borrowing. 
Each such telephonic Borrowing Request shall be irrevocable, and shall
be


 


24

















 


confirmed
promptly by hand delivery or fax to the Administrative Agent of a written
Borrowing Request and shall specify the following information: (i) whether
such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day); (iii) the number
and location of the account to which funds are to be disbursed; (iv) the
amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto; provided, however, that, notwithstanding any contrary
specification in any Borrowing Request, each requested Borrowing shall comply
with the requirements set forth in Section 2.02. If no election as to the
Type of Borrowing is specified in any such notice, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. The Administrative
Agent shall promptly advise the applicable Lenders of any notice given pursuant
to this Section 2.03 (and the contents thereof), and of each Lender’s
portion of the requested Borrowing.


 


SECTION 2.04. Evidence of Debt;  Repayment of
Loans.  (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the principal amount of each Loan of such Lender on
the Maturity Date.


 


(b)   Each Lender shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time under this
Agreement.


 


(c)   The Administrative Agent
shall maintain accounts in which it will record (i) the amount of each
Loan made hereunder, the Type thereof and, if applicable, the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender’s share thereof.


 


(d)   The entries made in the
accounts maintained pursuant to paragraphs (b) and (c) above shall be
prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.


 


(e)   Any Lender may request
that Loans made by it hereunder be evidenced by a promissory note. In such
event, the Borrower shall execute and deliver to such Lender a promissory note
payable to such Lender and its registered assigns and in a form and substance
reasonably acceptable to the Administrative Agent and the Borrower. Notwithstanding
any other provision of this Agreement, in the event any Lender shall request
and receive such a promissory note, the interests represented by such note
shall at all times (including after any assignment of all or part of such
interests pursuant to


 


25

















 


Section 9.04)
be represented by one or more promissory notes payable to the payee named
therein or its registered assigns.


 


SECTION 2.05. Fees.
(a) The Borrower agrees to pay to the Administrative Agent, for
its own account, the administrative fees set forth in the Fee Letter at the
times and in the amounts specified therein (the
“Administrative Agent Fees”).


 


(b)   All fees shall be paid
on the dates due, in immediately available funds, to the Administrative Agent
for distribution, if and as appropriate, among the Lenders. Once paid, none of
the fees shall be refundable under any circumstances.


 


SECTION 2.06. 
Interest on
Loans.  (a) Upon the terms and subject to the conditions of this
Agreement, the Lenders grant the Borrower, for any Interest Period commencing
prior to the fifth anniversary of the Closing Date, an option to pay interest
on the Loans (i) entirely in cash (“Cash Interest”)  or (ii) entirely by increasing the
outstanding principal amount of the Loans by the amount of interest accrued
during such Interest Period (“PIK Interest”). The
Borrower must elect (the “Interest
Election”)  the
form of payment of interest with respect to each Interest Period by delivering
an Interest Election Request to the Administrative Agent no later than five
Business Days prior to the start of such Interest Period. The Administrative
Agent shall promptly deliver a corresponding notice to each Lender. In the
absence of such an Interest Election for any Interest Period, interest on the
Loans shall be payable as Cash Interest.


 


(b)   Subject to the
provisions of Section 2.07, Cash Interest on Loans comprising each ABR
Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when the
Alternate Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times and calculated from and including the date
of such Borrowing to but excluding the date of repayment thereof) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Percentage in effect
from time to time.


 


(c)   Subject to the
provisions of Section 2.07, Cash Interest on Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage in effect from time to time.


 


(d)   Notwithstanding anything
to the contrary in this Section 2.06, PIK Interest on the Loans shall bear
interest at the rate otherwise applicable to such Loan pursuant to Section 2.06(c) or
(d), as applicable, plus 1.50% per annum.


 


(e)   Interest on each Loan shall
be payable on the Interest Payment Dates applicable to such Loan except as
otherwise provided in this Agreement. The applicable Alternate Base Rate or
Adjusted LIBO Rate for each Interest Period or day within an Interest Period,
as the case may be, shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.


 


26

















 


SECTION 2.07. Default Interest.  If
the Borrower shall default in the payment of any principal of or interest on
any Loan or any other amount due hereunder, by acceleration or otherwise, or
under any other Loan Document, then, until such defaulted amount shall have
been paid in full, to the extent permitted by law, all overdue amounts
outstanding under this Agreement and the other Loan Documents shall bear
interest (after as well as before judgment), payable on demand, (a) in the
case of principal, at the rate otherwise applicable to such Loan pursuant to Section 2.06
plus 2.00% per annum and (b) in all other cases, at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) equal to the rate that would be
applicable to an ABR Loan plus 2.00% per annum.


 


SECTION 2.08. Alternate Rate of Interest.  In the event, and on each occasion, that
on the day two Business Days prior to the commencement of any Interest Period
for a Eurodollar Borrowing the Administrative Agent shall have determined that
dollar deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available in the London interbank market, or that the rates
at which such dollar deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or fax notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall
be deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent under this Section 2.08 shall be conclusive absent
manifest error


 


SECTION 2.09. Termination
and Reduction of Commitments. (a) The Commitments shall
automatically terminate upon the making of the Loans on the Closing Date.
Notwithstanding the foregoing, all the Commitments shall automatically
terminate at 5:00 p.m., New York City time, on June 30, 2007, or such
earlier date on which the Merger Agreement terminates, if the Borrowing of the
Loans shall not have occurred by such time.


 


(b)   Upon at least three
Business Days’ prior irrevocable written or fax notice to the Administrative
Agent, the Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Commitments; provided, however,  that each
partial reduction of the Commitments shall be in an integral multiple of
$1,000,000 and in a minimum amount of $1,000,000.


 


(c)   Each reduction in the
Commitments hereunder shall be made ratably among the Lenders in accordance
with their respective applicable Commitments.


 


SECTION 2.10. Conversion and Continuation of Borrowings.
The Borrower shall have the right at any time upon prior irrevocable
notice to the Administrative Agent (a) not later than 12:00 (noon), New
York City time, one Business Day prior to


 


27

















 


conversion,
to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later
than 12:00 (noon), New York City time, three Business Days prior to conversion
or continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to
continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
Interest Period, and (c) not later than 12:00 (noon), New York City time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:


 


(i)   until
the Administrative Agent shall have notified the Borrower that the primary
syndication of the Commitments has been completed (which notice shall be given
as promptly as practicable and, in any event, within 30 days after the Closing
Date), no LIBOR Borrowing may have an Interest Period in excess of one month;


 


(ii)   each
conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;


 


(iii)   if
less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the
principal amount and maximum number of Borrowings of the relevant Type;


 


(iv)   each
conversion shall be effected by each Lender and the Administrative Agent by
recording for the account of such Lender the new Loan of such Lender resulting
from such conversion and reducing the Loan (or portion thereof) of such Lender
being converted by an equivalent principal amount; accrued interest on any
Eurodollar Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of conversion;


 


(v)   if any
Eurodollar Borrowing is converted at a time other than the end of the Interest
Period applicable thereto, the Borrower shall pay, upon demand, any amounts due
to the Lenders pursuant to Section 2.15;


 


(vi)   any
portion of a Borrowing maturing or required to be repaid in less than one month
may not be converted into or continued as a Eurodollar Borrowing;


 


(vii)   any
portion of a Eurodollar Borrowing that cannot be converted into or continued as
a Eurodollar Borrowing by reason of the immediately preceding clause shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing;


 


(viii)   no
Interest Period may be selected for any Eurodollar Borrowing that would end
later than the Maturity Date; and


 


(ix)   upon
notice to the Borrower from the Administrative Agent given at the request of
the Required Lenders, after the occurrence and during the


 


28

















 


continuance of a Default or Event of Default, no outstanding Loan may
be converted into, or continued as, a Eurodollar Loan.


 


Each notice pursuant to this Section 2.10 shall
be irrevocable and shall refer to this Agreement and specify (i) the
identity and amount of the Borrowing that the Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued
as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent
shall advise the Lenders of any notice given pursuant to this Section 2.10
and of each Lender’s portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10
to continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to
convert such Borrowing), such Borrowing shall, at the end of the Interest
Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into an ABR Borrowing.


 


SECTION 2.11. Optional Prepayment.  (a) Subject to
payment of any applicable premium as set forth in paragraph (b) below, the
Borrower shall have the right at any time and from time to time to prepay any
Borrowing, in whole or in part, upon at least three Business Days’ prior
written or fax notice (or telephone notice promptly confirmed by written or fax
notice) in the case of Eurodollar Loans, or written or fax notice (or telephone
notice promptly confirmed by written or fax notice) at least one Business Day
prior to the date of prepayment in the case of ABR Loans, to the Administrative
Agent before 12:00 (noon), New York City time; provided,
however,  that each partial prepayment shall
be in an amount that is an integral multiple of $100,000 and not less than
$1,000,000.


 


(b)   Each prepayment of Loans
made pursuant to Section 2.11(a) shall be made together with a
prepayment premium in an amount equal to (i) if such prepayment is made
prior to the first anniversary of the Closing Date, 2.00%, and (ii) if
such prepayment is made on or after the first anniversary of the Closing Date
but prior to the second anniversary of the Closing Date, 1.00%, in each case of
the aggregate principal amount of Loans being prepaid.


 


(c)   Each notice of
prepayment shall specify the prepayment date, the principal amount of each
Borrowing (or portion thereof) to be prepaid, shall be irrevocable (unless such
notice is expressly conditioned upon a refinancing of the Credit Facility, in
which case such notice may be rescinded if such refinancing shall not be consummated
or shall otherwise be delayed) and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to paragraph (b) above
(if applicable) and to Section 2.15 but otherwise without premium or penalty.
All prepayments under this Section 2.11 shall be


 


29

















 


accompanied
by accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.


 


SECTION 2.12. Mandatory Prepayments.  (a) Subject
to paragraph (f) of this Section 2.12, not later than the third
Business Day following the receipt of Net Cash Proceeds in respect of any Asset
Sale, the Borrower shall apply 100% of the Net Cash Proceeds received with
respect thereto to prepay outstanding Loans.


 


(b)   Subject to paragraph (f) of
this Section 2.12, in the event and on each occasion that an Specified
Equity Issuance occurs, the Borrower shall, substantially simultaneously with
(and in any event not later than the third Business Day next following) the
occurrence of such Specified Equity Issuance, apply 50% of the Net Cash
Proceeds therefrom to prepay outstanding Loans.


 


(c)   Subject to paragraph (f) of
this Section 2.12, no later than the later of (i) 120 days after the
end of each fiscal year of the Borrower, commencing with the fiscal year ending
on December 31, 2007, and (ii) the 10th day subsequent to the date on
which the financial statements with respect to such period are delivered
pursuant to Section 5.04(a), the Borrower shall prepay outstanding Loans
in an aggregate principal amount equal to the Required Prepayment Percentage of
Excess Cash Flow for the fiscal year then ended.


 


(d)   Subject to paragraph (f) of
this Section 2.12, in the event that any Loan Party or any subsidiary of a
Loan Party shall receive Net Cash Proceeds from the issuance or incurrence of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than any cash proceeds from the issuance or renewal of
Indebtedness permitted pursuant to Section 6.01), the Borrower shall,
substantially simultaneously with (and in any event not later than the third
Business Day next following) the receipt of such Net Cash Proceeds by such Loan
Party or such subsidiary, apply an amount equal to 100% of such Net Cash
Proceeds to prepay outstanding Loans.


 


(e)   Notwithstanding the
foregoing, any Lender may elect, by written notice to the Administrative Agent
at the time and in the manner specified by the Administrative Agent, to decline
all (but not less than all) of its pro rata share of such mandatory prepayment
of its Loans pursuant to this Section 2.12 (such declined amounts, the “Declined Proceeds”). Any
Declined Proceeds shall be offered to the Lenders not so declining such
prepayment (with such Lenders having the right to decline any prepayment with
Declined Proceeds at the time and in the manner specified by the Administrative
Agent). To the extent such Lenders elect to decline their pro rata shares of
such Declined Proceeds, such remaining Declined Proceeds may be retained by the
Borrower.


 


(f)   Notwithstanding anything
to the contrary in this Section 2.12, until the Discharge of First Lien
Obligations shall have occurred, no mandatory prepayments of outstanding Loans
that would otherwise be required under this Section 2.12 shall be required
to be made, except with respect to the portion (if any) of the proceeds of the
event giving rise to such mandatory prepayment as shall have been rejected by
the


 


30

















 


lenders
under the First Lien Credit Agreement (and which is not required to be applied
to reduce outstanding Revolving Facility Loans and Swingline Loans thereunder
and as defined therein or to fund a cash collateral account with the
administrative agent under the First Lien Credit Agreement in an amount up to
the aggregate L/C Exposure (as defined in the First Lien Credit Agreement) at
such time), in each case in accordance with and as required by Section 2.13
of the First Lien Credit Agreement. If at the time of any prepayment pursuant
to this Section 2.12 there shall be outstanding Borrowings of different
Types or Eurodollar Borrowings with different Interest Periods, and if some but
not all Lenders shall have accepted such mandatory prepayment, then the
aggregate amount of such mandatory prepayment shall be allocated ratably to
each outstanding Borrowing of the accepting Lenders. If no Lenders exercise the
right to waive a given mandatory prepayment of the Loans pursuant to Section 2.12(e),
then, with respect to such mandatory prepayment, the amount of such mandatory
prepayment shall be applied first to Loans that are ABR Loans to the full
extent thereof before application to Loans that are Eurodollar Loans in a
manner that minimizes the amount of any payments required to be made by the
Borrower pursuant to Section 2.15.


 


(g)   The Borrower shall
deliver to the Administrative Agent, at the time of each prepayment required
under this Section 2.12, (i) a certificate signed by a Financial
Officer of the Borrower setting forth in reasonable detail the calculation of
the amount of such prepayment and (ii) to the extent practicable, at least
three days prior written notice of such prepayment. Each notice of prepayment
shall specify the prepayment date, the Type of each Loan being prepaid and the
principal amount of each Loan (or portion thereof) to be prepaid. All
prepayments of Borrowings under this Section 2.12 shall be subject to Section 2.15,
but shall otherwise be without premium or penalty, and shall be accompanied by
accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.


 


SECTION 2.13. Reserve
Requirements; Change in Circumstances.  (a) Notwithstanding any other provision of this
Agreement, if any Change in Law shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by any Lender (except any such
reserve requirement which is reflected in the Adjusted LIBO Rate) or shall
impose on such Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender, and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise) by an amount deemed by such Lender to be material, then the
Borrower will pay to such Lender upon demand such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered.


 


(b)   If any Lender shall have
determined that any Change in Law regarding capital adequacy has or would have
the effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement or the Loans made pursuant hereto to a level below that which such
Lender or such Lender’s holding company could have achieved but for such


 


31

















 


Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such Lender’s holding company for any such reduction suffered.


 


(c)   A certificate of a
Lender setting forth the amount or amounts necessary to compensate such Lender
or its holding company, as applicable, as specified in paragraph (a) or (b) above
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate delivered by it within 10 Business Days after its receipt of the
same.


 


(d)   Failure or delay on the
part of any Lender to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be
under any obligation to compensate any Lender under paragraph (a) or (b) above
with respect to increased costs or reductions with respect to any period prior
to the date that is 120 days prior to such request if such Lender knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that
the foregoing limitation shall not apply to any increased costs or reductions
arising out of the retroactive application of any Change in Law within such 120-day
period. The protection of this Section 2.13 shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of the Change in Law that shall have occurred or been imposed.


 


SECTION 2.14. Change in Legality.  (a) Notwithstanding any other
provision of this Agreement, if any Change in Law shall make it unlawful for
any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent:


 


(i)   such
Lender may declare that Eurodollar Loans will not thereafter (for the duration
of such unlawfulness) be made by such Lender hereunder (or be continued for
additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to continue
an ABR Loan as such for an additional Interest Period or to convert a
Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration
shall be subsequently withdrawn; and


 


(ii)   such
Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall


 


32

















 


be automatically converted to ABR Loans as of the effective date of
such notice as provided in paragraph (b) below.


 


In
the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.


 


(b)   For purposes of this Section 2.14,
a notice to the Borrower by any Lender shall be effective as to each Eurodollar
Loan made by such Lender, if lawful, on the last day of the Interest Period
then applicable to such Eurodollar Loan; in all other cases such notice shall
be effective on the date of receipt by the Borrower.


 


SECTION 2.15. Indemnity.
The Borrower shall indemnify each Lender against any loss or expense
that such Lender may sustain or incur as a consequence of (a) any event,
other than a default by such Lender in the performance of its obligations
hereunder, which results in (i) such Lender receiving or being deemed to
receive any amount on account of the principal of any Eurodollar Loan prior to
the end of the Interest Period in effect therefor, (ii) the conversion of
any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be
made by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice
of such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”)  or
(b) any default in the making of any payment or prepayment required to be
made hereunder. In the case of any Breakage Event, such loss shall include an
amount equal to the excess, as reasonably determined by such Lender, of (i) its
cost of obtaining funds for the Eurodollar Loan that is the subject of such
Breakage Event for the period from the date of such Breakage Event to the last
day of the Interest Period in effect (or that would have been in effect) for
such Loan over (ii) the amount of interest likely to be realized by such
Lender in redeploying the funds released or not utilized by reason of such
Breakage Event for such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section 2.15
shall be delivered to the Borrower and shall be conclusive absent manifest
error.


 


SECTION 2.16. Pro Rata Treatment.  Except as required under Section 2.12(e) or 2.14,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each reduction of the Commitments and each
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans). Each Lender agrees that in computing such Lender’s
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount.


 


33














 


SECTION 2.17.
Sharing of Setoffs.  Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim
against the Borrower or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans as a result of which the unpaid principal portion
of its Loans shall be proportionately less than the unpaid principal portion of
the Loans of any other Lender, it shall be deemed simultaneously to have purchased
from such other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of the Loans and
participations in Loans held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker’s lien, setoff
or counterclaim or other event was to the principal amount of all Loans
outstanding prior to such exercise of banker’s lien setoff or counterclaim or
other event; provided, however, that
if any such purchase or purchases or adjustments shall be made pursuant to this
Section 2.17 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower and Holdings expressly consent to the foregoing
arrangements and agree that any Lender holding a participation in a Loan deemed
to have been so purchased may exercise any and all rights of banker’s lien,
setoff or counterclaim with respect to any and all moneys owing by the Borrower
and Holdings to such Lender by reason thereof as fully as if such Lender had
made a Loan directly to the Borrower in the amount of such participation.


 


SECTION 2.18.
Payments. (a) The Borrower shall make each payment (including principal of
or interest on any Borrowing or any fees or other amounts) hereunder and under
any other Loan Document not later than 12:00 (noon), New York City time, on the
date when due in immediately available dollars, without setoff, defense or
counterclaim. Each such payment shall be made to the Administrative Agent at
its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative
Agent shall promptly distribute to each Lender any payments received by the
Administrative Agent on behalf of such Lender


 


(b)   Except as otherwise expressly provided herein,
whenever any payment (including principal of or interest on any Borrowing or
any fees or other amounts) hereunder or under any other Loan Document shall
become due, or otherwise would occur, on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, if
applicable.


 


(c)   Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the


 


34

















 


Lenders the amount due.
In such event, if the Borrower does not in fact make such payment, then each of
the Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender, and to pay interest thereon,
for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error).


 


SECTION 2.19.
Taxes.  (a) Any and all payments by or on
account of any obligation of the Borrower or any other Loan Party hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower or any other Loan Party shall
be required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.19) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower or such Loan Party
shall make such deductions and (iii) the Borrower or such Loan Party shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.


 


(b)   The Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.


 


(c)   The Borrower shall indemnify the Administrative
Agent and each Lender, within 10 Business Days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender, as the case may be, on or with respect to
any payment by or on account of any obligation of the Borrower or any other
Loan Party hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section 2.19) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto (other than penalties,
interest or other expenses payable by reason of the deliberate action or
inaction of the Administrative Agent or such Lender, as the case may be),
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
by the Administrative Agent on behalf of itself or a Lender, shall be
conclusive absent manifest error.


 


(d)   As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.


 


35

















 


(e)   Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement or any
other Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly completed
and executed documentation prescribed by applicable law or reasonably requested
by the Borrower as will permit such payments to be made without withholding or
at a reduced rate. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by Borrower or the Administrative Agent
as will enable the Borrower or the Administrative Agent to determine whether or
not such Lender is subject to withholding or information reporting
requirements. Without limiting the generality of the foregoing, any Foreign
Lender shall deliver to the Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the request of the Borrower or the Administrative
Agent), two of whichever of the following is applicable:


 


(i)     duly
completed original signed copies of Internal Revenue Service (“IRS”)  Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,


 


(ii)    duly
completed original signed copies of IRS Form W-8ECI,


 


(iii)   in the
case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of Section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” within the
meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code
and (y) duly completed original signed copies of IRS Form W-BEN, or


 


(iv)  any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit Borrower to
determine the withholding or deduction required to be made.


 


(f)   Any Lender that is a “United States person”, as
defined in Section 7701(a)(30) of the Code, shall deliver to the Borrower and
the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent) duly completed original signed copies of
IRS Form W-9, or any successor form, in order to comply with U.S. backup
withholding requirements. 


 


(g)   If the Administrative Agent or any Lender receives
a refund of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Borrower


 


36

















 


or with respect to which
the Borrower has paid additional amounts pursuant to this Section 2.19, it
shall promptly notify the Borrower of such refund and shall, within 30 days
after receipt of such refund, pay to the Borrower an amount equal to such
refund, net of all out-of-pocket expenses of the Administrative Agent or such
Lender, as the case may be; provided,
however, that the Borrower, upon the request of the Administrative
Agent or such Lender, as applicable, agrees to repay the amount paid over to
the Borrower to the Administrative Agent or such Lender, as applicable, in the
event of the Administrative Agent or such Lender is required to repay such
refund. This paragraph shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
person.


 


SECTION 2.20.
Assignment of Commitments Under
Certain Circumstances; Duty to Mitigate.  (a) In the event (i) any Lender
delivers a certificate requesting compensation pursuant to Section 2.13, (ii) any
Lender delivers a notice described in Section 2.14, (iii) the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender pursuant to Section 2.19
or (iv) any Lender refuses to consent to any amendment, waiver or other
modification of any Loan Document requested by the Borrower that requires the
consent of a greater percentage of the Lenders than the Required Lenders and
such amendment, waiver or other modification is consented to by the Required
Lenders, the Borrower may, at its sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender and the Administrative Agent, require such Lender to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
assigned obligations and, with respect to clause (iv) above, shall consent
to such requested amendment, waiver or other modification of any Loan Document
(which Eligible Assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of
any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld or delayed, and (z) the
Borrower or such Eligible Assignee shall have paid to the affected Lender in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Loans of such
Lender, plus all fees and other amounts accrued for the account of such Lender
hereunder with respect thereto (including any amounts under Sections 2.13 and
2.15 and, in the case of clause (iv) above, if such assignment occurs
prior to the first anniversary of the Closing Date, the prepayment fee that
would be payable pursuant to Section 2.11(b) if the Loans of such
Lender subject to such assignment had been prepaid by the Borrower pursuant to Section 2.11,
such amount to be payable by the Borrower); provided
further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender’s claim for compensation
under Section 2.13, notice under Section 2.14 or the amounts paid
pursuant to Section 2.19, as the case may be, cease to cause such Lender
to suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in Section 2.14,
or cease to result in amounts being payable under Section 2.19, as the
case may be (including as a


 


37

















 


result of any action
taken by such Lender pursuant to paragraph (b) below), or if such Lender
shall waive its right to claim further compensation under Section 2.13 in
respect of such circumstances or event or shall withdraw its notice under Section 2.14
or shall waive its right to further payments under Section 2.19 in respect
of such circumstances or event or shall consent to the proposed amendment,
waiver, consent or other modification, as the case may be, then such Lender
shall not thereafter be required to make any such transfer and assignment
hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable
power of attorney (which power is coupled with an interest) to execute and
deliver, on behalf of such Lender as assignor, any Assignment and Acceptance
necessary to effectuate any assignment of such Lender’s interests hereunder in
the circumstances contemplated by this Section 2.20(a).


 


(b)   If (i) any Lender shall request compensation
under Section 2.13, (ii) any Lender delivers a notice described in Section 2.14
or (iii) the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority on account of any Lender, pursuant to Section 2.19,
then such Lender shall use reasonable efforts (which shall not require such
Lender to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal or
regulatory restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested
in writing by the Borrower or (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.13 or enable it to withdraw its notice
pursuant to Section 2.14 or would reduce amounts payable pursuant to Section 2.19,
as the case may be, in the future. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such filing or assignment, delegation and transfer.


 


ARTICLE III 


 


Representations and Warranties


 


Each
of Holdings and the Borrower represents and warrants to the Administrative
Agent, the Collateral Agent and each of the Lenders that:


 


SECTION 3.01.
Organization; Powers.  Holdings, the Borrower and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and, to the extent such concept is applicable in
such jurisdiction, is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has
the power and authority to execute, deliver and perform its obligations under
each of the Loan Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party and, in the case of the Borrower, to
borrow hereunder.


 


38

















 


SECTION 3.02.
Authorization.  The Transactions (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and (b) will
not (i) violate (A) any provision of law, statute, rule or
regulation in a manner that could reasonably be expected to result in a
Material Adverse Effect, or of the certificate or articles of incorporation or
other constitutive documents or by-laws of Holdings, the Borrower or any
Subsidiary, (B) any order of any Governmental Authority in a manner that
could reasonably be expected to result in a Material Adverse Effect, or (C) any
provision of any indenture, agreement or other instrument to which Holdings,
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound in a manner that could reasonably be expected
to result in a Material Adverse Effect, (ii) be in conflict with, result
in a breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument in a manner that could reasonably be
expected to result in a Material Adverse Effect, or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Holdings, the Borrower or any
Subsidiary (other than any Lien created hereunder or under the Security
Documents or any First Priority Lien).


 


SECTION 3.03.
Enforceability.  This
Agreement has been duly executed and delivered by Holdings and the Borrower and
constitutes, and each other Loan Document when executed and delivered by each
Loan Party party thereto will constitute, a legal, valid and binding obligation
of such Loan Party enforceable against such Loan Party in accordance with its
terms.


 


SECTION 3.04.
Governmental Approvals.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages, (c) such as have been made
or obtained and are in full force and effect and (d) those that, if not
obtained or made, could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.


 


SECTION 3.05.
Financial Statements.  (a)
The Borrower has heretofore furnished to the Lenders its consolidated balance sheets
and related statements of income, stockholder’s equity and cash flows: (i) as
of and for the fiscal years ended December 31, 2004, 2005 and 2006,
audited by and accompanied by the opinion of UHY LLP, independent public
accountants, (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended March 31, 2007, certified by a Financial Officer, and (iii) as
of and for each fiscal month ended after March 31, 2007 and at least 30 days
before the Closing Date, certified by a Financial Officer. Such financial
statements present fairly the financial condition and results of operations and
cash flows of the Borrower and its consolidated Subsidiaries as of such dates
and for such periods. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Borrower and its
consolidated Subsidiaries as of the dates thereof. Such financial statements
were prepared in accordance with GAAP applied on a consistent basis, subject,
in the case of


 


39

















 


unaudited financial
statements, to year-end audit adjustments, the absence of footnotes and an
exception for the calculation of taxes and tax accruals.


 


(b)   The Borrower has heretofore delivered to the
Lenders its unaudited pro forma consolidated balance sheet and related pro
forma statements of income, as of March 31, 2007, prepared giving effect
to the Transactions as if they had occurred, with respect to such balance
sheet, on such date and, with respect to such other financial statements, on
the first day of the 12-month period ending on such date. Such pro forma
financial statements have been prepared in good faith by the Borrower, based on
the assumptions used to prepare the pro forma financial information contained
in the Confidential Information Memorandum (which assumptions are believed by
the Borrower on the date hereof and on the Closing Date to be reasonable), are
based on the best information available to the Borrower as of the date of
delivery thereof, accurately reflect all adjustments required to be made to
give effect to the Transactions and present fairly on a pro forma basis the
estimated consolidated financial position of the Borrower and its consolidated
Subsidiaries as of such date and for such period, assuming that the
Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.


 


SECTION 3.06.
No Material Adverse Change.  No event, change or condition has
occurred that has had, or could reasonably be expected to have a material
adverse effect on the business, assets, liabilities, operations, financial
condition or operating results of Holdings, the Borrower and the Subsidiaries,
taken as a whole, since December 31, 2006.


 


SECTION 3.07.
Title to Properties; Possession
Under Leases.  (a) Each
of Holdings, the Borrower and the Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and assets
(including all Mortgaged Property), except for minor defects in title that do
not interfere in any material respect with its ability to conduct its business
as currently conducted or to utilize such properties and assets for their
intended purposes. All such material properties and assets are free and clear
of Liens, other than Liens expressly permitted by Section 6.02.


 


(b)   Except to the extent that failure to do so could
not reasonably be expected to result in a Material Adverse Effect, (i) each
of Holdings, the Borrower and the Subsidiaries has complied with all obligations
under all leases to which it is a party and all such leases are in full force
and effect and (ii) each of Holdings, the Borrower and the Subsidiaries
enjoys peaceful and undisturbed possession under all such leases.


 


(c)   As of the Closing Date, neither Holdings nor the
Borrower has received any notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting the Mortgaged Properties or any
sale or disposition thereof in lieu of condemnation.


 


(d)   As of the Closing Date, none of Holdings, the
Borrower or any of the Subsidiaries is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any Mortgaged Property or any interest therein.


 


40

















 


SECTION 3.08.
Subsidiaries.  Schedule 3.08 sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership interest
of Holdings or the Borrower therein. The shares of capital stock or other
ownership interests so indicated on Schedule 3.08 are fully paid and
non-assessable and are owned by Holdings or the Borrower, directly or
indirectly, free and clear of all Liens (other than Liens created under the
Security Documents or any First Priority Lien).


 


SECTION 3.09.
Litigation; Compliance
with Laws.  (a) Except
as set forth on Schedule 3.09, there are no actions, suits or proceedings at
law or in equity or by or before any Governmental Authority now pending or, to
the knowledge of Holdings or the Borrower, threatened against or affecting
Holdings or the Borrower or any Subsidiary or any business, property or rights
of any such person (i) that involve any Loan Document or the Transactions
or (ii) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.


 


(b)   Since the date of this Agreement, there has been
no change in the status of the matters disclosed on Schedule 3.09 that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.


 


(c)   None of Holdings, the Borrower or any of the
Subsidiaries or any of their respective material properties or assets is in
violation of, nor will the continued operation of their material properties and
assets as currently conducted violate, any law, rule or regulation
(including any zoning, building, Environmental Law, ordinance, code or approval
or any building permits) or any restrictions of record or agreements affecting
the Mortgaged Property, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.


 


(d)   Certificates of occupancy and permits are in
effect for each Mortgaged Property as currently constructed, and true and
complete copies of such certificates of occupancy have been delivered to the
Collateral Agent as mortgagee with respect to each Mortgaged Property.


 


SECTION 3.10.
Agreements.  (a) None of Holdings, the Borrower
or any of the Subsidiaries is a party to any agreement or instrument or subject
to any corporate restriction that has resulted or could reasonably be expected
to result in a Material Adverse Effect.


 


(b)   None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Indebtedness, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could reasonably
be expected to result in a Material Adverse Effect.


 


SECTION 3.11.
Federal Reserve Regulations.  (a) None of Holdings, the Borrower
or any of the Subsidiaries is engaged principally, or as one of its important


 


41

















 


activities, in the
business of extending credit for the purpose of buying or carrying Margin
Stock.


 


(b)   No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation T, U or X.


 


SECTION 3.12.
Investment Company Act. None of Holdings, the Borrower or any
Subsidiary is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.


 


SECTION 3.13.
Use of Proceeds. The Borrower will use the proceeds of
the Loans only for the purposes specified in the introductory statement to this
Agreement.


 


SECTION 3.14.
Tax Returns. Each of Holdings, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, and all material
state, local and foreign tax returns or materials required to have been filed
by it and has paid or caused to be paid all material taxes due and payable by
it and all assessments received by it, except taxes that are being contested in
good faith by appropriate proceedings and for which Holdings, the Borrower or
such Subsidiary, as applicable, shall have set aside on its books adequate
reserves.


 


SECTION 3.15.
No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Holdings or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact
or omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading; provided
that to the extent any such information, report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or projection,
each of Holdings and the Borrower represents only that it acted in good faith
and utilized reasonable assumptions (based upon accounting principles
consistent with the historical audited financial statements of the Borrower)
and due care in the preparation of such information, report, financial
statement, exhibit or schedule.


 


SECTION 3.16.
Employee Benefit Plans. (a) Each of the Borrower and its
ERISA Affiliates is in compliance with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder, except
as could not reasonably be expected to have a Material Adverse Effect. No ERISA
Event has occurred or is reasonably expected to occur that, alone or when taken
together with all other such ERISA Events, could reasonably be expected to
result in a Material Adverse Effect. The fair market value of all the assets
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) was not, as of the last annual
valuation date applicable thereto, less than 80% of the present value of all
benefit


 


42

















 


liabilities under such
Plan, and the fair market value of all assets of all underfunded Plans (based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) was not, as of the last annual valuation dates
applicable thereto, less than 80% of the present value of all benefit
liabilities of such underfunded Plans.


 


(b)   Each Foreign Pension Plan is in compliance in all
material respects with all requirements of law applicable thereto and the
respective requirements of the governing documents for such plan, except as,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. With respect to each Foreign Pension Plan, none of
Holdings, its Affiliates or any of their respective directors, officers,
employees or agents has engaged in a transaction that could subject Holdings,
the Borrower or any Subsidiary, directly or indirectly, to a tax or civil
penalty that could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. With respect to each Foreign Pension Plan,
reserves have been established in the financial statements furnished to Lenders
in respect of any unfunded liabilities in accordance with applicable law and
prudent business practice or, where required, in accordance with ordinary
accounting practices in the jurisdiction in which such Foreign Pension Plan is
maintained, except as could not reasonably be expected to have a Material
Adverse Effect. The aggregate unfunded liabilities with respect to such Foreign
Pension Plans could not reasonably be expected to result in a Material Adverse
Effect; the fair market value of the assets of all such Foreign Pension Plans
(based on those assumptions used to fund each such Foreign Pension Plan) was
not, as of the last annual valuation date applicable thereto, less than 80% of
the present value of all the aggregate accumulated benefit liabilities of such
Foreign Pension Plans.


 


SECTION 3.17.
Environmental Matters. (a) Except
as set forth in Schedule 3.17 and except with respect to any other matters
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, none of Holdings, the Borrower or any of
the Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.


 


(b)   Since the date of this Agreement, there has been
no change in the status of any matters disclosed on Schedule 3.17 or any new
matters that, individually or in the aggregate, have resulted in, or materially
increased the likelihood of, a Material Adverse Effect.


 


SECTION 3.18. Insurance. Schedule
3.18 sets forth a true, complete and correct description of all insurance
maintained by the Borrower or by the Borrower for its Subsidiaries as of the
date hereof and the Closing Date. As of each such date, such insurance is in
full force and effect and all premiums have been duly paid. The Borrower and
its Subsidiaries have insurance in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice for each
applicable jurisdiction.


 


43














 


SECTION 3.19. Security Documents.  (a) The Guarantee and
Collateral Agreement, upon execution and delivery thereof by the parties
thereto, will create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Guarantee and Collateral Agreement) and the
proceeds thereof and (i) when the Pledged Collateral (as defined in the
Guarantee and Collateral Agreement) is delivered to the collateral agent under
the First Lien Guarantee and Collateral Agreement (who will hold such Pledged
Collateral as bailee for perfection for the Collateral Agent), the Lien  created under Guarantee and Collateral
Agreement shall constitute a fully perfected first priority (subject to the
Intercreditor Agreement) Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Pledged Collateral, in each case prior
and superior in right to any other person other than, pursuant to the terms of
the Intercreditor Agreement, the First Lien Secured Parties (as defined in the
Intercreditor Agreement), and (ii) when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19(a), the
Lien created under the Guarantee and Collateral Agreement will constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Collateral (other than Intellectual
Property, as defined in the Guarantee and Collateral Agreement), in each case prior
and superior in right to any other person, other than with respect to Liens
expressly permitted by Section 6.02.


 


(b)   Upon the recordation of
the Guarantee and Collateral Agreement (or a short-form security agreement in
form and substance reasonably satisfactory to the Borrower and the Collateral
Agent) with the United States Patent and Trademark Office and the United States
Copyright Office, together with the financing statements in appropriate form
filed in the offices specified on Schedule 3.19(a), Lien created under the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Intellectual Property (as defined in the Guarantee and Collateral Agreement)
in which a security interest may be perfected by filing in the United States
and its territories and possessions, in each case prior and superior in right
to any other person other than, pursuant to the terms of the Intercreditor
Agreement, the First Lien Secured Parties (as defined in the Intercreditor
Agreement) (it being understood that subsequent recordings in the United States
Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks and patents, trademark and
patent applications and registered copyrights acquired by the Loan Parties
after the date hereof).


 


(c)   The Mortgages are
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable Lien on all of the Loan
Parties’ right, title and interest in and to the Mortgaged Property thereunder
and the proceeds thereof, and when the Mortgages are filed in the offices
specified on Schedule 3.19(c), the Mortgages shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Mortgaged Property and the proceeds thereof, in each case prior
and superior in right to any other person, other than with respect to the
rights of persons pursuant to Liens expressly permitted by Section 6.02.


 


44

















 


SECTION 3.20. Location of Real Property and Leased
Premises.  (a) Schedule 3.20(a) lists
completely and correctly as of the Closing Date all real property owned by the
Borrower and the Subsidiaries and the addresses thereof. The Borrower and the
Subsidiaries own in fee all the real property set forth on Schedule 3.20(a).


 


(b)   Schedule 3.20(b) lists completely
and correctly as of the Closing Date all real property leased by the Borrower
and the Subsidiaries and the addresses thereof. The Borrower and the
Subsidiaries have valid leases in all the real property set forth on Schedule
3.20(b).


 


SECTION 3.21.
Labor Matters.  As of the date hereof and the
Closing Date, there are no strikes, lockouts or slowdowns against Holdings, the
Borrower or any Subsidiary pending or, to the knowledge of Holdings or the
Borrower, threatened that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Except to the extent that
the same could not reasonably be expected to result in a Material Adverse
Effect, the hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters.


 


SECTION 3.22.
Solvency.  Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of the Loan Parties, taken as a
whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value
of the property of the Loan Parties, taken as a whole, will be greater than the
amount that will be required to pay the probable liability of their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Loan Parties, taken
as a whole, will be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Loan Parties, taken as a whole, will not have
unreasonably small capital with which to conduct the business in which they are
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.


 


SECTION 3.23.
Transaction Documents.  Holdings and the Borrower have delivered
to the Administrative Agent a complete and correct copy of the Merger Agreement
(including all schedules, exhibits, amendments, supplements and modifications
thereto). Neither Holdings, the Borrower nor any Loan Party or, to the
knowledge of Holdings or the Borrower, any other person party thereto is in
default in the performance or compliance with any material provisions thereof.


 


SECTION 3.24. Sanctioned
Persons.  None of
Holdings, the Borrower or any Subsidiary nor, to the knowledge of the Borrower,
any director, officer, agent, employee or Affiliate of Holdings, the Borrower
or any Subsidiary is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury


 


45

















 


Department (“OFAC”);  and the
Borrower will not directly or indirectly use the proceeds of the Loans or
otherwise make available such proceeds to any person, for the purpose of
financing the activities of any person, currently subject to any U.S. sanctions
administered by OFAC.


 


ARTICLE IV


 


Conditions of
Lending


 


The obligations of
the Lenders to make Loans hereunder on the Closing Date are subject to the
satisfaction of the following conditions:


 


(a)  The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03.


 


(b)  (i) The representations and warranties set forth in
Sections 3.01, 3.02, 3.03, 3.11, 3.12, 3.19 (subject to paragraph (j) below)
and 3.24 shall be true and correct in all material respects on the Closing Date
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date
and (ii) the condition relating to the accuracy of the representations and
warranties of the Company in the Merger Agreement as are material to the
interests of the Lenders shall have been satisfied.


 


(c)  At the time of and immediately after the making of such
Loans, no Default or Event of Default shall have occurred and be continuing.


 


(d)  The Administrative Agent shall have received, on behalf
of itself and the Lenders, a written opinion of (i) Weil,
Gotshal & Manges LLP, counsel for Holdings and the Borrower,
substantially to the effect set forth in Exhibit F-1 and (ii) Murtha
Cullina LLP, substantially to the effect set forth in Exhibit F-2, in each
case (A) dated the Closing Date, (B) addressed to the Administrative
Agent and the Lenders, and (C) covering such other matters relating to the
Loan Documents and the Transactions as the Administrative Agent shall
reasonably request, and Holdings and the Borrower hereby request such counsel
to deliver such opinions.


 


(e)  The Administrative Agent shall have
received (i) a copy of the certificate or articles of incorporation (or
other similar formation document), including all amendments thereto, of each
Loan Party, certified as of a recent date by the Secretary of State (or
equivalent) of the state of its organization, and a certificate of legal
existence and, if available in such jurisdiction, certificate as to the good
standing of each Loan Party as of a recent date, from such Secretary of State;
(ii) a certificate of the Secretary or Assistant Secretary of each Loan
Party dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws (or equivalent) of such Loan Party as in
effect on the Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of resolutions (or equivalent) duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to


 


46

















 


which such person is a
party and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of such
Loan Party have not been amended since the date of the last amendment thereto
shown on the certificate of legal existence or good standing (or equivalent) or
state certified copies of such documents furnished pursuant to clause
(i) above, and (D) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party; and (iii) a certificate
of another officer as to the incumbency and specimen signature of the Secretary
or Assistant Secretary executing the certificate pursuant to clause
(ii) above.


 


(f)  The
Administrative Agent shall have received a certificate, dated the Closing Date
and signed by a Responsible Officer of the Borrower, confirming compliance with
the conditions precedent set forth in paragraph (b) of this
Article IV as of the Closing Date.


 


(g)  The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Closing Date, including, to the extent invoiced
prior to the Closing Date, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder or under
any other Loan Document.


 


(h)  The
Security Documents shall have been duly executed by each Loan Party that is to
be a party thereto and shall be in full force and effect on the Closing Date.
The Collateral Agent on behalf of the Secured Parties shall have been granted a
security interest in the Collateral of the type and priority described in each
Security Document.


 


(i)  The
Collateral Agent shall have received a Perfection Certificate with respect to
the Loan Parties dated the Closing Date and duly executed by a Responsible
Officer of Holdings and the Borrower, and shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) of formation
of such persons, in which the chief executive office of each such person is
located and in the other jurisdictions in which such persons maintain property,
in each case as indicated on such Perfection Certificate, together with copies
of the financing statements (or similar documents) disclosed by such search,
and accompanied by evidence satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been or will be contemporaneously released
or terminated.


 


(j)  Except as otherwise specifically
contemplated hereunder or by the Security Documents, (i) each of the
Security Documents, in form and substance satisfactory to the Lenders, relating
to each of the Mortgaged Properties shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full
force and effect, (ii) each of such Mortgaged Properties shall not be
subject to any Lien other than those permitted under Section 6.02 or Liens
which shall be paid from the proceeds of the First Credit Event and for which
the Borrower has received a commitment from the holder thereof to release the
same upon payoff from the proceeds of the First Credit Event and
(iii) each of such Security Documents shall be in proper form for filing
and


 


47

















 


recording in the
recording office as specified on Schedule 3.19(c); provided that to the extent a perfected security interest in
any assets of a type that cannot be perfected by the filing of a UCC financing
statement or the delivery of stock certificates is not able to be provided on
the Closing Date after the Borrower’s use of commercially reasonable efforts to
do so, the providing of a perfected security interest in such assets shall not
constitute a condition precedent to the Borrowing on the Closing Date but such
requirement to create a perfected security interest in such assets shall be
satisfied after the Closing Date pursuant to Section 5.13.


 


(k)  The
Administrative Agent shall have received a  copy
of, or a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents, each
of which shall be endorsed or otherwise amended to include a customary lender’s
loss payable endorsement and to name the Collateral Agent as additional
insured, in form and substance satisfactory to the Administrative Agent.


 


(l)  The
Acquisition and the other Transactions shall be consummated substantially
simultaneously with the initial funding of Loans on the Closing Date in
accordance with applicable law and on the terms in this Agreement and in the
Merger Agreement (without any amendment, modification or waiver thereof that is
materially adverse to the Lenders (as reasonably determined by the
Administrative Agent) without the prior written consent of the Administrative
Agent). The Administrative Agent shall have received copies of the Merger
Agreement and all certificates, opinions and other documents delivered
thereunder, certified by a Financial Officer as being complete and correct.


 


(m)  The
Equity Contribution shall have been made and the Administrative Agent shall be
satisfied with the capitalization and structure of Holdings and the Borrower.


 


(n)  All
principal, premium, if any, interest, fees and other amounts due or outstanding
under the Existing Debt shall have been, or substantially simultaneously with
the initial funding of Loans on the Closing Date shall be, paid in full, the
commitments thereunder terminated and all guarantees and security in support
thereof discharged and released, and the Administrative Agent shall have
received reasonably satisfactory evidence thereof. Immediately after giving
effect to the Transactions and the other transactions contemplated hereby,
Holdings, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (a) Indebtedness outstanding
under this Agreement, (b) the First Lien Loans, (c) Indebtedness set
forth on Schedule 6.01 and (d) other Indebtedness in an outstanding
principal amount not to exceed $100,000 in the aggregate.


 


(o)  The Administrative Agent shall have
received a certificate from the chief financial 
officer  of Holdings  certifying 
that  Holdings  and 
its  subsidiaries,  on  a
consolidated basis after giving effect to the Transactions to occur on the
Closing Date, are solvent.


 


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(p)  The
Lenders shall have received, to the extent reasonably requested, at least five
Business Days prior to the Closing Date, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the
USA PATRIOT Act.


 


(q)  The
Administrative Agent shall have received a certificate, dated the Closing Date
and signed by a Responsible Officer of the Company, certifying that not less
than $10,000,000 in aggregate cash liquidity is in bank accounts in
jurisdictions appropriate for carrying out the Company’s operational objectives
(which, for greater certainty, shall not include financing in whole or in part
any Permitted Acquisition), including planned Capital Expenditures, during the
period from the Closing Date to the first anniversary of the Closing Date.


 


The Borrowing of
the Loans on the Closing Date shall be deemed to constitute a representation
and warranty by the Borrower and Holdings on such date as to the matters
specified in paragraphs (b) of this Article IV.


 


ARTICLE V


 


Affirmative
Covenants


 


Each of Holdings
and the Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full, unless
the Required Lenders shall otherwise consent in writing, each of Holdings and
the Borrower will, and will cause each of the Subsidiaries to:


 


SECTION 5.01.
Existence; Compliance with
Laws; Businesses and Properties.  (a)  Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under
Section 6.05.


 


(b)   Do
or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names material to the
conduct of its business; maintain and operate such business in substantially
the manner in which it is presently conducted and operated; comply in all
material respects with all applicable laws, rules, regulations and decrees and
orders of any Governmental Authority, whether now in effect or hereafter enacted;
and at all times maintain and preserve all property material to the conduct of
such business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.


 


SECTION 5.02. Insurance.
(a)  Keep its  insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to


 


49

















 


such
extent and against such risks, including fire and other risks insured against
by extended coverage, as is customary with companies in the same or similar
businesses operating in the same or similar locations or jurisdictions,
including, where applicable, public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
and maintain such other insurance as may be required by applicable law.


 


(b)   Cause all such policies
covering any Collateral to be endorsed or otherwise amended to include a
customary lender’s loss payable endorsement, in form and substance satisfactory
to the Administrative Agent and the Collateral Agent, which endorsement
(subject to the Intercreditor Agreement) shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent of the occurrence of an Event
of Default, the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Loan Parties under such policies directly to the Collateral
Agent; cause all such policies to provide that neither the Borrower, the
Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver evidence reasonably satisfactory to the
Collateral Agent of all such policies; cause each such policy to provide that
it shall not be canceled or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days’ prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days’ prior
written notice thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver evidence reasonably satisfactory to the Administrative Agent and
the Collateral Agent, prior to the cancellation or nonrenewal of any such
policy of insurance, of renewal of a policy previously delivered to the
Administrative Agent and the Collateral Agent, together with evidence
reasonably satisfactory to the Administrative Agent and the Collateral Agent of
payment of the premium therefor.


 


(c)   If at any time the area
in which the Premises (as defined in the Mortgages) are located is designated
(i) a “flood hazard area” in any Flood Insurance Rate Map published by the
Federal Emergency Management Agency (or any successor agency), obtain flood
insurance in such total amount as the Administrative Agent, the Collateral
Agent or the Required Lenders may from time to time reasonably require, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as it may be amended from time to time,
or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount
as the Administrative Agent, the Collateral Agent or the Required Lenders may
from time to time reasonably require.


 


(d)   With
respect to any Mortgaged Property, carry and maintain comprehensive general
liability insurance including the “broad form CGL endorsement” or its
equivalent and coverage on an occurrence basis against claims made for personal
injury (including bodily injury, death and property damage) and umbrella
liability insurance against any


 


50

















 


and
all causes of loss, in no event for a combined single limit of less than $10,000,000
naming the Collateral Agent as an additional insured (subject to the
Intercreditor Agreement), on forms satisfactory to the Collateral Agent.


 


(e)   Notify the Administrative Agent and the Collateral
Agent promptly whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under
this Section 5.02 is taken out by any Loan Party; and promptly deliver
evidence reasonably satisfactory to the Administrative Agent and the Collateral
Agent of such policy or policies.


 


SECTION 5.03. Obligations
and Taxes.  Pay
its Indebtedness and other material obligations promptly and in accordance with
their terms and pay and discharge all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise that, if unpaid, might give rise to a Lien upon such properties or
any part thereof; provided, however, that
such payment and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP


 


SECTION 5.04. Financial
Statements, Reports, etc.  In
the case of the Borrower, furnish to the Administrative Agent, which shall
furnish to each Lender:


 


(a)   within 120 days after
the end of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, together with comparative figures for the
immediately preceding fiscal year, all audited by UHY LLP or other independent
public accountants of recognized national standing and accompanied by an
opinion of such accountants (which opinion shall be without a “going concern”
or like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated financial
statements fairly present the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;


 


(b)   within
45 days after the end of each of the first three fiscal quarters of each fiscal
year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and comparative figures for the same periods in the immediately
preceding fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;


 


51

















 


(c)   concurrently with any delivery of financial
statements under paragraph (a) or (b) above, a certificate of the
accounting firm (in the case of paragraph (a)) or Financial Officer (in the
case of paragraph (b)) opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to accounting
matters and disclaim responsibility for legal interpretations)
(i) certifying that no Event of Default or Default has occurred or, if
such an Event of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
covenants contained in Sections 6.10 and 6.11 and, in the case of a certificate
delivered with the financial statements required by paragraph (a) above,
setting forth the Borrower’s calculation of Excess Cash Flow;


 


(d)   within 90 days after the beginning of each fiscal
year of the Borrower, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flows as of the end of and for such fiscal year
and setting forth the assumptions used for purposes of preparing such budget)
and, promptly when available, any significant revisions of such budget;


 


(e)   promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by Holdings, the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;


 


(f)   promptly after the receipt thereof by Holdings or
the Borrower or any of their respective subsidiaries, a copy of any “management
letter” received by any such person from its certified public accountants and
the management’s response thereto;


 


(g)   promptly after the request by any Lender, all
documentation and other information that such Lender reasonably requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the
USA PATRIOT Act;


 


(h)   promptly
after the request by the Administrative Agent or any Lender, on and after the
effectiveness of the applicable provisions of the Pension Act, copies of
(i) any documents described in Section 101(k)(l) of ERISA that
the Borrower or any of its ERISA Affiliates may request with respect to any
Multiemployer Plan and (ii) any notices described in
Section 101(1)(1) of ERISA that the Borrower or any of its ERISA
Affiliates may request with respect to any Multiemployer Plan; provided that if the Borrower or any of
its ERISA Affiliates has not requested such documents or notices from the
administrator or sponsor of the applicable Multiemployer Plan, the Borrower or
the applicable ERISA Affiliate shall promptly make a request for such documents
or notices from such administrator or sponsor and shall provide copies of such
documents and notices promptly after receipt thereof; and


 


52

















 


(i)   promptly,
from time to time, such other information regarding the operations, business
affairs and financial condition of Holdings, the Borrower or any Subsidiary, or
compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender may reasonably request.


 


Documents required to be
delivered pursuant to Section 5.04(e) may be delivered electronically
and if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto at
http://www.strlab.com/www/strlab/; or (ii) on which such documents are
posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or sponsored by the Administrative Agent); provided that: (x) the Borrower shall
deliver paper copies of such documents to the Administrative Agent if it so
requests or to any Lender that so requests the Borrower to deliver such paper
copies and (y) the Borrower shall notify the Administrative Agent and each
Lender of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such documents.


 


SECTION 5.05.
Litigation and Other Notices.  Furnish to the Administrative Agent and
each Lender prompt written notice of the following:


 


(a)   any
Event of Default or Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;


 


(b)   the
filing or commencement of, or any written threat or written notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against the
Borrower or any Affiliate thereof that could reasonably be expected to result
in a Material Adverse Effect;


 


(c)   the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;


 


(d)   any development that has resulted in, or could
reasonably be expected to result in a Material Adverse Effect; and


 


(e)   any change in the Borrower’s corporate rating by
S&P, in the Borrower’s corporate family rating by Moody’s or in the ratings
of the Credit Facility by S&P or Moody’s, or any notice from either such
agency indicating its intent to effect such a change or to place the Borrower
or the Credit Facility on a “CreditWatch” or “WatchList” or any similar list,
in each case with negative implications, or its cessation of, or its intent to
cease, rating the Borrower or the Credit Facility.


 


SECTION 5.06.
Information Regarding
Collateral.  (a) Furnish
to the Administrative Agent prompt written notice of any change (i) in any
Loan Party’s corporate name, (ii) in the jurisdiction of organization or
formation of any Loan Party, (iii) in any Loan Party’s identity or
corporate structure or (iv) in any Loan Party’s Federal


 


53

















 


Taxpayer Identification
Number. Holdings and the Borrower agree not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are reasonably required in order
for the Collateral Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral. Holdings
and the Borrower also agree promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.


 


(b)   In
the case of the Borrower, each year, at the time of delivery of the annual
financial statements with respect to the preceding fiscal year pursuant to
Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer (i) setting forth the information required pursuant to
Section 2 of the Perfection Certificate or confirming that there has been
no change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section 5.06 and (ii) to the extent
applicable, certifying that all Uniform Commercial Code financing statements (including
fixture filings, as applicable) or other appropriate filings recordings or
registrations, including all refilings, recordings and registrations,
containing a description of the Article 9 Collateral (as defined in the
Guarantee and Collateral Agreement) have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) of this Section 5.06(b) to the
extent necessary to protect and perfect the security interest for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period). Each certificate delivered pursuant to this
Section 5.06(b)(ii) shall identify in the format of Section 13
of the Perfection Certificate all Intellectual Property of any Loan Party in
existence on the date thereof and not then listed on the Perfection Certificate
or previously so identified to the Collateral Agent.


 


SECTION 5.07.
Maintaining Records; Access to
Properties and Inspections; Maintenance of Ratings.  (a) Keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
requirements of law are made of all dealings and transactions in relation to
its business and activities. Each Loan Party will, and will cause each of its
subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender to visit and inspect the financial records and the
properties of such person at reasonable times and as often as reasonably
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances and condition of such person with the officers
thereof and independent accountants therefor; provided
that as long as no Default or Event of Default shall have occurred
and shall be continuing, no more than one such site inspection may be conducted
in any calendar year (which shall be conducted by representatives designated by
the Administrative Agent).


 


(b)   In the case of Holdings and the
Borrower, use commercially reasonable efforts to cause the Credit Facility to
be continuously rated by S&P and Moody’s, and in the case of the Borrower,
use commercially reasonable efforts to maintain a corporate rating from S&P
and a corporate family rating from Moody’s, in each case in respect of the
Borrower.


 


54














 


SECTION 5.08.
Use of Proceeds.  Use the proceeds of the Loans only for
the purposes specified in the introductory statement to this Agreement.


 


SECTION 5.09.
Employee Benefits.  (a) With respect to any Plan or
Foreign Pension Plan sponsored or maintained by Borrower or any Subsidiary,
comply in all material respects with the applicable provisions of ERISA and the
Code and the laws applicable to any Foreign Pension Plan and (b) furnish
to the Administrative Agent as soon as possible after, and in any event within
ten days after any responsible officer of Holdings, the Borrower or any ERISA
Affiliate knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in a Material Adverse Effect, a statement of a Financial Officer of
Holdings or the Borrower setting forth details as to such ERISA Event and the
action, if any, that Holdings or the Borrower proposes to take with respect
thereto.


 


SECTION 5.10.
Compliance with Environmental
Laws.  Comply, and
use commercially reasonable efforts to cause all lessees and other persons
occupying its properties to comply, in all respects with all Environmental Laws
applicable to its operations and properties; obtain and renew all environmental
permits necessary for its operations and properties; and conduct any remedial
action in accordance with Environmental Laws, except where the failure to
comply therewith, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect; provided,
however, that none of Holdings, the Borrower or any Subsidiary shall
be required to undertake any remedial action required by Environmental Laws to
the extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect
to such circumstances in accordance with GAAP.


 


SECTION 5.11.
Further Assurances.  Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or
that the Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the
validity and first priority (subject to the Intercreditor Agreement) of the
security interests created or intended to be created by the Security Documents.
The Borrower will cause any subsequently acquired or organized Domestic
Subsidiary to become a Loan Party by executing the Guarantee and Collateral
Agreement and each applicable Security Document in favor of the Collateral
Agent. In addition, from time to time, the Borrower will, at its cost and
expense, promptly secure the Obligations by pledging or creating, or causing to
be pledged or created, perfected security interests with respect to such of its
assets and properties as the Administrative Agent or the Required Lenders shall
designate (it being understood that it is the intent of the parties that the
Obligations shall be secured by substantially all the assets of the Borrower
and its Domestic Subsidiaries (including real and other properties acquired
subsequent to the Closing Date)). Such security interests and Liens will be
created under the Security Documents and other security agreements, mortgages,
deeds of trust, leasehold mortgages, assignments of leases and rents,
modifications and other


 


55

















 


instruments and documents
in form and substance satisfactory to the Collateral Agent, and the Borrower
shall deliver or cause to be delivered to the Lenders all such instruments and
documents (including lien searches, surveys, abstracts, appraisals, legal
opinions and a policy or policies of title insurance issued by a nationally
recognized title insurance company, together with such endorsements, coinsurance
and reinsurance as may be requested by the Collateral Agent and the Lenders,
insuring the Mortgages as valid first liens, free of Liens other than those
permitted under Section 6.02) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Borrower agrees to
provide such evidence as the Collateral Agent shall reasonably request as to
the perfection and priority status of each such security interest and Lien. In
furtherance of the foregoing, the Borrower will give prompt notice to the
Administrative Agent of the acquisition by it or any of the Subsidiaries of any
real property (or any interest in real property) having a value in excess of
$1,000,000.


 


SECTION 5.12.
Interest Rate Protection.  No later than the 90th day after the
Closing Date, the Borrower shall enter into, and for a minimum of three years
thereafter maintain, Hedging Agreements acceptable to the Administrative Agent
that result in at least 50% of the aggregate principal amount of its funded
long-term Indebtedness being effectively subject to a fixed or maximum interest
rate acceptable to the Administrative Agent.


 


SECTION 5.13.
Post-Closing Items.  Holdings and the Borrower shall, and
shall cause each of the Subsidiaries to, take all necessary actions to satisfy
the requirements set forth on Schedule 5.13 within the period specified on such
schedule (or such longer period as may be consented to by the Administrative
Agent).


 


SECTION 5.14.
Funds Update.  The Borrower shall, with respect to each
of the first four fiscal quarters ending after the Closing Date, provide the
Administrative Agent with reasonably detailed information about the uses of the
$10,000,000 described in paragraph (q) of Article IV, all of which
such uses to be consistent with those contemplated by paragraph (q) of Article IV.


 


SECTION 5.15.
Purchase Price Adjustments.  Holdings and the Borrower shall, take all
actions reasonably necessary to ensure that all purchase price adjustments
related to the Transactions payable by the sellers shall be paid to the
Borrower.


 


ARTICLE VI


 


Negative
Covenants


 


Each of Holdings
and the Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all fees and all other expenses
or amounts payable under any Loan Document have been paid in full, unless the
Required Lenders shall otherwise consent in writing, neither Holdings nor the
Borrower will, nor will they cause or permit any of the Subsidiaries to:


 


56

















 


SECTION 6.01.
Indebtedness.  Incur, create, assume or permit to exist
any Indebtedness, except:


 


(a)   Indebtedness existing on the date hereof and set
forth in Schedule 6.01 and any extensions, renewals or replacements of such
Indebtedness to the extent the principal amount of such Indebtedness is not
increased, neither the final maturity nor the weighted average life to maturity
of such Indebtedness is decreased, such Indebtedness, if subordinated to the
Obligations, remains so subordinated on terms no less favorable to the Lenders,
and the original obligors in respect of such Indebtedness remain the only
obligors thereon;


 


(b)   Indebtedness created hereunder and under the other
Loan Documents;


 


(c)   intercompany Indebtedness of the Borrower and the
Subsidiaries to the extent permitted by Section 6.04(c);


 


(d)   Indebtedness of the Borrower or any Subsidiary
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness
is incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this Section 6.01(d), when combined
with the aggregate principal amount of all Capital Lease Obligations and
Synthetic Lease Obligations incurred pursuant to Section 6.01(e), shall
not exceed $10,000,000 at any time outstanding;


 


(e)   Capital Lease Obligations and Synthetic Lease
Obligations in an aggregate principal amount, when combined with the aggregate
principal amount of all Indebtedness incurred pursuant to Section 6.01(d), not
in excess of $10,000,000 at any time outstanding;


 


(f)   Attributable Debt in respect of Sale/Leaseback
Transactions; provided, however, that
the aggregate principal amount of all Indebtedness then outstanding and
incurred pursuant to this clause (f) does not exceed (i) $6,000,000
in respect of property owned by the Borrower or any Subsidiary on the Closing
Date or (ii) $6,000,000 in respect of any property acquired by the
Borrower or any Subsidiary after the Closing Date;


 


(g)   Indebtedness under performance bonds or with
respect to workers’ compensation claims, in each case incurred in the ordinary
course of business;


 


(h)   Indebtedness incurred by Foreign Subsidiaries in
an aggregate principal amount not exceeding $12,000,000 at any time
outstanding;


 


(i)   Indebtedness under the First Lien Credit Agreement
and any refinancings thereof in an aggregate principal amount at any time
outstanding not


 


57

















 


to exceed the Cap
Amount as permitted under and as defined in the Intercreditor Agreement;


 


(j)   Indebtedness under the Spanish Subsidized Loans in
an aggregate principal amount not exceeding $5,000,000 at any time outstanding;
and


 


(k)   other unsecured Indebtedness of the Borrower or
the Subsidiaries in an aggregate principal amount not exceeding $6,000,000 at
any time outstanding.


 


SECTION 6.02.
Liens.  Create, incur, assume or permit to exist
any Lien on any property or assets (including Equity Interests or other
securities of any person, including the Borrower or any Subsidiary) now owned
or hereafter acquired by it or on any income or revenues or rights in respect
of any thereof, except:


 


(a)   Liens on property or assets of the Borrower and
its Subsidiaries existing on the date hereof and set forth in Schedule 6.02; provided that such Liens shall secure only
those obligations which they secure on the date hereof and extensions, renewals
and replacements thereof permitted hereunder;


 


(b)   any Lien created under the Loan Documents;


 


(c)   any First Priority Liens;


 


(d)   any Lien existing on any property or asset prior
to the acquisition thereof by the Borrower or any Subsidiary or existing on any
property or assets of any person that becomes a Subsidiary after the date
hereof prior to the time such person becomes a Subsidiary, as the case may be; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
person becoming a Subsidiary, (ii) such Lien does not apply to any other
property or assets of Holdings, the Borrower or any Subsidiary and (iii) such
Lien secures only those obligations which it secures on the date of such
acquisition or the date such person becomes a Subsidiary, as the case may be;


 


(e)   Liens for taxes not yet due or which are being
contested in compliance with Section 5.03 or are immaterial in amount;


 


(f)   carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business and
securing obligations that are not due and payable or which are being contested
in compliance with Section 5.03;


 


(g)   pledges and deposits made in the ordinary course
of business in compliance with workmen’s compensation, unemployment insurance
and other social security laws or regulations;


 


(h)   deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital Lease Obligations),
statutory


 


58

















 


obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;


 


(i)   zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances incurred in
the ordinary course of business which, in the aggregate, are not substantial in
amount and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;


 


(j)   purchase money security interests in real
property, improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by Section 6.01, (ii) such
security interests are incurred, and the Indebtedness secured thereby is
created, within 90 days after such acquisition (or construction), (iii) the
Indebtedness secured thereby does not exceed 100% of the lesser of the cost or
the fair market value of such real property, improvements or equipment at the
time of such acquisition (or construction) and (iv) such security
interests do not apply to any other property or assets of the Borrower or any
Subsidiary;


 


(k)   Liens arising out of judgments or awards in
respect of which Holdings, the Borrower or any of the Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review in respect of
which there shall be secured a subsisting stay of execution pending such appeal
or proceedings; provided that the
aggregate amount of all such judgments or awards (and any cash and the fair
market value of any property subject to such Liens) does not exceed $6,000,000
at any time outstanding;


 


(l)   any Lien securing Indebtedness incurred by the
Borrower or any Subsidiary pursuant to Section 6.01(f); provided that any such Liens attach only
to the property that is the subject of, and proceeds thereof in connection
with, the applicable Sale/Leaseback Transaction and shall not attach to any
other property of the Borrower or any Subsidiary theretofore existing or
(except for any such proceeds) which arises after the date thereof;


 


(m)   Liens on assets of Foreign Subsidiaries; provided that (i) such Liens do not
extend to, or encumber, assets that constitute Collateral or the Equity
Interests of the Borrower or any of the Subsidiaries, and (ii) such Liens
extending to the assets of any Foreign Subsidiary secure only Indebtedness
incurred by such Foreign Subsidiary pursuant to Section 6.01(h); and


 


(n)   other Liens that do not, individually or in the
aggregate, secure obligations (or encumber property with a fair market value)
in excess of $3,000,000 at any one time.


 


SECTION 6.03.
Sale/LeaseBack Transactions.  Enter into any Sale/Leaseback
Transaction unless (a) the sale or transfer of such property is permitted
by Section 6.05


 


59

















 


and (b) any Capital
Lease Obligations, Synthetic Lease Obligations or Liens arising in connection
therewith are permitted by Sections 6.01 and 6.02, as the case may be.


 


SECTION 6.04.
Investments, Loans and Advances.  Purchase, hold or acquire any Equity
Interests, evidences of indebtedness or other securities of, make or permit to
exist any loans or advances to, or make or permit to exist any investment or
any other interest in, any other person, except:


 


(a) (i)   investments by Holdings, the Borrower and
the Subsidiaries existing on the date hereof in the Equity Interests of the
Borrower and the Subsidiaries, (ii) additional investments by Holdings,
the Borrower and the Subsidiaries in the Equity Interests of the Borrower and
the Subsidiaries and (iii) investments in STR India Pvt. Ltd. in an amount
not to exceed $5,000,000 in the aggregate; provided
that (A) any such Equity Interests held by a Loan Party other
than Equity Interests in Excluded Assets (as defined in the Guarantee and
Collateral Agreement) shall be pledged pursuant to the Guarantee and Collateral
Agreement (subject to the limitations applicable to voting stock of a Foreign
Subsidiary referred to therein) and (B) the aggregate amount of
investments made after the Closing Date (other than pursuant to clause (iii) above)
by Loan Parties in, and loans and advances made after the Closing Date by Loan
Parties to, Subsidiaries that are not Loan Parties (determined without regard
to any write-downs or write-offs of such investments, loans and advances) shall
not exceed $12,000,000 at any time outstanding;


 


(b) Permitted Investments;


 


(c) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided that (i) any such loans and
advances made by a Loan Party to Subsidiaries that are not Loan Parties shall
be evidenced by a promissory note pledged to the Collateral Agent for the
ratable benefit of the Secured Parties pursuant to the Guarantee and Collateral
Agreement and (ii) the amount of such loans and advances made by Loan
Parties to Subsidiaries that are not Loan Parties shall be subject to the
limitation set forth in clause (a) above;


 


(d) investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;


 


(e) the Borrower and the Subsidiaries may make
loans and advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $2,000,000;


 


(f) the Borrower and the Subsidiaries may enter
into Hedging Agreements that (i) are required by Section 5.12 or (ii) are
not speculative in nature and are


 


60

















 


related to income derived from foreign operations of the Borrower or
any Subsidiary or otherwise related to purchases from foreign suppliers;


 


(g) the Borrower or any Subsidiary may acquire
all or substantially all the assets of a person or line of business of such
person, or not less than 85% of the Equity Interests (other than directors’
qualifying shares) of a person (referred to herein as the “Acquired Entity”); provided that (i) such
acquisition was not preceded by an unsolicited tender offer for such Equity
Interests by, or proxy contest initiated by, Holdings, the Borrower or any
Subsidiary; (ii) the Acquired Entity shall be in a similar or reasonably
related or incidental line of business to those of the Borrower and the
Subsidiaries as conducted during the current and most recently concluded
calendar year; and (iii) at the time of such transaction (A) both before and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing; (B) the Borrower would be in compliance with the
covenant set forth in Sections 6.11 as of the most recently completed period of
four consecutive fiscal quarters ending prior to such transaction for which the
financial statements and certificates required by Section 5.04(a) or
5.04(b), as the case may be, and 5.04(c) have been delivered, after giving
pro forma effect to such transaction and to any other event occurring after
such period as to which pro forma recalculation is appropriate (including any
other transaction described in this Section 6.04(g) occurring after
such period) as if such transaction had occurred as of the first day of such
period; (C) the total consideration paid in connection with such
acquisition and any other acquisitions pursuant to this Section 6.04(g) (including
any Indebtedness of the Acquired Entity that is assumed by the Borrower or any
Subsidiary following such acquisition and any payments following such
acquisition pursuant to earn-out provisions or similar obligations) shall not
in the aggregate exceed $50,000,000 and (D) the Borrower shall have
delivered a certificate of a Financial Officer, certifying as to the foregoing
and containing reasonably detailed calculations in support thereof, in form and
substance satisfactory to the Administrative Agent; (iv) the Borrower
shall comply, and shall cause the Acquired Entity to comply, with the
applicable provisions of Section 5.11 and the Security Documents; and (v) if
the Acquired Entity would not constitute a wholly owned Subsidiary of the
Borrower and would be required to become a Subsidiary Guarantor hereunder, each
holder of an Equity Interest therein (other than the Borrower or any wholly
owned Subsidiary) shall have executed and delivered to the Collateral Agent a
consent and waiver in form and substance reasonably satisfactory to the
Collateral Agent permitting such Acquired Entity to become a Subsidiary
Guarantor hereunder and a party to the Security Documents (any acquisition of
an Acquired Entity meeting all the criteria of this Section 6.04(g) being
referred to herein as a “Permitted
Acquisition”);  and


 


(h) in addition to investments permitted by
paragraphs (a) through (g) above, additional investments, loans and
advances by the Borrower and the Subsidiaries so long as the aggregate amount
invested, loaned or advanced pursuant to this paragraph (h) (determined
without regard to any write-downs or


 


61

















 


write-offs of such investments, loans and advances) does not exceed $6,000,000
in the aggregate.


 


SECTION 6.05.
Mergers, Consolidations, Sales
of Assets and Acquisitions.  (a) Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all
the assets (whether now owned or hereafter acquired) of the Borrower or less
than all the Equity Interests of any Subsidiary, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or any substantial
part of the assets of any other person, except that (i) the Borrower and
any Subsidiary may purchase and sell inventory in the ordinary course of
business and (ii) if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing (u) any wholly owned Subsidiary may merge into the Borrower in
a transaction in which the Borrower is the surviving corporation, (v) Holdings
may merge, liquidate, reorganize or otherwise be restructured into a
newly-formed Loan Party in a transaction the purpose of which is to re-organize
Holdings as a corporation; provided that
(1) such transaction (or series of transactions) does not result in a
material increase in the Tax obligations payable in cash (on a consolidated
basis) for Holdings, the Borrower, each Subsidiary of the Borrower and the
holders of Equity Interests in Holdings and (2) immediately following such
transaction, Holdings is in compliance with all requirements of the Guarantee
and Collateral Agreement and has satisfied its obligations under Section 5.11
(including the execution of any further documents, financing statements,
agreements and instruments, and the taking of all other actions, that may be
reasonably requested by the Required Lenders, the Administrative Agent or the
Collateral Agent), (w) any wholly owned Subsidiary may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in which
the surviving entity is a wholly owned Subsidiary and no person other than the
Borrower or a wholly owned Subsidiary receives any consideration (provided
that if any party to any such transaction is a Loan Party,
the surviving entity of such transaction shall be a Loan Party), (x) the
Borrower and the Subsidiaries may make Permitted Acquisitions and (y) any
Inactive Subsidiary of the Borrower may be dissolved or liquidated.


 


(b)  Make
any Asset Sale otherwise permitted under paragraph (a) above unless (i) such
Asset Sale is for consideration at least 75% of which is cash, (ii) such
consideration is at least equal to the fair market value of the assets being
sold, transferred, leased or disposed of and (iii) the fair market value
of all assets sold, transferred, leased or disposed of pursuant to this
paragraph (b) shall not exceed (x) $10,000,000 in any fiscal year or (y) $50,000,000
in the aggregate.


 


SECTION 6.06.
Restricted Payments; Restrictive
Agreements.  (a) Declare
or make, or agree to declare or make, directly or indirectly, any Restricted
Payment (including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided,
however, that (i) any Subsidiary may declare and pay dividends
or make other distributions ratably to its equity holders, (ii) so long as
no Event of Default or Default shall have occurred and be continuing or would
result therefrom, the Borrower may, or the Borrower may make distributions to
Holdings


 


62

















 


so that Holdings may,
repurchase its Equity Interests owned by employees of Holdings, the Borrower or
the Subsidiaries or make payments to employees of Holdings, the Borrower or the
Subsidiaries upon termination of employment in connection with the exercise of
stock options, stock appreciation rights or similar equity incentives or equity
based incentives pursuant to management incentive plans or in connection with
the death or disability of such employees in an aggregate amount not to exceed
$2,000,000 in any fiscal year, (iii) the Borrower may make Restricted
Payments to Holdings (x) in an amount not to exceed $500,000 in any fiscal
year, to the extent necessary to pay general corporate and overhead expenses
incurred by Holdings in the ordinary course of business and (y) if
Borrower is a member of a consolidated, combined or unitary group of which
Borrower is not the common parent, in an amount necessary to pay the Tax
liabilities of the common parent (the “Common Parent”)  of
the consolidated, combined or unitary group of which Borrower is not the common
parent directly attributable to (or arising as a result of) the operations of
the Borrower and the Subsidiaries; provided,
however, that (A) the amount of such dividends shall not exceed the
amount that the Borrower and the Subsidiaries would be required to pay in
respect of Federal, state and local taxes were the Borrower and the
Subsidiaries to pay such taxes as members of a consolidated, combined or
unitary group of which Borrower is the common parent and (B) all
Restricted Payments made to Holdings pursuant to this clause (iii) are
used by Holdings to make Restricted Payments as specified in clause (iv) within
20 days of the receipt thereof and (iv) if Borrower is a member of a
consolidated, combined or unitary group of which Borrower is not the common
parent, then Holdings may make Restricted Payments to the Common Parent (x) in
an amount not to exceed $500,000 in any fiscal year, to the extent necessary to
pay general corporate and overhead expenses incurred by the Common Parent in
the ordinary course of business and (y) in an amount necessary to pay the
Tax liabilities of the Common Parent directly attributable to (or arising as a
result of) the operations of the Borrower and the Subsidiaries; provided, however, that (A) the
amount of such dividends shall not exceed the amount that the Borrower and the
Subsidiaries would be required to pay in respect of Federal, state and local
taxes were the Borrower and the Subsidiaries to pay such taxes as members of a
consolidated, combined or unitary group of which Borrower is the common parent
and (B) all Restricted Payments made to the Common Parent pursuant to this
clause (iv) are used by the Common Parent for the purposes specified herein
within 20 days of the receipt thereof.


 


(b)   Enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of
Holdings, the Borrower or any Subsidiary to create, incur or permit to exist
any Lien upon any of its property or assets to secure the Obligations, or (ii) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower
or any other Subsidiary; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document or any First Lien Loan Document, (B) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (C) the foregoing shall not apply to restrictions and
conditions imposed on any Foreign Subsidiary by the terms of any


 


63

















 


Indebtedness of such
Foreign Subsidiary permitted to be incurred hereunder, (D) clause (i) of
the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (E) clause (i) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.


 


SECTION 6.07.
Transactions with Affiliates.  Except for transactions between or among
Loan Parties and transactions pursuant to the Advisory Services and Monitoring
Agreements as in effect as of the Closing Date, sell or transfer any property
or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that the
Borrower or any Subsidiary may engage in any of the foregoing transactions in
the ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties.


 


SECTION 6.08.
Business of Holdings,  Borrower and Subsidiaries.
(a) With respect to Holdings, engage in any business activities
or have any assets or liabilities other than its ownership of the Equity
Interests of the Borrower and liabilities incidental thereto, including its
liabilities as a Guarantor pursuant to the Guarantee and Collateral Agreement
and its Guarantees of obligations under the First Lien Loan Documents.


 


(b)   With
respect to the Borrower and its Subsidiaries, engage at any time in any
business or business activity other than the business currently conducted by it
and business activities reasonably incidental thereto.


 


SECTION 6.09.
Other Indebtedness and Agreements.  (a) Permit (i) any waiver,
supplement, modification, amendment, termination or release of any indenture,
instrument or agreement pursuant to which the First Lien Loan or any
subordinated Material Indebtedness of Holdings, the Borrower or any of the Subsidiaries
is outstanding if the effect of such waiver, supplement, modification,
amendment, termination or release would materially increase the obligations of
the obligor or confer additional material rights on the holder of such
Indebtedness in a manner adverse to Holdings, the Borrower, any of the
Subsidiaries or the Lenders; provided that
the First Lien Loan Documents may be amended in accordance with the
Intercreditor Agreement, or (ii) any waiver, supplement, modification or
amendment of its certificate of incorporation, by-laws, operating, management
or partnership agreement or other organizational documents to the extent any
such waiver, supplement modification or amendment would be adverse to the
Lenders in any material respect.


 


(b)  (i)  Make
any distribution, whether in cash, property, securities or a combination
thereof, other than regular scheduled payments of principal and interest as and
when due (to the extent not prohibited by applicable subordination provisions),
in respect of, or pay, or commit to pay, or directly or indirectly (including
pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid
purposes any Indebtedness (other than the Loans and the First Lien Loans), or (ii) pay
in cash any amount in respect of any


 


64

















 


Indebtedness or preferred
Equity Interests that may at the obligor’s option be paid in kind or in other
securities (other than the payment of PIK Interest on the Loans in accordance
with Section 2.06).


 


SECTION 6.10.
Capital Expenditures.  (a) Permit the aggregate amount of
Capital Expenditures made by the Borrower and the Subsidiaries in any period
set forth below to exceed the amount set forth below for such period:


 


	
  Period

  	
   

  	
  Amount

  	
   

  
	
  Closing Date -
  December 31, 2007

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  January 1, 2008 -
  December 31, 2008

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  January 1, 2009 -
  December 31, 2009

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
  January 1, 2010 -
  December 31, 2010

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  January 1, 2011 -
  December 31, 2011

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  January 1, 2012 -
  December 31, 2012

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  January 1, 2013 -
  December 31, 2013

  	
   

  	
  $

  	
  17,000,000

  	
   

  
	
  January 1, 2014 -
  Maturity Date

  	
   

  	
  $

  	
  18,000,000

  	
   

  



 


If, in any fiscal
year, the Consolidated EBITDA exceeds the Baseline EBITDA for such fiscal year,
the amount of permitted Capital Expenditures set forth above in respect of such
fiscal year shall be increased (but not decreased) by 40% of the excess of (i) the
Consolidated EBITDA for such fiscal year over (ii) the Baseline EBITDA for
such fiscal year.


 


Any unused amount
of Capital Expenditures permitted to be made during each fiscal year may be
carried forward to, and made, at any time during the next succeeding two fiscal
years; provided that,  for
purposes of this sentence, Capital Expenditures made in any fiscal year shall
be deemed to use the amount permitted to be made during such fiscal year set
forth above before using the amount carried forward to such fiscal year.


 


(b)   Notwithstanding
subsection (a) above, the Borrower and its Subsidiaries may make Capital
Expenditures with the Net Cash Proceeds of (A) Specified Equity Issuances
by Holdings, the Borrower or any of their respective subsidiaries permitted
hereunder or (B) any Asset Sale, or any sale of used, worn out or surplus
equipment, in each case to the extent such Net Cash Proceeds are not required
to be applied to prepay loans, or cash collateralize, letters of credit, under
the First Lien Credit Agreement or to prepay Loans hereunder.


 


SECTION 6.11. Maximum Total Leverage Ratio.  Permit the Total Leverage Ratio at any
time during a period set forth below to be greater than the ratio set forth
opposite such period below:


 


65

















 


	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  September 30,
  2007

  	
   

  	
  8.00 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  8.00 to 1.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  8.00 to 1.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  8.00 to 1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  7.75 to 1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  7.25 to 1.00

  	
   

  
	
  March 31,
  2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  March 31, 2010

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  June 30,
  2011

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  December 31,
  2011

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  March 31,
  2012

  	
   

  	
  5.25 to 1.00

  	
   

  



 


SECTION 6.12.
Fiscal Year.  With
respect to Holdings and the Borrower, change their fiscal year-end to a date
other than December 31.


 


SECTION 6.13.
Certain Equity Securities.  Issue any Equity Interest that
is not Qualified Capital Stock.


 


ARTICLE VII


 


Events of
Default


 


In case of the
happening of any of the following events (“Events of Default”):


 


(a)  any representation or warranty made or deemed made in or
in connection with any Loan Document or the borrowings hereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;


 


66














 


(b)  default shall be made in the payment of
any principal of any Loan when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;


 


(c)  default shall be made in the payment of
any interest on any Loan or any fee or any other amount (other than an amount
referred to in (b) above) due under any Loan Document, when and as the
same shall become due and payable, and such default shall continue unremedied for
a period of three Business Days;


 


(d)  default shall be made in the due observance or
performance by Holdings, the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a), 5.05(a), 5.05(d) or
5.08 or in Article VI;


 


(e)  default shall be made in the
due observance or performance by Holdings, the Borrower or any
Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in (b), (c) or (d) above) and
such default shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent or the Required Lenders to the Borrower;


 


(f) (i) Holdings, the Borrower or any Subsidiary shall fail
to pay any principal, interest or other amount due in respect of any Material
Indebtedness, when and as the same shall become due and payable after giving
effect to any grace periods applicable thereto or (ii) any other event or
condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity
or that results in the termination or permits any counterparty to terminate any
Hedging Agreement the obligations under which constitute Material Indebtedness;
provided that this clause (ii) shall
not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness or to
mandatory prepayments of First Lien Loans required pursuant to Section 2.13
of the First Lien Credit Agreement; provided
further that an Event of Default under and as defined in the First
Lien Credit Agreement (other than the Events of Default described in paragraphs
(b) or (c) of Article VII of the First Lien Credit Agreement to
which this proviso shall not apply) (a “First Lien Event of Default”)  shall not in and of itself
constitute an Event of Default under this paragraph until the earlier to occur
of (x) a period of 60 days has elapsed following notice of such First Lien
Event of Default from the administrative agent or any lender under the First
Lien Credit Agreement to the Borrower, or from the Borrower to such
administrative agent or any such lender, and (y) the acceleration of the
maturity of any of the loans or the termination of any of the commitments under
the First Lien Credit Agreement in connection with such First Lien Event of
Default or the exercise of any remedies


 


67

















 


by the lenders or
the administrative agent under the First Lien Credit Agreement in connection
with such First Lien Event of Default;


 


(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of Holdings, the Borrower or any Material Subsidiary (or any group
of Subsidiaries that, when taken together, would constitute a Material
Subsidiary), or of a substantial part of the property or assets of Holdings,
the Borrower or a Material Subsidiary (or any group of Subsidiaries that, when
taken together, would constitute a Material Subsidiary), under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings, the Borrower or any Material Subsidiary (or any
group of Subsidiaries that, when taken together, would constitute a Material
Subsidiary) or for a substantial part of the property or assets of Holdings,
the Borrower or a Material Subsidiary (or any group of Subsidiaries that, when
taken together, would constitute a Material Subsidiary) or (iii) the
winding-up or liquidation of Holdings, the Borrower or any Material Subsidiary
(or any group of Subsidiaries that, when taken together, would constitute a
Material Subsidiary); and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;


 


(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, the Borrower or any
Subsidiary or for a substantial part of the property or assets of Holdings, the
Borrower or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of
the foregoing;


 


(i) one or more judgments shall be rendered against Holdings, the
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Holdings, the Borrower or any
Subsidiary to enforce any such judgment and such judgment either (i) is
for the payment of money in an aggregate amount in excess of $6,000,000 or (ii) is
for injunctive relief and could reasonably be expected to result in a Material
Adverse Effect;


 


68

















 


(j) an ERISA Event shall have occurred that, when taken together
with all other such ERISA Events, could reasonably be expected to result in
actual liability to Holdings, the Borrower or any Subsidiary (or any combination
thereof), including directly or indirectly through their ERISA Affiliates, in
an aggregate amount exceeding $6,000,000;


 


(k) any Guarantee under the Guarantee and Collateral Agreement for
any reason shall cease to be in full force and effect (other than in accordance
with its terms), or any Guarantor shall deny in writing that it has any further
liability under the Guarantee and Collateral Agreement (other than as a result
of the discharge of such Guarantor in accordance with the terms of the Loan
Documents);


 


(l) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any other
Loan Party not to be, a valid, perfected, first priority (subject to the
Intercreditor Agreement) (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the securities,
assets or properties covered thereby, except to the extent that any such loss
of perfection or priority results from the failure of the First Lien Collateral
Agent (as defined in the Intercreditor Agreement) to maintain possession of
certificates representing securities pledged under the Guarantee and Collateral
Agreement and except to the extent that such loss is covered by a lender’s
title insurance policy and the related insurer promptly after such loss shall
have acknowledged in writing that such loss is covered by such title insurance
policy;


 


(m) the Intercreditor Agreement shall, in whole or in part, cease
to be effective or cease to be legally valid, binding and enforceable against
any party thereto (or against any person on whose behalf any such party makes
any covenants or agreements therein), or otherwise not be effective to create
the rights and obligations purported to be created thereunder unless the same
results directly from the action or inaction of the Collateral Agent; or


 


(n) there shall have occurred a Change in Control;


 


then, and in every
such event (other than an event with respect to Holdings or the Borrower
described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to
be forthwith due and payable in whole or in part, whereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding;
and in any event


 


69

















 


with respect to Holdings
or the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.


 


Notwithstanding
anything to the contrary contained in the foregoing provisions of this Article VII,
in the event that the Borrower fails to comply with Section 6.11, until
the expiration of the 10th day subsequent to the date the certificate
calculating such compliance is required to be delivered pursuant to Section 5.04(c),
the Borrower shall have the right to issue common equity for cash or otherwise
receive cash contributions to the capital of the Borrower (collectively, the “Cure Right”),  and
upon receipt by the Borrower of such cash (the “Cure Amount”) pursuant to the exercise of
the Borrower of such Cure Right the applicable covenants shall be recalculated
giving effect to the following pro forma adjustments:


 


(i)  Consolidated EBITDA for the immediately preceding fiscal
quarter shall be increased, solely for the purpose of measuring compliance with
Section 6.11 for such fiscal quarter and each period thereafter in which
the Consolidated EBITDA for such fiscal quarter is contained, and not for any
other purpose under this Agreement, by an amount equal to the Cure Amount; and


 


(ii)  if, after giving effect to the foregoing
recalculations, the Borrower shall then be in compliance with Section 6.11
as of the relevant date of determination with the same effect as though there
had been no failure to comply therewith at such date, then the applicable
breach or default of the covenants set forth in Section 6.11 that had
occurred shall be deemed cured for all purposes of this Agreement as fully as
if such breach or default had never occurred.


 


Notwithstanding
anything herein to the contrary, (A) in each four quarter period there
shall be a period of at least two fiscal quarters in which the Cure Right is
not exercised, (B) in each eight quarter period there shall be a period of
at least four fiscal quarters in which the Cure Right is not exercised, (C) the
amount of any Cure Amount shall be no greater than the amount required to cause
the Borrower to be in compliance with Section 6.11 and (D) all Cure
Amounts shall be disregarded for all other purposes under this Agreement,
including any baskets in Article VI and the definitions of Applicable
Margin and Required Prepayment Percentage.


 


ARTICLE VIII


 


The Administrative Agent and the Collateral Agent


 


Each of the
Lenders hereby irrevocably appoints the Administrative Agent and the Collateral
Agent (for purposes of this Article VIII, the Administrative Agent and the


 


70

















 


Collateral Agent are
referred to collectively as the “Agents”) its
agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents. The Lenders acknowledge and agree
that the Administrative Agent shall also act, subject to and in accordance with
the terms of the Intercreditor Agreement as the administrative agent and
collateral agent for the lenders under the First Lien Credit Agreement.


 


The bank serving
as the Administrative Agent and/or the Collateral Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with Holdings, the Borrower or any Subsidiary or other
Affiliate thereof as if it were not an Agent hereunder.


 


Neither Agent
shall have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) neither
Agent shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) neither Agent shall
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby
that such Agent is instructed in writing to exercise by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.08), and (c) except as
expressly set forth in the Loan Documents, neither Agent shall have any duty to
disclose, nor shall it be liable for the failure to disclose, any information
relating to Holdings, the Borrower or any of the Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent and/or
Collateral Agent or any of its Affiliates in any capacity. Neither Agent shall
be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 9.08)
or in the absence of its own gross negligence or willful misconduct. Neither
Agent shall be deemed to have knowledge of any Default unless and until written
notice thereof is given to such Agent by Holdings, the Borrower or a Lender,
and neither Agent shall be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to such
Agent.


 


71

















 


Each Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing believed by it to be genuine and to have been signed or sent by
the proper person. Each Agent may also rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
person, and shall not incur any liability for relying thereon. Each Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.


 


Each Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it. Each Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the Credit Facility
as well as activities as Agent.


 


Subject to the
appointment and acceptance of a successor Agent as provided below, either Agent
may resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (not to be unreasonably withheld or delayed), unless a default of
payment or bankruptcy is continuing, in which case no such consent shall be
required, to appoint a successor, which shall be a bank with an office in the
United States or an Affiliate of such bank with an office in the United States.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation (including, for greater certainty, due to the failure
of the Borrower to consent to such appointment), then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a bank with
an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent’s
resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while acting as Agent.


 


Each Lender
acknowledges that it has, independently and without reliance upon the Agents or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other


 


72

















 


Loan Document any related
agreement or any document furnished hereunder or thereunder.


 


ARTICLE IX


 


Miscellaneous


 


SECTION 9.01.
Notices.  Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or nationally
recognized overnight courier service, mailed by certified or registered mail or
sent by fax, as follows:


 


(a)   if to the Borrower or Holdings, to it at 10 Water
Street, Enfield, CT 06082-4899, Attention of Chief Financial Officer (Fax No. (860)
749-9158); with a copy to STR Holdings LLC, c/o DLJ Merchant Banking, Attention
of Dan Gerwitz (Fax No. (860) 749-9158);


 


(b)   if to the Administrative Agent, to Credit Suisse,
Eleven Madison Avenue, New York, NY 10010, Attention of Matthew Carter RDU-2
(Fax No. (212) 743-1842); and


 


(c)   if to a Lender, to it at its address (or fax
number) set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto.


 


All notices and
other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of
receipt if delivered by hand or nationally recognized overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 9.01. As agreed to among Holdings, the Borrower, the
Administrative Agent and the applicable Lenders from time to time, notices and
other communications may also be delivered by e-mail to the e-mail address of a
representative of the applicable person provided from time to time by such
person so long as a copy of such notice or other communication is also sent by
one of the other methods set forth above; provided,
however, that notices given by the Borrower to the Administrative
Agent pursuant to Article II may not be delivered by email unless
otherwise agreed to by the Administrative Agent on a case by case basis.


 


SECTION 9.02. Survival
of Agreement. All
covenants, agreements, representations and warranties made by the Borrower or
Holdings herein and in the certificates or other instruments prepared or
delivered in connection with, or pursuant to, this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of the Loans, regardless of any investigation
made by the Lenders or on their behalf, and shall continue in full force and
effect as long as the principal of, or any accrued interest on, any Loan or any
fee or any other amount payable under this Agreement or any other Loan Document
is


 


73

















 


outstanding and unpaid
and so long as the Commitments have not been terminated. The provisions of
Sections 2.13, 2.15, 2.19 and 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent or any Lender.


 


SECTION 9.03.
Binding Effect.  This Agreement shall become effective
when it shall have been executed by the Borrower, Holdings and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto.


 


SECTION 9.04.
Successors and Assigns.  (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, Holdings, the Administrative
Agent, the Collateral Agent or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.


 


(b)   Each
Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it), with notice
to the Borrower delivered from time to time and the prior written consent of
the Administrative Agent (not to be unreasonably withheld or delayed); provided, however, that (i) the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall be
in an integral multiple of, and not less than, $1,000,000 (or, if less, the
entire remaining amount of such Lender’s Commitment or Loans of the relevant
Class), (ii) the parties to each such assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance via an electronic
settlement system acceptable to the Administrative Agent (or, if previously
agreed with the Administrative Agent, manually), and shall pay to the
Administrative Agent a processing and recordation fee of $3,500 (which fee may
be waived or reduced in the sole discretion of the Administrative Agent), and (iii) the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire and all applicable tax forms. Upon
acceptance and recording pursuant to paragraph (e) of this Section 9.04,
from and after the effective date specified in each Assignment and Acceptance, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement and (B) the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any fees accrued
for its account and not yet paid).


 


74

















 


(c)   By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each other and the other parties hereto
as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is an Eligible Assignee and is legally
authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 the Intercreditor Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee agrees to be bound by the terms of the
Intercreditor Agreement; (vii) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and (viii) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.


 


(d)   The Administrative Agent, acting for this purpose
as an agent of the Borrower, shall maintain at one of its offices in The City
of New York a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive and the Borrower the
Administrative Agent, the Collateral Agent and the Lenders may treat each
person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrower,
the Collateral Agent and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.


 


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(e)   Upon its receipt of, and consent to, a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, an Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already he a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) above, if applicable, and the
written consent of the Administrative Agent and, if required, the Borrower to
such assignment and any applicable tax forms, the Administrative Agent shall
promptly (i) accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register. No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).


 


(f)   Each Lender may without the consent of the
Borrower or the Administrative Agent sell participations to one or more banks
or other persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
persons shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.13, 2.15 and 2.19 to the same extent as if they were
Lenders (but, with respect to any particular participant, to no greater extent
than the Lender that sold the participation to such participant), (iv) the
Borrower, the Administrative Agent and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement, and such Lender shall retain the sole
right to enforce the obligations of the Borrower relating to the Loans and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable to such participating bank or person hereunder or the amount of
principal of or the rate at which interest is payable on the Loans in which
such participating bank or person has an interest, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans
in which such participating bank or person has an interest, increasing or extending
the Commitments in which such participating bank or person has an interest or
releasing all or substantially all of the value of the Guarantees (other than
in connection with the sale of such Guarantor in a transaction permitted by Section 6.05)
or all or substantially all of the Collateral) and (v) such Lender, acting
solely for this purpose as an agent of the Borrower, shall maintain a register
for the recordation of the names and addresses of the participating bank or
other person and the Commitments of and principal amounts of and interest on
the Loans owing and paid to, such participating banks pursuant to the terms
hereof from time to time and the amounts received by such Lender from the
Borrower and whether such amounts constitute principal interest fees or other
amounts and each participating bank’s share thereof.


 


(g)   Any Lender or participant may, in connection with
any assignment or participation or proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to


 


76

















 


customary exceptions) to
preserve the confidentiality of such confidential information on terms no less
restrictive than those applicable to the Lenders pursuant to Section 9.16.


 


(h)   Any
Lender may at any time assign all or any portion of its rights under this
Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender; provided that
no such assignment shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.


 


(i)   Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)  may
grant to a special purpose funding vehicle (an “SPC”), identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part
of any Loan that such Granting Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan and (ii) if an SPC elects not to exercise such option
or otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender). In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 9.04, any SPC may (i) with notice
to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC.


 


(j)   Neither
Holdings nor the Borrower shall assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent and
each Lender, and any attempted assignment without such consent shall be null
and void.


 


SECTION 9.05.
Expenses; Indemnity.  (a) The Borrower agrees to pay all
reasonable and documented out-of-pocket expenses incurred by the Administrative
Agent and the Collateral Agent in connection with the syndication of the Credit
Facility and the preparation and administration of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or waivers
of the provisions hereof or


 


77

















 


thereof (whether or not
the transactions hereby or thereby contemplated shall be consummated) or
incurred by the Administrative Agent, the Collateral Agent or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents or in connection with the Loans
made hereunder, including the reasonable and documented fees, charges and
disbursements of Cravath, Swaine & Moore LLP, counsel for the
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.


 


(b)   The Borrower agrees to indemnify the
Administrative Agent, the Collateral Agent, each Lender and each Related Party
of any of the foregoing persons, their successors and assigns and members of
each of the foregoing (each such person being called an “Indemnitee”)  against, and to hold each Indemnitee
harmless from, any and all reasonable and documented losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges
and disbursements, incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or
delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of
their respective obligations thereunder or the consummation of the Transactions
and the other transactions contemplated thereby (including the syndication of
the Credit Facility), (ii) the use of the proceeds of the Loans, or (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (and regardless of
whether such matter is initiated by a third party or by the Borrower, any other
Loan Party or any of their respective Affiliates); provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or wilful misconduct of such Indemnitee or (y) result
from the release of Hazardous Materials or a violation of Environmental Laws
that first occurs at a particular owned real property after such property has
been transferred to any Indemnitees or its successor or assigns by foreclosure,
deed-in-lieu of foreclosure or similar transfer except to the extent caused by,
or attributable to the actions of or failure to act by, the Borrower or any of
its Subsidiaries.


 


(c)   To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent or the Collateral
Agent under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent or the Collateral Agent, as
the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Collateral Agent in its capacity as such. For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its
share of the sum of the outstanding Loans and unused Commitments at the time.


 


78














 


(d)  To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.


 


(e)  The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the expiration of the Commitments, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent or any Lender. All amounts due under
this Section 9.05 shall be payable on written demand therefor.


 


SECTION 9.06.
Right of Setoff.  If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower or Holdings against any of and
all the obligations of the Borrower or Holdings now or hereafter existing under
this Agreement and other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 9.06 are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.


 


SECTION 9.07.
Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.


 


SECTION 9.08.
Waivers; Amendment.  (a) No failure or delay of the
Administrative Agent, the Collateral Agent or any Lender in exercising any
power or right hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.   No notice or demand on the


 


79

















 


Borrower or Holdings in
any case shall entitle the Borrower or Holdings to any other or further notice
or demand in similar or other circumstances.


 


(b)  Neither
this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower,
Holdings and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the
principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any Loan, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest
on any Loan, without the prior written consent of each Lender directly
adversely affected thereby, (ii) increase or extend the Commitment or
decrease or extend the date for payment of any fees of any Lender without the
prior written consent of such Lender, (iii) amend or modify the pro rata
requirements of Section 2.16, the provisions of Section 9.04(j) or
the provisions of this Section or release all or substantially all of the
value of the Guarantees (other than in connection with the sale of such
Guarantor in a transaction permitted by Section 6.05) or all or
substantially all of the Collateral (except as provided in the Intercreditor
Agreement), without the prior written consent of each Lender, (iv) change
the provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders holding Loans of one Class differently
from the rights of Lenders holding Loans of any other Class without the
prior written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each adversely affected Class, (v) modify
the protections afforded to an SPC pursuant to the provisions of Section 9.04(i) without
the written consent of such SPC or (vi) reduce the percentage contained in
the definition of the term “Required Lenders” without the prior written consent
of each Lender (it being understood that with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the Commitments on the date hereof); provided
further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent or the Collateral Agent
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent or the Collateral Agent.


 


SECTION 9.09.
Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated
as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate
(the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan or
participation hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section 9.09
shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.


 


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SECTION 9.10.
Entire  Agreement.
This Agreement, the Fee Letter and the other Loan Documents
constitute the entire contract between the parties relative to the subject
matter hereof. Any other previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any person (other than the parties
hereto and thereto, their respective successors and assigns permitted hereunder
and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent, the Collateral Agent and the Lenders) any rights,
remedies, obligations or liabilities under or by reason of this Agreement or
the other Loan Documents.


 


SECTION 9.11. WAIVER
OF JURY TRIAL.  EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARIS1NG OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.


 


SECTION 9.12.
Severability.  In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


 


SECTION 9.13.
Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.


 


SECTION 9.14.
Headings.  Article and Section headings
and the Table of Contents used herein are for convenience of reference only,
are not part of this


 


81

















 


Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.


 


SECTION 9.15.
Jurisdiction; Consent to Service
of Process.  (a) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
any party hereto may otherwise have to bring any action or proceeding relating
to this Agreement or the other Loan Documents against any other party hereto or
their respective properties in the courts of any jurisdiction.


 


(b)  Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or the
other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.


 


(c)  Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.


 


SECTION 9.16.
Confidentiality.  Each of the Administrative Agent, the
Collateral Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ officers, directors, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) upon notice to the Borrower (to the extent practicable
and permitted under applicable laws or regulations), to the extent requested by
any regulatory authority or quasi-regulatory authority (such as the National
Association of Insurance Commissioners), (c) upon notice to the Borrower
(to the extent practicable and permitted under applicable laws or regulations),
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) in connection with the exercise of any remedies
hereunder or under the other Loan Documents or any suit, action or proceeding
relating to the enforcement of its rights hereunder or thereunder, (e) subject
to an agreement containing provisions substantially the same as those of this


 


82

















 


Section 9.16, to (i) any
actual or prospective assignee of or participant in any of its rights or
obligations under this Agreement and the other Loan Documents or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower or any Subsidiary or any of their
respective obligations, (f) with the consent of the Borrower or (g) to
the extent such Information becomes publicly available other than as a result
of a breach of this Section 9.16. For the purposes of this Section, “Information” shall
mean all information received from the Borrower or Holdings and related to the
Borrower or Holdings or their business, other than any such information that
was available to the Administrative Agent, the Collateral Agent or any Lender
on a nonconfidential basis prior to its disclosure by the Borrower or Holdings.
Any person required to maintain the confidentiality of Information as provided
in this Section 9.16 shall be considered to have complied with its
obligation to do so if such person has exercised the same degree of care to
maintain the confidentiality of such Information as such person would accord
its own confidential information.


 


SECTION 9.17.
USA PATRIOT Act Notice.  Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies Holdings and the
Borrower that pursuant to the requirements of the USA PATRIOT Act, it is
required to obtain, verify and record information that identifies Holdings and
the Borrower, which information includes the name and address of Holdings and
the Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify Holdings and the Borrower in
accordance with the USA PATRIOT Act.


 


SECTION 9.18. Intercreditor Agreement. Reference
is made to the Intercreditor Agreement. Each Lender hereunder (a) acknowledges
that it has received a copy of the Intercreditor Agreement, (b) consents
to the subordination of Liens provided for in the Intercreditor Agreement, (c) agrees
that it will be bound by and will take no actions contrary to the provisions of
the Intercreditor Agreement and (d) authorizes and instructs the
Collateral Agent to enter into the Intercreditor Agreement as Collateral Agent
and on behalf of such Lender. The foregoing provisions are intended as an
inducement to the lenders under the First Lien Credit Agreement to permit the
incurrence of Indebtedness under this Agreement and to extend credit to the
Borrower and such lenders are intended third party beneficiaries of such
provisions.


 


83

















 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.


 


	
   

  	
  STR ACQUISITION, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jason Metakis

  
	
   

  	
   

  	
  Name: Jason Metakis

  
	
   

  	
   

  	
  Title:
  Treasurer

  
	
   

  	
   

  
	
   

  	
  STR HOLDINGS LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jason Metakis

  
	
   

  	
   

  	
  Name: Jason Metakis

  
	
   

  	
   

  	
  Title: Treasurer

  
				



 

















 


	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS

  BRANCH, individually and as

  Administrative Agent and Collateral Agent,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Shanka Mohan

  
	
   

  	
   

  	
  Name: Shanka Mohan

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ James Neira

  
	
   

  	
   

  	
  Name: James Neira

  
	
   

  	
   

  	
  Title: Associate

  
				



 














 


SCHEDULE 1.01(a)




Subsidiary Guarantors


 


Cal
Safety Compliance Corporation


Specialized
Technology Resources (International), Inc.


Shuster
Laboratories, Inc.


Supply
Chain Consulting Services Corporation 


Specialized
Technology Resources (Florida), Inc 


STR
Materials Science, Inc.


 


2

















 


SCHEDULE 1.01(b)


 


Mortgaged Property


 


Property
located at 10 Water Street, Enfield, CT 06082, described as follows:


 


That
certain piece or parcel of land on the south side of Hazard Avenue (Route 190)
in the Town of Enfield, County of Hartford and State of Connecticut, shown as “Parcel
A” on Sheet 1 of 2 on a map or plan entitled: “Prepared for Springborn
Laboratories, Inc. Hazard Avenue & Abbe Road, Enfield, Conn. . .
Scale: 1 in. = 100 ft. Date: June 30, 1987. . . Rev. 2-24-88. . . Alford
Associates, Inc. Civil Engineers, Windsor, Connecticut,” which map or plan
is on file with the Enfield Town Clerk in Volume 220, Page 3033, and more
particularly bounded and described as follows:


 


Beginning
at a point on the south side of Hazard Avenue, which point is the northwest
corner of the herein described premises and the northeast corner of land now or
formerly of Raymond F. and Suzanne Aquilio, as shown on said map; running
thence along the arc of a curve to the right having a radius of 933.00 feet and
a delta angle of 9° 34' 03" a distance of 155.79 feet to a CHD marker;
running thence N 83° 19' 04" E a distance of 414.00 feet to a CHD
monument; running thence N 82° 58' 24" E a distance of 143.64 feet to a
point, the last three courses running along the south side of Hazard Avenue;
running thence S 09° 53' 12" E a distance of 435.66 feet along land now or
formerly of National Railroad Passenger Corporation as shown on said map;
running thence S 89° 20' 43" W a distance of 143.38 feet to a point; S 64°
08' 57" W a distance of 9.72 feet to a point; S 00° 09' 17" W a
distance of 14.24 feet to a point; S 89° 08' 16" W a distance of 51.12
feet to a point; S 86° 57' 00" W a distance of 105.15 feet to a point; N
89° 55' 46" W a distance of 384.08 feet to a point; S 79° 44' 15" W a
distance of 139.61 feet to a set iron pin; N 69° 59' 38" W a distance of
129.11 feet to a set iron pin, the last eight (8) courses being along the
Scantic River as shown on said map; running thence N 24° 34' 57" E a
distance of 401.37 feet along land now or formerly of Thomas E. and Diane S.
Eastwood, James C. and Nancy A. Miczak and Raymond F. and Suzanne Aquilia, in
part by each, to the point or place of beginning.


 


TOGETHER
WITH an easement from the State of Connecticut to Springborn Testing &
Research, Inc. dated December 31, 1997 and recorded in Volume 1156, Page 123
of the Enfield Land Records.


 


3

















 


Schedule 2.01 

Lenders and Commitments


 


	
  Second Lien Term Loan Facility
  Lender

  	
   

  	
  Second Lien Term Loan

  Commitment on Closing Date

  	
   

  
	
  Credit Suisse

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
  TOTAL COMMITMENT

  	
   

  	
  $

  	
  75,000,000

  	
   

  



 

















 


SCHEDULE 3.08




Subsidiaries


 


STR
Acquisition, Inc. — 100% owned by STR Holdings LLC


 


Specialized
Technology Resources, Inc. (“STR”) (to be the survivor of merger with STR
Acquisition, Inc.; thereafter to be 100% owned by STR Holdings LLC.


 


	
  (a)

  	
  (Unless
  otherwise noted, STR owns 100% of the equity securities of each subsidiary)

  
	
   

  	
   

  
	
  1.

  	
  Specialized
  Technology Resources (Singapore) Pte Ltd (100% of voting stock owned by STR;
  small portion of non-voting stock owned by STR-HK)

  
	
   

  	
   

  
	
  2.

  	
  Specialised
  Technology Resources (UK) Limited (“STR-UK”)

  
	
   

  	
   

  
	
  3.

  	
  Cal
  Safety Compliance Corporation (“CSCC”)

  
	
   

  	
   

  
	
  4.

  	
  Cal
  Safety Compliance Corporation de CV (Gregory Gardner owns one share of the 50
  outstanding shares; remaining shares owned by CSCC)

  
	
   

  	
   

  
	
  5.

  	
  Specialized
  Technology Resources Laboratuar Hizmetleri Anonim Sirketi (99% owned by
  Company, .25% owned by each of STR-UK, STR-HK, STRAG and CSCC).

  
	
   

  	
   

  
	
  6.

  	
  STR
  Laboratuar Hizmetleri ve Gozetim Ltd. (dormant)

  
	
   

  	
   

  
	
  7.

  	
  STR-Registrar
  LLC (51% owned by STR; 49% owned by Science, Technology and Registration
  Holdings, Inc. (formerly Quality Paradigms))

  
	
   

  	
   

  
	
  8.

  	
  Specialized
  Technology Resources (International), Inc. (“STR-I”)

  
	
   

  	
   

  
	
  9.

  	
  Specialized
  Technology Resources (Taiwan) Ltd. (owned by STR-I)

  
	
   

  	
   

  
	
  10.

  	
  Specialized
  Technology Resources (Hong Kong) Ltd. (“STR-HK”) (Dennis Jilot owns one share
  of the 120,002 outstanding shares and remaining shares owned by STR-I)

  
	
   

  	
   

  
	
  11.

  	
  Specialized
  Technology Resources (Shanghai) Ltd. (owned by STR-HK)

  
	
   

  	
   

  
	
  12.

  	
  STR
  Testing & Inspection AG (“STR AG”) (owned by STR-I)

  
	
   

  	
   

  
	
  13.

  	
  Specialized
  Technology Resources España S.A.

  
	
   

  	
   

  
	
  14.

  	
  Shuster
  Laboratories, Inc.

  
	
   

  	
   

  
	
  15.

  	
  Supply
  Chain Consulting Services Corporation (dormant)

  
	
   

  	
   

  
	
  16.

  	
  Specialized
  Technology Resources (India) Pvt Ltd. (Samir Rastogi owns 1 share of the
  5,000 outstanding shares; remaining shares owned by STR)

  
	
   

  	
   

  
	
  17.

  	
  Specialized
  Technology Resources (Florida), Inc.

  
	
   

  	
   

  
	
  18.

  	
  Specialised
  Technology Resources Lanka (Private) Limited (50% owned by STR; 50% owned by
  STR-I)

  
	
   

  	
   

  
	
  19.

  	
  STR
  Materials Science, Inc. (dormant)

  
	
   

  	
   

  
	
  20.

  	
  Tex
  Analysis Laboratory Private Limited (owned by STR-HK)

  
	
   

  	
   

  
	
  21.

  	
  STR
  Vietnam Co. Ltd. (owned by STR-HK)

  



 


5

















 


	
  (b)

  	
  Joint
  Ventures

  



 


STR
France S.A.S. (STR-UK owns a 50% interest) 


 


CTC
Asia Ltd. (STR owns 50%)


 


6

















 


SCHEDULE 3.09


 


Litigation


 


1.             Specialized Technology Resources, Inc.
(“STR”) is aware of certain inquiries in India with respect to the former
operations of Cal Safety Compliance Corporation (“CSCC”) in India by the
Enforcement Directorate concerning the manner in which it was conducting
business in India and its authority to do so. These inquiries are ongoing and
during the course of them a current employee of STR in India was questioned but
no further steps have been taken.


 


2.             The local manager of CSCC in India
has received a complaint dated August 19, 2005, filed in the Court of the
Judicial Magistrate at Gurgaon, alleging certain improprieties on a website
maintained by CSCC with respect to the display of the map of India and the
Indian national flag. This matter is ongoing.


 


3.             On April 17, 2006, a
proceeding was initiated against Specialized Technology Resources Espana S.A.
by the family of a worker injured at its plant in Spain. The proceeding is
criminal in nature at this time, but as is custom in Spain, it is expected that
civil claims will arise relating to this claim. Specialized Technology
Resources España S.A. has local counsel and has referred the matter to its
insurer.


 


7

















 


SCHEDULE 3.17


 


Environmental Matters


 


None.


 


8

















 


Schedule 3.18


 


Insurance


 


	
  Type
  of Insurance

  	
   

  	
  Policy Number

  	
   

  	
  Carrier

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Domestic
  Commercial General Liability

  	
   

  	
  10CESOA9276

  	
   

  	
  The
  Hartford (Twin City Fire)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial
  Umbrella Liability

  	
   

  	
  AUC591925100

  	
   

  	
  American
  Guarantee & Liability (Zurich)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D &
  O/EPL

  	
   

  	
  626-00-58

  	
   

  	
  AIG
  — Illinois National Ins. Co.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forefront
  Portfolio  Crime & Fiduciary Liability

  	
   

  	
  8185-3181

  	
   

  	
  Federal
  Insurance Company (Chubb)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forefront
  Portfolio Kidnap/Ransom & Extortion

  	
   

  	
  6804-1625

  	
   

  	
  Federal
  Insurance Company (Chubb)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Errors &
  Omissions (Professional Liability)

  	
   

  	
  1155784

  	
   

  	
  Lexington
  Insurance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Foreign
  General Liability

  	
   

  	
  GBO2901067

  	
   

  	
  St.
  Paul Travelers

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global
  Marine/War Cargo

  	
   

  	
  M-20159,
  WC-20159

  	
   

  	
  Falvey
  Cargo

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flood
  Policies

  	
   

  	
  2043437800

  1011190076

  2044479400

  2044479500

  	
   

  	
  American
  Bankers Ins. Co. of Florida

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  War
  Risk Coverage

  	
   

  	
  8034573

  	
   

  	
  AIG
  Life Ins. Co.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjustable
  Premium Term Life Insurance Policy  (John F.
  Gual)

  	
   

  	
  11305750

  	
   

  	
  Massachusetts
  Mutual Life Insurance Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjustable
  Premium Term Life Insurance Policy  (Dennis
  Jilot)

  	
   

  	
  1116S207

  	
   

  	
  Massachusetts
  Mutual Life Insurance Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Worldwide
  Property

  	
   

  	
  GPAD3601751-A

  	
   

  	
  ACE
  American Insurance Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Workers
  Compensation

  	
   

  	
  WCJZ91445093027

  	
   

  	
  WAUSAU,
  Member of Liberty Mutual Group

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial
  Automobile

  	
   

  	
  ASJZ91445093017

  	
   

  	
  WAUSAU,
  Member of Liberty Mutual Group

  



 


9

















 


Schedule 3.19(a)




UCC Filing Offices


 


	
  Grantor

  	
   

  	
  Filing Office(s)

  
	
   

  	
   

  	
   

  
	
  STR
  Holdings LLC

  	
   

  	
  Delaware Secretary of State

  
	
   

  	
   

  	
   

  
	
  STR
  Acquisition, Inc.

  	
   

  	
  Delaware Secretary of State

  
	
   

  	
   

  	
   

  
	
  Specialized
  Technology Resources, Inc.

  	
   

  	
  Delaware Secretary of State

   

  Enfield, Connecticut Town Clerk

   

  Somers, Connecticut Town Clerk

  
	
   

  	
   

  	
   

  
	
  Cal
  Safety Compliance Corporation

  	
   

  	
  California Secretary of State

   

  Los Angeles County Registrar-Recorder/County Clerk  

   

  Hudson County, NJ

  
	
   

  	
   

  	
   

  
	
  Specialized
  Technology Resources (International), Inc.

  	
   

  	
  Delaware Secretary of State

  
	
   

  	
   

  	
   

  
	
  Shuster
  Laboratories, Inc.

  	
   

  	
  Delaware Secretary of State

   

  Norfolk County (MA) Registry of Deeds

  
	
   

  	
   

  	
   

  
	
  Supply
  Chain Consulting Services Corporation

  	
   

  	
  Delaware Secretary of State

   

  Los Angeles County Registrar-Recorder/County Clerk

  
	
   

  	
   

  	
   

  
	
  Specialized
  Technology Resources (Florida), Inc.

  	
   

  	
  FloridaUCC, Inc.

   

  St. Johns County Circuit Court

  
	
   

  	
   

  	
   

  
	
  STR
  Materials Science, Inc.

  	
   

  	
  Delaware Secretary of State

  



 














 


Schedule 3.19(c)


 


Mortgage Filing Offices


 


Mortgage
on the property owned by Specialized Technology Resources, Inc. located at
10 Water Street, Enfield, Connecticut to be filed in the Land Records of the
Town of Enfield, Connecticut maintained by the Town Clerk of Enfield,
Connecticut.


 

















 


Schedule 3.20(a)


 


Owned Real Property


 


	
  Address

  	
   

  	
  Owned

  	
   

  	
  Entity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10
  Water Street 

  Enfield, CT 06082

  	
   

  	
  Owned

  	
   

  	
  Specialized
  Technology Resources, Inc.

  



 

















 


Schedule 3.20(b)


 


Leased Real Property


 


	
  Address

  	
   

  	
  Leased

  	
   

  	
  Entity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24
  Scitico Road 

  Somers, CT

  	
   

  	
  Leased

  	
   

  	
  Specialized
  Technology Resources, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  66
  Hudson Street, 1st 

  Floor, Hoboken, NJ

  	
   

  	
  Leased

  	
   

  	
  Cal
  Safety Compliance Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122
  West Washington Boulevard, Los Angeles, CA

  	
   

  	
  Leased

  	
   

  	
  Cal
  Safety Compliance Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Units
  425-427, 4th Floor,

  Hankow Center, 5-155

  Hankow Road, Tsim Sha

  Tsui, Kowloon, HK

  	
   

  	
  Leased

  	
   

  	
  Cal
  Safety Compliance Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  House
  #162, 3rd Floor,

  Road #1 (East), D.O.S.H.,

  Baridhara, Gulshan,

  Bangladesh 12121

  	
   

  	
  Leased

  	
   

  	
  Cal
  Safety Compliance Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JL
  Barito II No. 33

  Kebayoran Baru, Jakarta,

  Indonesia 12130

  	
   

  	
  Leased

  	
   

  	
  Cal
  Safety Compliance Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  85
  John Road, Canton,

  MA 02021

  	
   

  	
  Leased

  	
   

  	
  Shuster
  Laboratories, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30
  Iroquois Street, Saint

  Augustine, FL 32085

  	
   

  	
  Leased

  	
   

  	
  Specialized
  Technology Resources (Florida), Inc.

  



 

















 


Schedule 6.01


 


Existing Indebtedness


 


	
  1.

  	
  Letter
  of Support dated February 2, 2006 to Lee Seng Chan & Co. (the
  auditors of Specialized Technology Resources (Singapore) Pte. Ltd.).

  
	
   

  	
   

  
	
  2.

  	
  Master
  Equipment Lease with Key Equipment Finance, dated September 16, 2005.

  
	
   

  	
   

  
	
  3.

  	
  Reimbursement
  Agreement dated January 14, 2007 between Specialized Technology
  Resources, Inc. and Webster Bank relating to Letter of Credit number
  10304 dated January 9, 2007 for $821,684 in favor of Macro
  Engineering & Technology, Inc.

  
	
   

  	
   

  
	
  4.

  	
  Assignment
  of Certificate of Deposit dated June 14, 2007 made by Specialized
  Technology Resources, Inc. in favor of Webster Bank relating to the
  Assignment of an $862,768 Certificate of Deposit as collateral for
  Specialized Technology Resources, Inc.’s obligations under the
  Reimbursement Agreement set forth in item 3 above.

  



 

















 


Schedule 6.02


 


Existing Liens


 


UCC Liens


 


	
  Grantor

  	
   

  	
  Secured Party

  	
   

  	
  Jurisdiction

  	
   

  	
  Date and File

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STR
  Holdings LLC

  	
   

  	
  None

  	
   

  	
  Delaware Secretary of State

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STR
  Acquisition, Inc.

  	
   

  	
  None

  	
   

  	
  Delaware Secretary of State

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Specialized  Technology
  Resources, Inc.

  	
   

  	
  ISO
  Capital, LLC

  	
   

  	
  Delaware Secretary of State

  	
   

  	
  12/11/02

  2309129 9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Key
  Equipment Finance, Inc.

  	
   

  	
  Delaware Secretary of State

  	
   

  	
  9/21/05

  5292107 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  Enfield, Connecticut Town Clerk

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  Somers, Connecticut Town Clerk

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cal
  Safety Compliance Corporation

  	
   

  	
  None

  	
   

  	
  Los Angeles County Registrar-  Recorder/County
  Clerk

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  Hudson County (NJ) Register

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Specialized  Technology
  Resources (International), Inc.

  	
   

  	
  None

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Shuster
  Laboratories, Inc.

  	
   

  	
  Key
  Equipment Finance, Inc.

  	
   

  	
  Delaware Secretary of State

  	
   

  	
  9/21/05

  5292107 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  Norfolk County (MA) Registry of Deeds

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STR
  Acquisition Sub, Inc. (now known as Shuster Laboratories, Inc.)

  	
   

  	
  None

  	
   

  	
  Delaware Secretary of State

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  Norfolk County (MA) Registry of Deeds

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Supply
  Chain  Consulting Services Corporation

  	
   

  	
  None

  	
   

  	
  Los Angeles County Registrar- Recorder/County Clerk

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Specialized  Technology
  Resources (Florida), Inc.

  	
   

  	
  None

  	
   

  	
  St. Johns County Circuit Court

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Conplex, Inc.,
  (now known as Specialized Technology Resources (Florida), Inc.)

  	
   

  	
  Toyota
  Motor Credit Corporation

  	
   

  	
  Florida Secured Transaction Registry

  	
   

  	
  7/1/04

  200407315878

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  None

  	
   

  	
  St. Johns County Circuit Court

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STR
  Materials Science, Inc.

  	
   

  	
  None

  	
   

  	
  Delaware Secretary of State

  	
   

  	
   

  



 


Permitted
Encumbrances


 


1.                                       Taxes to the
Town of Enfield not yet due and payable.


 


2.                                       Fire Taxes to
the City of Enfield; which payments are current and not yet due and payable.


 


3.                                       The following
matters as shown on the map filed in Map Volume 220, Page 3033 in the
Office of the Enfield Town Clerk:


 


a.                                       Sanitary sewer
easement and rights to construct and maintain drainage structures; and


 


b.                                      Notes shown
thereon.


 

















 


	
  4.

  	
  Pole
  line easement in favor of the Connecticut Light and Power Company dated
  August 6, 1956 and recorded in Volume 151, Page 241 of the Enfield
  Land Records.

  
	
   

  	
   

  
	
  5.

  	
  Pole
  line easement in favor of the Connecticut Light and Power Company dated
  July 21, 1938 and recorded in Volume 84, Page 240 of the Enfield
  Land Records.

  
	
   

  	
   

  
	
  6.

  	
  Easement
  in favor of Hazardville Water Company recorded in Volume 107, Page 2 of
  the Enfield Land Records.

  
	
   

  	
   

  
	
  7.

  	
  Easement
  in favor of the Town of Enfield described in deed from DeBell &
  Richardson, Inc. dated July 10, 1984 and recorded in Volume 386,
  Page 443 of the Enfield Land Records.

  
	
   

  	
   

  
	
  8.

  	
  Permanent
  Right of Way Easement in favor of the State of Connecticut dated
  July 29, 1996 and recorded in Volume 1156, Page 131 of the Enfield
  Land Records. See also maps filed in Map Volume 220, Page 3037 and Map
  Volume 239, Pages 3968 and 3969 in the Office of the Enfield Town Clerk.

  
	
   

  	
   

  
	
  9.

  	
  Rights
  of others in and to any water courses on, touching or flowing through the
  premises.

  
	
   

  	
   

  
	
  10.

  	
  Possible
  public easement of use and enjoyment of the beach or shore area above the low
  water mark of the Scantic River.

  
	
   

  	
   

  
	
  11.

  	
  Terms
  and conditions of Easement from the State of Connecticut to Springborn
  Testing & Research, Inc. dated December 31, 1997 and
  recorded in Volume 1156, Page 123 of the Enfield Land Records (affects
  appurtenant rights only).

  
	
   

  	
   

  
	
  12.

  	
  Matters
  on a survey entitled “Improvement Location Survey Prepared For Specialized
  Technology Resources 504 Hazard Avenue a.k.a 10 Water Street Enfield, Conn.”
  Prepared by Alford Associates, Inc. Scale 1 In.= 30 Ft. Date:
  Feb. 20, 1996 Rev. 8-13-01 Updated Survey, Change Title Block:

  



 


	
   

  	
  a.

  	
  25’
  side yard set back lines;

  
	
   

  	
  b.

  	
  concrete
  supports for oil tanks (oil tanks removed);

  
	
   

  	
  c.

  	
  encroaching
  drainage on the easterly property line;

  
	
   

  	
  d.

  	
  lean
  to shed encroaches 3.4” on the easterly property line;

  
	
   

  	
  e.

  	
  conc.
  retaining wall on the southerly property line;

  
	
   

  	
  f.

  	
  property
  line follows face of building on the southerly property line;

  
	
   

  	
  g.

  	
  dam
  on the southerly property line;

  
	
   

  	
  h.

  	
  Scantic
  River along southerly property line;

  
	
   

  	
  i.

  	
  Brook;

  
	
   

  	
  j.

  	
  Outlet
  pipes which encroach on the northerly property line;

  
	
   

  	
  k.

  	
  Existing
  culvert on the northerly property line;

  
	
   

  	
  1.

  	
  40’
  set back line;

  
	
   

  	
  m.

  	
  water
  lines;

  
	
   

  	
  n.

  	
  gas
  lines; and

  
	
   

  	
  o.

  	
  Water
  Street (abandoned).

  
	
   

  	
  p.

  	
  Notes
  on said map.

  



 

















 


	
  13.

  	
  Sanitary
  Sewer Easement is shown per Water Street Sanitary Sewer Plan and Easement
  reserved to the Town of Enfield per Council Action Feb.10, 1975.

  
	
   

  	
   

  
	
  14.

  	
  Parcel
  may be subject to rights to construct and maintain drainage structure and rip
  rap acquired from Gordon Brothers by Connecticut D.O.T. per plan number 266,
  Sheet 2 of 2, April 30, 1930.

  
	
   

  	
   

  
	
  15.

  	
  Possible
  rights of others for ingress and egress over abandoned portion of Water
  Street.

  
	
   

  	
   

  
	
  16.

  	
  Possible
  rights of others as defined in the Council Minutes dated February 10,
  1975 for the abandonment of Water Street.

  
	
   

  	
   

  
	
  17.

  	
  Assignment
  of Certificate of Deposit dated June 14, 2007 made by Specialized
  Technology Resources, Inc. in favor of Webster Bank relating to the
  Assignment of an $862,768 Certificate of Deposit as collateral for
  Specialized Technology Resources, Inc.’s obligations under the
  Reimbursement Agreement set forth in item 3 of Schedule 6.01 above.

  



 














 


EXHIBIT
A


 


[FORM OF]


 


ADMINISTRATIVE QUESTIONNAIRE


 


SPECIALIZED TECHNOLOGY RESOURCES, INC.


 


	
  Agent
  Information  

  	
  Agent
  Closing Contact

  
	
  Credit
  Suisse

  	
  Fay
  Rollins

  
	
  Eleven
  Madison Avenue

  	
  Tel:
  212-325-9041

  
	
  New
  York, NY 10010

  	
  Fax: 212-743-1422

  
	
   

  	
  E-Mail: fay.rollins@credit-suisse.com

  



 


Agent
Wire Instructions


Bank
of New York


ABA
021000018


Account
Name: CSFB Agency Cayman Account 


Account
Number: 8900492627


 


It
is very important that all of the
requested information be completed accurately and that this questionnaire be
returned promptly. If your institution is sub-allocating its allocation, please
fill out an administrative questionnaire for each legal entity.


 


Legal
Name of Lender to appear in Documentation:




 





 


	
  Signature
  Block Information:

  	
   

  



 


	
   

  	
  ·

  	
  Signing
  Credit Agreement

  	
  o Yes

  	
  o  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  Coming
  in via Assignment

  	
  o Yes

  	
  o No

  



 


	
  Type
  of Lender:

  	
   

  



 


(Bank,
Asset Manager, Broker/Dealer, CLO/CDO; Finance Company, Hedge Fund, Insurance,
Mutual Fund, Pension Fund, Other Regulated Investment Fund, Special Purpose
Vehicle, Other-please specify)


 


	
  Lender
  Parent:

  	
   

  



 


	
  Lender Domestic
  Address

  	
   

  	
  Lender
  Eurodollar Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


Contacts/Notification Methods: Borrowings, Paydowns,
Interest, Fees, etc.


 


	
   

  	
  Primary
  Credit Contact

  	
   

  	
  Secondary
  Credit Contact

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  E-Mail Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Primary
  Operations Contact

  	
   

  	
  Secondary
  Operations Contact

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  



 


Lender’s
Domestic Wire Instructions


 


	
  Bank Name:

  	
   

  
	
   

  	
   

  
	
  ABA/Routing No.:

  	
   

  
	
   

  	
   

  
	
  Account Name:

  	
   

  
	
   

  	
   

  
	
  Account No.:

  	
   

  
	
   

  	
   

  
	
  FFC Account Name:

  	
   

  
	
   

  	
   

  
	
  FFC Account No.:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Reference:

  	
   

  



 


2

















 


Tax Documents


 


NON-U.S.
LENDER INSTITUTIONS:


 


I. 
Corporations:


If
your institution is incorporated outside of the United States for U.S. federal
income tax purposes, and is the beneficial owner of the interest and
other income it receives, you must complete one of the following three tax
forms, as applicable to your institution: a.) Form W-8BEN (Certificate
of Foreign Status of Beneficial Owner),  b.) Form W-8ECI (Income
Effectively Connected to a U.S. Trade or Business),  or c.) Form W-8EXP (Certificate
of Foreign Government or Governmental Agency).


 


A
U.S. taxpayer identification number is required for any institution submitting Form W-8ECI.
It is also required on Form W-8BEN for certain institutions claiming the
benefits of a tax treaty with the U.S. Please refer to the instructions when
completing the form applicable to your institution. In addition, please be
advised that U.S. tax regulations do not permit the acceptance of faxed forms. An original tax form must be submitted.


 


II. 
Flow-Through Entities:


If
your institution is organized outside the U.S., and is classified for U.S.
federal income tax purposes as either a Partnership, Trust, Qualified or
Non-Qualified Intermediary, or other non-U.S. flow-through entity, an original Form W-8IMY (Certificate
of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches
for United States Tax Withholding) must be completed by the
intermediary together with a withholding statement. Flow-through entities other
than Qualified Intermediaries are required to include tax forms for each of the
underlying beneficial owners.


 


Please
refer to the instructions when completing this form. In addition, please be
advised that U.S. tax regulations do not permit the acceptance of faxed forms. Original tax form(s) must be submitted.


 


U.S. LENDER INSTITUTIONS:


 


If
your institution is incorporated or organized within the United
States, you must complete and return Form W-9 (Request
for Taxpayer Identification Number and Certification).  Please be advised that we request that you submit an original Form W-9.


 


Pursuant to the language contained in the
tax section of the Credit Agreement, the applicable tax form for your
institution must be completed and returned prior to the first payment of
income. Failure to provide the proper tax form when requested may subject your
institution to U.S. tax withholding.


 


3

















 


EXHIBIT B


 


[FORM OF]


 


ASSIGNMENT AND ACCEPTANCE


 


Reference
is made to the Second Lien Credit Agreement dated as of June 15, 2007 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),  among
Specialized Technology Resources, Inc. (successor by merger to STR
Acquisition, Inc.), a Delaware corporation (the “Borrower”),  STR Holdings
LLC, a Delaware limited liability company (“Holdings”),  the lenders
from time to time party thereto (the “Lenders”)
and Credit Suisse, as administrative agent (in such capacity, the “Administrative Agent”)  and as
collateral agent for the Lenders. Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.


 


1.     The Assignor hereby sells
and assigns, without recourse, to the Assignee, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Effective Date set forth below (but not prior to the registration of the
information contained herein in the Register pursuant to Section 9.04(e) of
the Credit Agreement), the interests set forth below (the “Assigned Interest”)  in the Assignor’s
rights and obligations under the Credit Agreement and the other Loan Documents,
including, without limitation, the amounts and percentages set forth below of (i) the
Commitments of the Assignor on the Effective Date and (ii) the Loans owing to the
Assignor which are outstanding on the Effective Date. Each of the Assignor and
the Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.04(c) of the Credit
Agreement, a copy of which has been received by each such party. From and after
the Effective Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of
a Lender thereunder and under the Loan Documents and (ii) the Assignor
shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement; provided  that the obligations of the Assignor under Section 9.16
of the Credit Agreement shall survive the execution of this Assignment and
Acceptance and the assignment of interests effected hereby.


 


2.     This Assignment and
Acceptance is being delivered to the Administrative Agent together with (i) if
the Assignee is organized under the laws of a jurisdiction outside the United
States, any forms referred to in Section 2.19(e) of the Credit
Agreement, duly completed and executed by such Assignee, (ii) if the
Assignee is not already a Lender under the Credit Agreement, a completed
Administrative Questionnaire and (iii) if required by Section 9.04(b) of
the Credit Agreement, a processing and recordation fee of $3,500.


 


3.     This Assignment and
Acceptance shall be governed by and construed in accordance with the laws of
the State of New York.


 

















 


Date
of Assignment:


 


Legal
Name of Assignor (“Assignor”):  


 


Legal
Name of Assignee (“Assignee”):  


 


Effective
Date of Assignment (“Effective Date”):


 


	
  Facility/Commitment

  	
   

  	
  Principal Amount

  Assigned(1)

  	
   

  	
  Percentage Assigned of 

  Commitment(1) (set forth, to at least 

  8 decimals, as a percentage of the 

  Facility and the aggregate 

  Commitments of all Lenders 

  thereunder)

  	
   

  
	
  Loans/Commitments

  	
   

  	
  $

  	
   

  	
  %

  	
   

  



 


[Remainder of page intentionally left blank]


 






(1) Amount of
Commitments and/or Loans assigned is governed by Section 9.04(b) of
the Credit Agreement.


 


2

















 


	
  The
  terms set forth above are hereby agreed to:

  	
   

  	
  Accepted:

  
	
   

  	
   

  	
   

  
	
                                   
  , as Assignor,

  	
   

  	
  [CREDIT
  SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent](2),

  
	
   

  	
   

  	
   

  
	
  by:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  by:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
                                   
  , as Assignee,

  	
   

  	
  by:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
  by:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 






(2) To the extent
required under the Credit Agreement.


 


3














 


EXHIBIT C


 


[FORM OF]


 


BORROWING REQUEST


 


Credit
Suisse, as Administrative Agent 


Eleven
Madison Avenue


New
York, New York 10010


 


ATTN:
Agency Group


 


[DATE](l)


 


Ladies
and Gentlemen:


 


The undersigned, STR ACQUISITION, INC., a Delaware
corporation (the “Borrower”), refers to the Second Lien
Credit Agreement dated as of June 15, 2007 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, STR Holdings LLC, a Delaware limited liability
company (“Holdings”),
the lenders from time to time party thereto (the “Lenders”) and Credit
Suisse, as administrative agent (in such capacity, the “Administrative Agent”)
and as collateral agent for the Lenders. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement.


 


The Borrower hereby gives you notice pursuant to Section 2.03
of the Credit Agreement that it requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Borrowing is requested to be made:


 


	
  (A)

  	
  Type
  of Borrowing:(2)

  	
   

  
	
   

  	
   

  	
   

  
	
  (B)

  	
  Date
  of Borrowing:(3)

  	
   

  
	
   

  	
   

  	
   

  
	
  (C)

  	
  Account
  Number and Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  (D)

  	
  Principal
  Amount of Borrowing:

  	
   

  
	
   

  	
   

  	
   

  
	
  (E)

  	
  Interest
  Period:(4)

  	
   

  



 






(1)          Must be notified
irrevocably by telephone (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon (New York City time), three Business Days before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later
than 12:00 noon (New York City time), one Business Day before a proposed
Borrowing, in each case to be promptly confirmed by hand delivery or fax.


 


(2) Specify whether such
Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing.


 


(3) Date of Borrowing must be a
Business Day.


 


(4) If such Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto.


 

















 


The
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders that, on the date of this Borrowing Request and on the date of the
related Borrowing, the conditions to lending specified in Article IV of
the Credit Agreement have been satisfied.


 


	
   

  	
  STR
  ACQUISITION, INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2














 


EXHIBIT D


 


[FORM OF]


 


SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT


 

















 


EXECUTION COPY




 





 


SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT


 


dated as of


 


June 15, 2007


 


among


 


STR ACQUISITION, INC.,


 


STR HOLDINGS LLC,


 


the Subsidiaries of the Borrower

from time to time party hereto


 


and


 


CREDIT SUISSE,

as Collateral Agent


 


THIS IS
THE SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT REFERRED TO IN (A) THE
INTERCREDITOR AGREEMENT OF EVEN DATE HEREWITH AMONG STR ACQUISITION, INC., STR
HOLDINGS LLC, THE SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME PARTY THERETO
AND CREDIT SUISSE, AS FIRST LIEN COLLATERAL AGENT AND AS SECOND LIEN COLLATERAL
AGENT AND (B) THE OTHER SECURITY DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENTS
REFERRED TO HEREIN.




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  
	
  Definitions

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.
  Credit Agreement

  	
   

  	
  2

  
	
  SECTION 1.02. Other Defined Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  
	
  Guarantee

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01. Guarantee

  	
   

  	
  6

  
	
  SECTION 2.02. Guarantee of Payment

  	
   

  	
  7

  
	
  SECTION 2.03. No Limitations, Etc.

  	
   

  	
  7

  
	
  SECTION 2.04. Reinstatement

  	
   

  	
  8

  
	
  SECTION 2.05. Agreement To Pay; Subrogation

  	
   

  	
  8

  
	
  SECTION 2.06. Information

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  
	
  Pledge of Securities

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01. Pledge

  	
   

  	
  9

  
	
  SECTION 3.02. Delivery of the Pledged Collateral

  	
   

  	
  10

  
	
  SECTION 3.03. Representations, Warranties and
  Covenants

  	
   

  	
  10

  
	
  SECTION 3.04. Certification of Limited Liability
  Company Interests and Limited Partnership Interests

  	
   

  	
  12

  
	
  SECTION 3.05. Registration in Nominee Name;
  Denominations

  	
   

  	
  12

  
	
  SECTION 3.06. Voting Rights; Dividends and Interest,
  Etc.

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  	
   

  
	
  Security Interests in Personal Property

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01. Security Interest

  	
   

  	
  15

  
	
  SECTION 4.02. Representations and Warranties

  	
   

  	
  16

  
	
  SECTION 4.03. Covenants

  	
   

  	
  18

  
	
  SECTION 4.04. Other Actions

  	
   

  	
  21

  
	
  SECTION 4.05. Covenants Regarding Patent, Trademark
  and Copyright Collateral

  	
   

  	
  24

  



 

















 


	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  Remedies

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01. Remedies Upon Default

  	
   

  	
  26

  
	
  SECTION 5.02. Application of Proceeds

  	
   

  	
  27

  
	
  SECTION 5.03. Grant of License to Use Intellectual
  Property

  	
   

  	
  28

  
	
  SECTION 5.04. Securities Act, Etc.

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  Indemnity, Subrogation and Subordination

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01. Indemnity and Subrogation

  	
   

  	
  29

  
	
  SECTION 6.02. Contribution and Subrogation

  	
   

  	
  30

  
	
  SECTION 6.03. Subordination

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01. Notices

  	
   

  	
  30

  
	
  SECTION 7.02. Security Interest Absolute

  	
   

  	
  31

  
	
  SECTION 7.03. Survival of Agreement

  	
   

  	
  31

  
	
  SECTION 7.04. Binding Effect; Several Agreement

  	
   

  	
  31

  
	
  SECTION 7.05. Successors and Assigns

  	
   

  	
  32

  
	
  SECTION 7.06. Collateral Agent’s Fees and Expenses;
  Indemnification

  	
   

  	
  32

  
	
  SECTION 7.07. Collateral Agent Appointed
  Attorney-in-Fact

  	
   

  	
  32

  
	
  SECTION 7.08. Applicable Law

  	
   

  	
  33

  
	
  SECTION 7.09. Waivers; Amendment

  	
   

  	
  33

  
	
  SECTION 7.10. WAIVER OF JURY TRIAL

  	
   

  	
  34

  
	
  SECTION 7.11. Severability

  	
   

  	
  34

  
	
  SECTION 7.12. Counterparts

  	
   

  	
  34

  
	
  SECTION 7.13. Headings

  	
   

  	
  35

  
	
  SECTION 7.14. Jurisdiction; Consent to Service of
  Process

  	
   

  	
  35

  
	
  SECTION 7.15. Termination or Release

  	
   

  	
  35

  
	
  SECTION 7.16. Additional Subsidiaries

  	
   

  	
  36

  
	
  SECTION 7.17. Right of Setoff

  	
   

  	
  36

  



 


ii

















 


	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule
  I

  	
  Subsidiary
  Guarantors

  
	
  Schedule
  II

  	
  Equity
  Interests; Pledged Debt Securities

  
	
  Schedule
  III

  	
  Intellectual
  Property

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Supplement

  
	
  Exhibit B

  	
  Form of
  Perfection Certificate

  



 


iii

















 


SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT dated
as of June 15, 2007 (this “Agreement”),  among STR
ACQUISITION, INC., a Delaware corporation, which substantially simultaneously
with the execution hereof shall be merged with and into SPECIALIZED TECHNOLOGY
RESOURCES, INC., a Delaware corporation (“STR”),  with STR being
the surviving entity (the “Borrower”),  STR HOLDINGS
LLC, a Delaware limited liability company (“Holdings”),  the
Subsidiaries of the Borrower from time to time party hereto and CREDIT SUISSE (“Credit Suisse”),  as collateral
agent (in such capacity, the “Collateral Agent”).


 


PRELIMINARY STATEMENT


 


Reference
is made to (a) the Second Lien Credit Agreement dated as of June 15, 2007 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),  among the
Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”)  and Credit
Suisse, as administrative agent (in such capacity, the “Administrative Agent”)  and Collateral
Agent, (b) the First Lien Credit Agreement dated as of June 15, 2007 (as
amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”),  among the
Borrower, Holdings, the Lenders and Credit Suisse, as administrative agent, (c)
the First Lien Guarantee and Collateral Agreement dated as of June 15, 2007 (as
amended, supplemented or otherwise modified from time to time, the “First Lien Guarantee and Collateral
Agreement”)  among the Borrower, Holdings, the Subsidiaries of
the Borrower from time to time party thereto and Credit Suisse, as first lien
collateral agent (in such capacity, the “First Lien Collateral Agent”),  and (d) the
Intercreditor Agreement dated as of June 15, 2007 (as amended, supplemented or
otherwise modified from time to time, the “Intercreditor Agreement”),  among Borrower,
Holdings, the Subsidiaries of the Borrower from time to time party thereto and
Credit Suisse, in its capacities as the Collateral Agent and as the First Lien
Collateral.


 


The
Lenders have agreed to extend credit to the Borrower pursuant to, and upon the
terms and conditions specified in, the Credit Agreement. The obligations of the
Lenders to extend credit to the Borrower are conditioned upon, among other
things, the execution and delivery of this Agreement by the Borrower and each
Guarantor (such term and each other capitalized term used but not defined in
this preliminary statement having the meaning given or ascribed to it in Article
I). Each Guarantor is an affiliate of the Borrower, will derive substantial
benefits from the extension of credit to the Borrower pursuant to the Credit
Agreement and is willing to execute and deliver this Agreement in order to
induce the Lenders to extend such credit. Accordingly, the parties hereto agree
as follows:


 

















 


ARTICLE I




Definitions


 


SECTION
1.01. Credit
Agreement. (a) Capitalized terms used in this Agreement and not
otherwise defined herein have the meanings set forth in the Credit Agreement.
All capitalized terms defined in the New York UCC (as such term is defined
herein) and not defined in this Agreement have the meanings specified therein.
All references to the Uniform Commercial Code shall mean the New York UCC.


 


(b)
The rules of construction specified in Section 1.02 of the Credit Agreement
also apply to this Agreement.


 


SECTION
1.02. Other
Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:


 


“Accounts
Receivable” shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities
and guarantees with respect thereto, including any rights to stoppage in
transit, replevin, reclamation and resales, and all related security interests,
liens and pledges, whether voluntary or involuntary, in each case whether now
existing or owned or hereafter arising or acquired.


 


“Administrative
Agent” shall have the meaning assigned to such term in the
preliminary statement.


 


“Article 9
Collateral” shall have the meaning assigned to such term in Section
4.01.


 


“Assignment of
Distributions” shall mean the assignment of distribution
substantially in the form of Exhibit C.


 


“Borrower” shall have the
meaning assigned to such term in the preamble.


 


“Collateral” shall mean the Article
9 Collateral and the Pledged Collateral.


 


“Collateral
Agent” shall have the meaning assigned to such term in the preamble.


 


“Copyright
License” shall mean any written agreement, now or hereafter
in effect, granting any right to any third person under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third person, and all rights of such Grantor under any
such agreement.


 


“Copyrights” shall mean all
of the following now owned or hereafter acquired by any Grantor: (a) all
copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or


 


2

















 


otherwise,
and (b) all registrations and applications for registration of any such
copyright in the United States or any other country, including registrations,
recordings, supplemental registrations and pending applications for registration
in the United States Copyright Office (or any successor office or any similar
office in any other country), including those listed on Schedule III.


 


“Discharge of First Lien Obligations”
shall have the meaning assigned to such term in the Intercreditor
Agreement.


 


“Excluded Assets”
shall mean (a) any lease, license, contract, property right or
agreement to which any Grantor is a party or any of its rights or interests
thereunder if and only for so long as the grant of a security interest hereunder
shall constitute or result in a breach, termination or default under any such
lease, license, contract, property right or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other
applicable law or principles of equity); provided, however, that any portion of
any such lease, license, contract, property right or agreement shall cease to
constitute an Excluded Asset pursuant to this clause at the time and to the
extent that the grant of security interest therein does not result in any of
the consequences specified above, (b) motor vehicles the perfection of a
security interest in which is excluded from the Uniform Commercial Code in the
relevant jurisdiction, (c) interests in real property, (d) any Equity Interest
in an Excluded Entity and (e) any application to register Trademarks in the
U.S. Patent and Trademark Office based upon Grantor’s “intent to use” such
Trademark (but only if the grant of security interest to such intent-to-use
Trademark violates 15 U.S.C. § 1060(a)) unless and until a “Statement of Use”
or “Amendment to Allege Use” is filed in the U.S. Patent and Trademark Office
with respect thereto, at which point the Collateral shall include, and the
security interest granted hereunder shall attach to, such application.


 


“Excluded Entity”
shall mean each of (i) STR-Registrar LLC, (ii) CTC Asia Ltd. and (iii) Specialized
Technology Resources (India) Pvt Ltd. to the extent that the necessary
governmental consents to make a valid and enforceable pledge of 66% of its
issued and outstanding stock to the Collateral Agent have not been obtained.


 


“Federal Securities Laws”
shall have the meaning assigned to such term in Section 5.04.


 


“First Lien Collateral Agent”
shall have the meaning assigned to such term in the preliminary
statement.


 


“First Lien Credit Agreement”
shall have the meaning assigned to such term in the preliminary
statement.


 


“First Lien Guarantee and Collateral Agreement”
shall have the meaning assigned to such term in the preliminary
statement.


 


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“First Lien Loan
Documents” shall have the meaning assigned to the term “Loan
Documents” in the First Lien Credit Agreement.


 


“First Lien
Obligations” shall have the meaning assigned to such term in the
Intercreditor Agreement.


 


“First Priority
Liens” shall have the meaning assigned to such term in the
Intercreditor Agreement.


 


“General
Intangibles” shall mean all choses in action and causes of action
and all other intangible personal property of any Grantor of every kind and
nature (other than Accounts) now owned or hereafter acquired by any Grantor,
including all rights and interests in partnerships, limited partnerships,
limited liability companies and other unincorporated entities, corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Hedging
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.


 


“Grantors” shall mean the
Borrower and the Guarantors.


 


“Guarantors” shall mean
Holdings and the Subsidiary Guarantors.


 


“Holdings” shall have the
meaning assigned to such term in the preamble.


 


“Intellectual
Property” shall mean all intellectual and similar property of
any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions
to, and books and records describing or used in connection with, any of the
foregoing.


 


“License” shall mean any
Patent License, Trademark License, Copyright License or other license or
sublicense agreement relating to Intellectual Property to which any Grantor is
a party, including those listed on Schedule III.


 


“New York UCC” shall mean the
Uniform Commercial Code as from time to time in effect in the State of New
York.


 


“Obligations” shall mean (a) the
due and punctual payment of (i) the principal of and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (ii) all other monetary obligations of the Borrower to any of the
Secured Parties under the


 


4

















 


Credit
Agreement and each of the other Loan Documents, including fees, costs, expenses
and indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), (b) the due and punctual
performance of all other obligations of the Borrower under or pursuant to the
Credit Agreement and each of the other Loan Documents, and (c) the due and
punctual payment and performance of all the obligations of each other Loan
Party under or pursuant to this Agreement and each of the other Loan Documents.


 


“Patent License”
shall mean any written agreement, now or hereafter in effect, granting
to any third person any right to make, use or sell any invention on which a
patent, now or hereafter owned by any Grantor or that any Grantor otherwise has
the right to license, is in existence, or granting to any Grantor any right to
make, use or sell any invention on which a patent, now or hereafter owned by
any third person, is in existence, and all rights of any Grantor under any such
agreement.


 


“Patents”  shall mean all
of the following now owned or hereafter acquired by any Grantor: (a) all
letters patent of the United States or the equivalent thereof in any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or the equivalent thereof in any other
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office (or any successor or any similar
offices in any other country), including those listed on Schedule III, and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.


 


“Perfection Certificate”
shall mean a certificate substantially in the form of Exhibit B,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Responsible Officer of the Borrower.


 


“Pledged Collateral”  shall have the
meaning assigned to such term in Section 3.01.


 


“Pledged Debt Securities”
shall have the meaning assigned to such term in Section 3.01.


 


“Pledged Securities”
shall mean any promissory notes, stock certificates or other securities
now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.


 


“Pledged Stock”  shall have the
meaning assigned to such term in Section 3.01.


 


“Secured Parties”
shall mean (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) the beneficiaries of each indemnification obligation


 


5














 


undertaken
by any Loan Party under any Loan Document and (e) the successors and assigns of
each of the foregoing.


 


“Security Interest”
shall have the meaning assigned to such term in Section 4.01.


 


“Subsidiary Guarantor”
shall mean (a) the Subsidiaries identified on Schedule I hereto as
Subsidiary Guarantors and (b) each other Subsidiary that becomes a party to
this Agreement as a Subsidiary Guarantor after the Closing Date; provided, however, that in no event shall
STR-Registrar LLC become a Subsidiary Guarantor.


 


“Trademark License”
shall mean any written agreement, now or hereafter in effect, granting
to any third person any right to use any trademark now or hereafter owned by
any Grantor or that any Grantor otherwise has the right to license, or granting
to any Grantor any right to use any trademark now or hereafter owned by any
third person, and all rights of any Grantor under any such agreement.


 


“Trademarks”  shall mean all
of the following now owned or hereafter acquired by any Grantor: (a) all trademarks,
service marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office (or any successor office) or any similar
offices in any State of the United States or any other country or any political
subdivision thereof, and all extensions or renewals thereof, including those
listed on Schedule III, (b) all goodwill associated therewith or symbolized
thereby and (c) all other assets, rights and interests that uniquely reflect or
embody such goodwill.


 


“Unfunded Advances”
shall mean the aggregate amount, if any (i) made available to the
Borrower on the assumption that each Lender has made its portion of the
applicable Borrowing available to the Administrative Agent as contemplated by Section
2.02(d) of the Credit Agreement and (ii) with respect to which a corresponding
amount shall not in fact have been returned to the Administrative Agent by the
Borrower or made available to the Administrative Agent by any such Lender.


 


ARTICLE II




Guarantee


 


SECTION
2.01. Guarantee.  Each Guarantor
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment and
performance of the Obligations. Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation for the ratable


 


6

















 


benefit
of the Secured Parties. Each Guarantor waives presentment to, demand of payment
from and protest to the Borrower or any other Loan Party of any Obligation, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.


 


SECTION
2.02. Guarantee
of Payment. Each Guarantor further agrees that its guarantee
hereunder constitutes a guarantee of payment when due and not of collection,
and waives any right to require that any resort be had by the Collateral Agent
or any other Secured Party to any security held for the payment of the
Obligations or to any balance of any Deposit Account or credit on the books of
the Collateral Agent or any other Secured Party in favor of the Borrower or any
other person.


 


SECTION
2.03. Nature
of Guarantee. (a) If and to the extent required in order for the
Obligations to be enforceable under applicable federal, state and other laws
relating to the insolvency of debtors, the maximum liability of such Guarantor
hereunder shall be limited to the greatest amount which can lawfully be
guaranteed by such Guarantor under such laws, after giving effect to any rights
of contribution, reimbursement and subrogation arising under Article VI. Each
Guarantor acknowledges and agrees that, to the extent not prohibited by
applicable law, (i) such Guarantor (as opposed to its creditors,
representatives of creditors or bankruptcy trustee, including such Guarantor in
its capacity as debtor in possession exercising any powers of a bankruptcy
trustee) has no personal right under such laws to reduce, or request any
judicial relief that has the effect of reducing, the amount of its liability
under this Agreement, (ii) such Guarantor (as opposed to its creditors,
representatives of creditors or bankruptcy trustee, including such Guarantor in
its capacity as debtor in possession exercising any powers of a bankruptcy
trustee) has no personal right to enforce the limitation set forth in this Section
2.03(a) or to reduce, or request judicial relief reducing, the amount of its
liability under this Agreement, and (iii) the limitation set forth in this Section
2.03(a) may be enforced only to the extent required under such laws in order
for the obligations of such Guarantor under this Agreement to be enforceable
under such laws and only by or for the benefit of a creditor, representative of
creditors or bankruptcy trustee of such Guarantor or other person entitled,
under such laws, to enforce the provisions thereof.


 


(b)
Except for termination of a Guarantor’s obligations hereunder as expressly
provided in Section 7.15, the obligations of each Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by (i) the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce any right or remedy under the provisions of any Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor under this Agreement, (iii)
the release of, or any impairment of or failure to perfect any Lien on or
security interest in, any security held by the Collateral Agent or any other
Secured Party for the Obligations or any of them,


 


7

















 


(iv)
any default, failure or delay, wilful or otherwise, in the performance of the
Obligations, or (v) any other act or omission that may or might in any manner
or to any extent vary the risk of any Guarantor or otherwise operate as a
discharge of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations). Subject to the
terms of this Agreement, each Guarantor expressly authorizes the Collateral
Agent to take and hold security for the payment and performance of the
Obligations, to exchange, waive or release any or all such security (with or
without consideration), to enforce or apply such security and direct the order
and manner of any sale thereof in its sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of
the Obligations, all without affecting the obligations of any Guarantor
hereunder.


 


(c)
To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other
Loan Party or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Borrower or
any other Loan Party, other than the indefeasible payment in full in cash of
all the Obligations. The Collateral Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security
in lieu of foreclosure, compromise or adjust any part of the Obligations, make
any other accommodation with the Borrower or any other Loan Party or exercise
any other right or remedy available to them against the Borrower or any other
Loan Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully and
indefeasibly paid in full in cash. To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other
right or remedy of such Guarantor against the Borrower or any other Loan Party,
as the case may be, or any security.


 


SECTION
2.04. Reinstatement.
Each Guarantor agrees that its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization
of the Borrower, any other Loan Party or otherwise.


 


SECTION
2.05. Agreement
To Pay; Subrogation. In furtherance of the foregoing and not in
limitation of any other right that the Collateral Agent or any other Secured
Party has at law or in equity against any Guarantor by virtue hereof, if the
Borrower or any other Loan Party shall fail to pay any Obligation when and as
the same shall become due (after taking into account any applicable grace
period), whether at maturity, by acceleration, after notice of prepayment or
otherwise, each Guarantor hereby promises to and will forthwith pay, or cause
to be paid, to the Collateral Agent for distribution to the applicable Secured
Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor
of any sums to the Collateral Agent as provided above, all rights of such
Guarantor against the Borrower or any other Guarantor arising as a result
thereof by way of right of subrogation, contribution, reimbursement,


 


8

















 


indemnity
or otherwise shall in all respects be subject to Article VI, provided that each Guarantor reserves any
and all other rights of reimbursement, contribution or subrogation at any time
available to it against any other Guarantor.


 


SECTION
2.06. Information.
Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower’s and each other Loan Party’s financial condition and
assets and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that neither the Collateral Agent nor
any other Secured Party will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.


 


ARTICLE III




Pledge of
Securities


 


SECTION
3.01. Pledge.
As security for the payment or performance, as the case may be, in full
of the Obligations, each Grantor hereby assigns and pledges to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, a security interest in, all of
such Grantor’s right, title and interest in, to and under (a)(i) the Equity
Interests owned by such Grantor on the date hereof (including all such Equity
Interests listed on Schedule II), (ii) any other Equity Interests obtained in
the future by such Grantor and (iii) the certificates representing all such
Equity Interests (all the foregoing collectively referred to herein as the “Pledged Stock”);  provided, however, that the Pledged Stock shall
not include (x) more than 66% of the issued and outstanding voting Equity
Interests of any Foreign Subsidiary or (y) an Excluded Asset, (b)(i) the debt
securities held by such Grantor on the date hereof (including all such debt
securities listed opposite the name of such Grantor on Schedule II), (ii) any
debt securities in the future issued to such Grantor and (iii) the promissory
notes and any other instruments evidencing such debt securities (all the
foregoing collectively referred to herein as the “Pledged Debt Securities”),  (c) all other
property that may be delivered to and held by the Collateral Agent pursuant to
the terms of this Section 3.01, (d) subject to Section 3.06, all payments of
principal or interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of, in
exchange for or upon the conversion of, and all other Proceeds received in
respect of, the securities referred to in clauses (a) and (b) above, (e) subject
to Section 3.06, all rights and privileges of such Grantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and (d) above,
and (f) all Proceeds of any of the foregoing (the items referred to in clauses (a)
through (f) above being collectively referred to as the “Pledged Collateral”);  provided, however, that notwithstanding any
other provision in this agreement, this Section 3.01 shall not, at any time,
constitute a grant of security interest in an Excluded Asset.


 


TO
HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the


 


9

















 


Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions
hereinafter set forth.


 


SECTION 3.02. Delivery of the Pledged Collateral. (a) Each
Grantor agrees promptly to deliver or cause to be delivered to the Collateral
Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien
Collateral Agent, acting as a gratuitous bailee of the Collateral Agent) any
and all certificates, instruments or other documents representing or evidencing
Pledged Securities.


 


(b) Each Grantor agrees promptly to deliver or
cause to be delivered to the Collateral Agent (or, prior to the Discharge of
First Lien Obligations, to the First Lien Collateral Agent, acting as a
gratuitous bailee of the Collateral Agent) any and all Pledged Debt Securities.


 


(c) Upon delivery to the Collateral Agent (or, prior
to the Discharge of First Lien Obligations, to the First Lien Collateral Agent,
acting as a gratuitous bailee of the Collateral Agent), (i) any certificate,
instrument or document representing or evidencing Pledged Securities shall be
accompanied by undated stock powers duly executed in blank or other undated
instruments of transfer satisfactory to the Collateral Agent and duly executed
in blank and by such other instruments and documents as the Collateral Agent
may reasonably request and (ii) all other property comprising part of the
Pledged Collateral shall be accompanied by proper instruments of assignment
duly executed by the applicable Grantor and such other instruments or documents
as the Collateral Agent may reasonably request. Each delivery of Pledged
Securities shall be accompanied by a schedule describing the applicable
securities, which schedule shall be attached hereto as Schedule II and made a
part hereof; provided that
failure to attach any such schedule hereto shall not affect the validity of the
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.


 


(d) In accordance with the terms of the
Intercreditor Agreement, all Pledged Collateral delivered to the First Lien
Collateral Agent shall be held by the First Lien Collateral Agent, until the
transfer of possession of such Pledged Collateral to the Collateral Agent
following the Discharge of First Lien Obligations, as gratuitous bailee for the
Secured Parties solely for the purpose of perfecting the security interest
therein granted under this Agreement.


 


SECTION 3.03. Representations, Warranties and Covenants. The
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:


 


(a) Schedule II correctly sets forth in all
material respects the percentage of the issued and outstanding shares of each
class of the Equity Interests of the issuer thereof represented by such Pledged
Stock and includes all Equity Interests, debt securities and promissory notes
required to be pledged hereunder;


 


10

















 


(b) the Pledged Stock and Pledged Debt Securities
have been duly and validly authorized and issued by the issuers thereof and (i)
in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the
case of Pledged Debt Securities, are legal, valid and binding obligations of
the issuers thereof;


 


(c) except for the security interests granted
hereunder (or otherwise permitted under the Credit Agreement), each Grantor (i)
is and, subject to any transfers made in compliance with the Credit Agreement,
will continue to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II as owned by such Grantor, (ii) holds
the same free and clear of all Liens, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than transfers made
in compliance with the Credit Agreement, and (iv) subject to Section 3.06 and
the terms of the Intercreditor Agreement, will cause any and all Pledged
Collateral, whether for value paid by such Grantor or otherwise, to be
forthwith deposited with the Collateral Agent (or, prior to the Discharge of
First Lien Obligations, to the First Lien Collateral Agent, acting as a
gratuitous bailee of the Collateral Agent) and pledged or assigned hereunder;


 


(d) except for restrictions and limitations imposed
by the Loan Documents or securities laws generally, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;


 


(e) each Grantor (i) has the power and authority to
pledge the Pledged Collateral pledged by it hereunder in the manner hereby done
or contemplated and (ii) will defend its title or interest thereto or therein
against any and all Liens (other than any Lien created or permitted by the Loan
Documents), however arising, of all persons
whomsoever;


 


(f) no consent or approval of any Governmental
Authority, any securities exchange or any other person was or is necessary to
the validity of the pledge effected hereby (other than such as have been
obtained and are in full force and effect or those that, if not obtained, could
not reasonably be expected to result in a Material Adverse Effect, );


 


(g) by virtue of the execution and delivery by each
Grantor of this Agreement, when any Pledged Securities are delivered to the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the
First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral
Agent) in accordance with this Agreement, the Collateral Agent will obtain a
legal, valid and perfected first priority (subject to the Intercreditor
Agreement) lien upon and security interest in


 


11

















 


such
Pledged Securities as security for the payment and performance of the
Obligations; and


 


(h) the pledge effected hereby is effective
to vest in the Collateral Agent, for the ratable benefit of the Secured
Parties, the rights of the Collateral Agent in the Pledged Collateral as set
forth herein and all action by any Grantor necessary or desirable to protect
and perfect the Lien on the Pledged Collateral has been duly taken.


 


SECTION
3.04. Certification
of Limited Liability Company Interests and Limited Partnership Interests. No interest of
any Grantor in any limited liability company or limited partnership which is a
Subsidiary and pledged hereunder is represented by a certificate. The Grantors
shall not, without the consent of the Administrative Agent, agree to any
amendment of the certificate of formation or limited liability company
agreement (or other comparable constituent document) governing Pledged Stock
which has the effect of turning previously uncertificated capital stock or
membership interests into certificated capital stock or membership interests or
which elects to treat any membership interest that is part of the Pledged Stock
as a “security” under Section 8-103 of the New York UCC.


 


SECTION
3.05. Registration
in Nominee Name; Denominations. The Collateral Agent, on
behalf of the Secured Parties, at any time after the Discharge of First Lien
Obligations, shall have the right (in its sole and absolute discretion) to hold
the Pledged Securities in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or
assigned in blank or in favor of the Collateral Agent. Each Grantor will
promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities in its
capacity as the registered owner thereof. The Collateral Agent shall at any
time after the Discharge of First Lien Obligations and during the occurrence
and continuation of an Event of Default have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.


 


SECTION
3.06. Voting
Rights; Dividends and Interest, Etc. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have given the Grantors reasonable advance notice of its intent to
exercise its rights under this Agreement (which notice shall be deemed to have
been given immediately upon the occurrence of an Event of Default under
paragraph (g) or (h) of Article VII of the Credit Agreement):


 


(i)           Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents; provided, however, that such rights and powers
shall not be exercised in any manner that could materially and adversely affect
the rights inuring to a holder of any Pledged Securities or the rights and
remedies of any of the


 


12

















 


Collateral
Agent or the other Secured Parties under this Agreement or the Credit Agreement
or any other Loan Document or the ability of the Secured Parties to exercise
the same.


 


(ii)            The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to each Grantor, all such
proxies, powers of attorney and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the
voting and/or consensual rights and powers it is entitled to exercise pursuant
to paragraph (i) above.


 


(iii)           Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to the
extent that such dividends, interest, principal and other distributions are
permitted by, and otherwise paid or distributed in accordance with, the terms
and conditions of the Credit Agreement, the other Loan Documents and applicable
law; provided, however, that any
noncash dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Securities or received in exchange for
Pledged Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral, and, if received by any Grantor, shall not be commingled by
such Grantor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the ratable benefit of the
Secured Parties and shall be forthwith delivered to the Collateral Agent (or,
prior to the Discharge of First Lien Obligations, to the First Lien Collateral
Agent, acting as a gratuitous bailee of the Collateral Agent) in the same form
as so received (with any necessary endorsement or instrument of assignment).
This paragraph (iii) shall not apply to dividends between or among the
Borrower, the Guarantors and any Subsidiaries only of property subject to a
perfected security interest under this Agreement; provided that the Borrower notifies
the Collateral Agent in writing, specifically referring to this Section 3.06 at
the time of such dividend and takes any actions the Collateral Agent specifies
to ensure the continuance of its perfected security interest in such property
under this Agreement.


 


(b)
Upon the occurrence and during the continuance of an Event of Default and in
any case subject to the terms of the Intercreditor Agreement, after the
Collateral Agent shall have notified (or shall be deemed to have notified
pursuant to Section 3.06(a)) the Grantors of the suspension of their rights
under paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor
to dividends, interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06


 


13

















 


shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive right
and authority to receive and retain such dividends, interest, principal or
other distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall
be held in trust for the benefit of the Collateral Agent, shall be segregated
from other property or funds of such Grantor and, subject to the rights of the
First Lien Collateral Agent and the obligations of the Grantors under the First
Lien Loan Documents and the Intercreditor Agreement, shall be forthwith
delivered to the Collateral Agent upon demand in the same form as so received
(with any necessary endorsement or instrument of assignment). Any and all money
and other property paid over to or received by the Collateral Agent pursuant to
the provisions of this paragraph (b) shall be retained by the Collateral Agent
in an account to be established by the Collateral Agent upon receipt of such
money or other property and shall be applied in accordance with the provisions
of Section 5.02. After all Events of Default have been cured or waived and each
applicable Grantor has delivered to the Administrative Agent certificates to
that effect, the Collateral Agent shall, promptly after all such Events of
Default have been cured or waived, repay to each applicable Grantor (without
interest) all dividends, interest, principal or other distributions that such
Grantor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section 3.06 and that remain in such account.


 


(c) Upon the occurrence and during the continuance
of an Event of Default, after the Collateral Agent shall have notified (or
shall be deemed to have notified pursuant to Section 3.06(a)) the Grantors of
the suspension of their rights under paragraph (a)(i) of this Section 3.06,
then all rights of any Grantor to exercise the voting and consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06,
and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section
3.06, shall cease, and all such rights shall thereupon become, subject to the
rights of the First Lien Collateral Agent and the obligations of the Grantors
under the First Lien Loan Documents and the Intercreditor Agreement, vested in
the Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required
Lenders, subject to the terms of the Intercreditor Agreement, the Collateral
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Grantors to exercise such
rights.


 


(d) Any notice given by the Collateral Agent to the
Grantors exercising its rights under paragraph (a) of this Section 3.06 (i) may
be given by telephone if promptly confirmed in writing, (ii) may be given to
one or more of the Grantors at the same or different times and (iii) may
suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii)
in part without suspending all such rights (as specified by the Collateral
Agent in its sole and absolute discretion) and without waiving or otherwise
affecting the Collateral Agent’s rights to give additional notices from time to
time suspending other rights so long as an Event of Default has occurred and is
continuing.


 


14






 










 


ARTICLE IV


 


Security Interests in Personal Property


 


SECTION 4.01.
Security Interest.  (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor
hereby assigns and pledges to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the “Security Interest”), in all right, title or interest in
or to any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Article 9 Collateral”):


 


(i)      all
Accounts;


 


(ii)     all
Chattel Paper;


 


(iii)    all
cash and Deposit Accounts;


 


(iv)    all
Documents;


 


(v)     all
Equipment;


 


(vi)    all
General Intangibles;


 


(vii)   all
Instruments;


 


(viii)  all
Inventory;


 


(ix)    all
Investment Property;


 


(x)     all
Letter-of-Credit Rights;


 


(xi)    all
Commercial Tort Claims;


 


(xii)   all
books and records pertaining to the Article 9 Collateral; and


 


(xiii)  to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing and all collateral
security and guarantees given by any person with respect to any of the
foregoing.


 


Notwithstanding
any provision in this Agreement, this Section 4.01(a) shall not, at any
time, constitute a grant of security interest in an Excluded Asset.


 


(b)
Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and
from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9
Collateral or any part thereof and amendments thereto that (i) indicate the
Article 9 Collateral as “all assets” of


 


15

















 


such
Grantor or words of similar effect, and (ii) contain the information required
by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including
(A) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (B) in the case
of a financing statement filed as a fixture filing, a sufficient description of
the real property to which such Article 9 Collateral relates. Each Grantor
agrees to provide such information to the Collateral Agent promptly upon
request.


 


Each
Grantor also ratifies its authorization for the Collateral Agent to file in any
relevant jurisdiction any initial financing statements or amendments thereto if
filed prior to the date hereof.


 


The
Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by each Grantor, without the
signature of any Grantor, and naming any Grantor or the Grantors as debtors and
the Collateral Agent as secured party.


 


(c) The Security Interest is granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.


 


SECTION 4.02.
Representations and Warranties. The Grantors
jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties that:


 


(a) Each Grantor has good
and valid rights in and title to the Article 9 Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full
power and authority to grant to the Collateral Agent, for the ratable benefit
of the Secured Parties, the Security Interest in such Article 9 Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than (i) any consent or approval that has been obtained
or (ii) those that, if not obtained, could not reasonably be expected to result
in a Material Adverse Effect.


 


(b) The Perfection
Certificate has been duly prepared, completed and executed and the information
set forth therein (including (x) the exact legal name of each Grantor and (y) the
jurisdiction of organization of each Grantor) is correct and complete as of the
Closing Date. Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral have
been prepared by the Collateral Agent based upon the information provided to
the Administrative Agent and the Secured Parties in the Perfection Certificate
for filing in each governmental, municipal or other office specified in
Section 2 of the Perfection Certificate (or specified by notice from the
Borrower to the


 


16

















 


Administrative Agent after the Closing Date in the case of filings,
recordings or registrations required by Sections 5.06 or 5.11 of the Credit
Agreement), which are all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright
Office in order to perfect the Security Interest in the Article 9
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all
Article 9 Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements. Each
Grantor represents and warrants that a fully executed short form agreement in
the form requested by the Collateral Agent and containing a description of all
material Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents and United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights has been delivered to the Collateral Agent
for recording by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. §261, 15 U.S.C. §1060 or 17
U.S.C. §205 and the regulations thereunder, as applicable, and otherwise as may
be required pursuant to the laws of any other necessary jurisdiction, to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Article 9 Collateral consisting of
Patents, Trademarks and Copyrights in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to
perfect the Security Interest with respect to any Article 9 Collateral
consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date hereof).


 


(c) The Security Interest
constitutes (i) a legal and valid security interest in all Article 9
Collateral securing the payment and performance of the Obligations, (ii) upon
completion of the filings described in Section 4.02(b), a perfected
security interest in all Article 9 Collateral in which a security interest
may be perfected by filing, recording or registering a financing statement or
analogous document in the United States (or any political subdivision thereof)
and its territories and possessions pursuant to the Uniform Commercial Code or
other applicable law in such jurisdictions and (iii) a security interest that
shall be perfected in all Article 9 Collateral to the extent that a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall be
prior to any other Lien on any of


 


17

















 


the
Article 9 Collateral, other than Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement that have priority as a matter of
law.


 


(d) The Article 9 Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement. As of the Closing Date,
no Grantor has filed or consented to the filing of (i) any financing statement
or analogous document under the Uniform Commercial Code or any other applicable
laws covering any Article 9 Collateral, (ii) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with the United States Patent and
Trademark Office or the United States Copyright Office, (iii) any notice under
the Assignment of Claims Act, or (iv) any assignment in which any Grantor
assigns any Article 9 Collateral or any security agreement or similar
instrument covering any Article 9 Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement and prior existing Liens no longer in
effect. No Grantor holds any Commercial Tort Claims seeking damages in excess
of $250,000 except as indicated on the Perfection Certificate.


 


SECTION 4.03.
Covenants.  (a) Each
Grantor agrees promptly to notify the Collateral Agent in writing of any change
in (i) its legal name, (ii) its identity or type of organization or corporate
structure, (iii) its Federal Taxpayer Identification Number or organizational
identification number or (iv) its jurisdiction of organization. Each Grantor agrees
promptly to provide the Collateral Agent with certified organizational
documents reflecting any of the changes described in the first sentence of this
paragraph. Each Grantor agrees not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to have a valid, legal and
perfected first priority (subject to the Intercreditor Agreement) security
interest in all the Article 9 Collateral. Each Grantor agrees promptly to
notify the Collateral Agent if any material portion of the Article 9
Collateral owned or held by such Grantor is damaged or destroyed.


 


(b)
Each Grantor agrees to maintain, at its own cost and expense, such complete and
accurate records with respect to the Article 9 Collateral owned by it as
is consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect
to any material part of the Article 9 Collateral, and, at such time or
times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail reasonably satisfactory to the Collateral Agent showing the
identity, amount and location of any material Article 9 Collateral, provided
that, unless an Event of Default has occurred and is continuing, the
Collateral Agent shall be limited to one such requests in each calendar year.


 


18

















 


(c) Each Grantor shall, at its own expense, take any and all actions
reasonably necessary to defend title to the Article 9 Collateral against
all persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.


 


(d) Each Grantor agrees, at its own expense, promptly to execute,
acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions as the Collateral Agent may from time
to time reasonably request to better assure, obtain, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and Taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing or continuation statements (including fixture
filings) or other documents in connection herewith or therewith. If any amount
payable to any Grantor under or in connection with any of the Article 9
Collateral shall be or become evidenced by any Instrument or Tangible Chattel
Paper, in excess of $250,000 individually or $500,000 in the aggregate, then such
Instrument or Tangible Chattel Paper shall be promptly pledged and delivered to
the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral
Agent, except to the extent the costs of such actions are, in the Collateral
Agent’s reasonable judgment, excessive in relation to the value of the security
to be afforded thereby or to the extent prohibited by applicable law (or in the
case of an amount payable by any Foreign Subsidiary, to the extent such actions
would, in the Borrower’s good faith determination, result in adverse tax
consequences); provided that prior to the
Discharge of First Lien Obligations, such delivery shall be made to the First
Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent.


 


Without
limiting the generality of the foregoing, each Grantor hereby authorizes the
Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule III or adding additional schedules
hereto to identify specifically any asset or item of a Grantor that may, in the
Collateral Agent’s reasonable judgment, constitute material Copyrights,
Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any material
inaccuracy of the representations and warranties made by such Grantor hereunder
with respect to such Collateral. Each Grantor agrees that it will use its
commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct in all material respects with respect to such Collateral within 30 days
after the date it has been notified by the Collateral Agent of the specific
identification of such Collateral.


 


(e) Subject to the terms of the Intercreditor Agreement, the Collateral
Agent and such persons as the Collateral Agent may designate shall have the right,
at the applicable Grantor’s own cost and expense, to inspect the Article 9
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Article 9 Collateral
is located, to discuss the applicable Grantor’s affairs with the officers of
such Grantor and its independent accountants and to verify the


 


19

















 


existence,
validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Article 9 Collateral, including, in the case
of Accounts or other Article 9 Collateral in the possession of any third
person, by contacting Account Debtors or the third person possessing such
Article 9 Collateral for the purpose of making such a verification. The
Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party.


 


(f) At its option, upon the
occurrence and continuance of an Event of Default, the Collateral Agent may
discharge past due Taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Article 9
Collateral and not expressly permitted pursuant to Section 5.03 or
Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on
demand for any reasonable and documented payment made or any expense incurred
by the Collateral Agent pursuant to the foregoing authorization; provided,
however, that nothing in this paragraph shall be interpreted
as excusing any Grantor from the performance of, or imposing any obligation on
the Collateral Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to Taxes, assessments, charges,
fees, Liens, security interests or other encumbrances and maintenance as set
forth herein or in the other Loan Documents.


 


(g) If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other person to secure payment and
performance of an Account, the value of which exceeds $250,000 individually or
$500,000 in the aggregate, such Grantor shall promptly assign such security
interest to the Collateral Agent for the ratable benefit of the Secured
Parties. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other person granting the security
interest.


 


(h) Each Grantor shall
remain liable to observe and perform all the material conditions and
obligations to be observed and performed by it under each contract, agreement
or instrument relating to the Article 9 Collateral, all in accordance with
the terms and conditions thereof, and each Grantor jointly and severally agrees
to indemnify and hold harmless the Collateral Agent and the Secured Parties
from and against any and all liability for such performance.


 


(i) No Grantor shall make or
permit to be made an assignment, pledge or hypothecation of the Article 9
Collateral or shall grant any other Lien in respect of the Article 9
Collateral or permit any notice to be filed under the Assignment of Claims Act,
except, in each case, as expressly permitted by Section 6.02 of the Credit
Agreement. No Grantor shall make or permit to be made any transfer of the
Article 9 Collateral and each Grantor shall remain at all times in
possession or otherwise in control of the Article 9 Collateral owned by
it, except as permitted by the Credit Agreement.


 


(j) No Grantor will, without
the Collateral Agent’s prior written consent, grant any extension of the time
of payment of any Accounts included in the Article 9


 


20

















 


Collateral,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises, compoundings or settlements granted or made in the
ordinary course of business and consistent with its current practices and in
accordance with such prudent and standard practice used in industries that are
the same as or similar to those in which such Grantor is engaged.


 


(k)
In the event that any Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required under the Credit Agreement
or to pay any premium in whole or part relating thereto, the Collateral Agent
may, without waiving or releasing any obligation or liability of any Grantor
hereunder or any Default or Event of Default and subject to the Intercreditor
Agreement, in its sole discretion, obtain and maintain such policies of
insurance and pay such premium and take any other actions with respect thereto
as the Collateral Agent deems advisable. All sums disbursed by the Collateral
Agent in connection with this paragraph, including attorneys’ fees, court
costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.


 


(l)
Each Grantor shall maintain, in form and manner satisfactory to the Collateral
Agent, records of its Chattel Paper and its books, records and documents
evidencing or pertaining thereto.


 


SECTION 4.04. Other Actions.  In order to
further insure the attachment, perfection and priority of, and the ability of
the Collateral Agent to enforce, the Security Interest in the Article 9
Collateral, each Grantor agrees, in each case at such Grantor’s own expense, to
take the following actions with respect to the following Article 9
Collateral:


 


(a)
Instruments.  If any Grantor shall at any
time hold or acquire any Instruments having a value in excess of $250,000, such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral
Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien
Collateral Agent as a gratuitous bailee of the Collateral Agent), accompanied
by such undated instruments of endorsement, transfer or assignment duly executed
in blank as the Collateral Agent may from time to time reasonably specify,
except to the extent the costs of such actions are, in the Collateral Agent’s
reasonable judgment, excessive in relation to the value of the security to be
afforded thereby or to the extent prohibited by applicable law (or in the case
of an amount payable by any Foreign Subsidiary, to the extent such actions
would, in the Borrower’s good faith determination, result in adverse tax
consequences).


 


(b)  Deposit Accounts.
For each Deposit Account that any Grantor at any time opens or
maintains, other than Deposit Accounts (A) that are payroll accounts,
withholdings tax accounts, petty cash accounts or flexible spending benefit
accounts or trust, escrow or other fiduciary accounts or (B) which do not hold
for any period of five consecutive days, an aggregate amount in excess of


 


21

















 


$1,000,000,
such Grantor shall, upon the Collateral Agent’s request, either (i) cause the
depositary bank to agree to comply at any time with instructions from the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, the
First Lien Collateral Agent) to such depositary bank directing the disposition
of funds from time to time credited to such Deposit Account, without further
consent of such Grantor or any other person, pursuant to an agreement in form
and substance satisfactory to the Collateral Agent, or (ii) arrange for the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, the
First Lien Collateral Agent) to become the customer of the depositary bank with
respect to the Deposit Account, with the Grantor being permitted, only with the
consent of the Collateral Agent, to exercise rights to withdraw funds from such
Deposit Account. The Collateral Agent agrees with each Grantor that the
Collateral Agent shall not give any such instructions or withhold any
withdrawal rights from any Grantor, unless an Event of Default has occurred and
is continuing, or, after giving effect to any withdrawal, would occur; provided,
however, upon the waiver by the applicable Required Lenders
of such Event of Default, so long as no other Event of Default shall then exist
or be continuing, the Collateral Agent shall revoke any such instruction. The
provisions of this paragraph shall not apply to any Deposit Account for which
any Grantor, the depositary bank and the Collateral Agent have entered into a
cash collateral agreement specially negotiated among such Grantor, the
depositary bank and the Collateral Agent for the specific purpose set forth
therein.


 


(c)  Investment Property.
If any securities, whether certificated or uncertificated, or other
Investment Property having a value in excess of $50,000 in the aggregate now or
hereafter acquired by any Grantor are held by such Grantor or its nominee
through a Securities Intermediary or Commodity Intermediary, such Grantor shall
promptly notify the Collateral Agent thereof and, at the Collateral Agent’s
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause such Securities
Intermediary or Commodity Intermediary, as the case may be, to agree to comply
with Entitlement Orders from the Collateral Agent (or, prior to the Discharge of
First Lien Obligations, the First Lien Collateral Agent) to such Securities
Intermediary as to such securities or other Investment Property, or (as the
case may be) to apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such Commodity Intermediary, in
each case without further consent of any Grantor or such nominee, or (ii) in
the case of Financial Assets (as governed by Article 8 of the New York
UCC) or other Investment Property held through a Securities Intermediary,
arrange for the Collateral Agent (or, prior to the Discharge of First Lien
Obligations, the First Lien Collateral Agent) to become the Entitlement Holder
with respect to such Investment Property, with the Grantor being permitted,
only with the consent of the Collateral Agent, to exercise rights to withdraw
or otherwise deal with such Investment Property. The Collateral Agent agrees
with each Grantor that the Collateral Agent shall not give any such Entitlement
Orders or instructions or directions to any such issuer, Securities
Intermediary or Commodity Intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing


 


22

















 


rights
by any Grantor, unless an Event of Default has occurred and is continuing, or,
after giving effect to any such investment and withdrawal rights would occur; provided,
however, upon the waiver by the applicable Required Lenders
of such Event of Default, so long as no other Event of Default shall then exist
or be continuing, the Collateral Agent shall revoke any such instruction. The
provisions of this paragraph shall not apply to any Financial Assets credited
to a Securities Account for which the Collateral Agent is the Securities
Intermediary.


 


(d) Electronic Chattel Paper and Transferable Records. If any Grantor
at any time holds or acquires an interest in any Electronic Chattel Paper or
any “transferable
record”,  as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, such Grantor shall
promptly notify the Collateral Agent thereof and, at the request of the
Collateral Agent, shall take such action as the Collateral Agent may request to
vest in the Collateral Agent (or, prior to the Discharge of First Lien
Obligations, the First Lien Collateral Agent) control under New York UCC
Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Collateral Agent agrees with such Grantor that the Collateral Agent
will arrange, pursuant to procedures satisfactory to the Collateral Agent and
so long as such procedures will not result in the Collateral Agent’s loss of
control, for the Grantor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case may
be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by such Grantor with respect to such Electronic Chattel Paper or
transferable record.


 


(e) Letter-of-Credit Rights. If any Grantor is at any
time a beneficiary under a letter of credit having a value in excess of
$500,000 now or hereafter issued in favor of such Grantor (other than Letters
of Credit and Letters of Credit Rights that do not constitute Supporting
Obligations in respect of other Collateral), such Grantor shall promptly notify
the Collateral Agent thereof and, at the request and option of the Collateral
Agent, and subject to the rights of the First Lien Collateral Agent and the
Obligations of the Grantors under the First Lien Loan Documents and the
Intercreditor Agreement, such Grantor shall, pursuant to an agreement in form
and substance satisfactory to the Collateral Agent, either (i) arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment
to the Collateral Agent of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Collateral Agent to become the transferee
beneficiary of the letter of credit, with the Collateral Agent agreeing, in
each case, that the proceeds of any drawing under the letter of credit are to
be paid to the applicable Grantor unless an Event of Default has occurred or is
continuing.


 


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(f) Commercial
Tort Claims. If any Grantor shall at any time hold or
acquire a Commercial Tort Claim seeking damages in an amount reasonably
estimated to exceed $250,000, the Grantor shall promptly notify the Collateral
Agent thereof in a writing signed by such Grantor including a summary
description of such claim and grant to the Collateral Agent, for the ratable
benefit of the Secured Parties, in such writing a security interest therein and
in the proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance satisfactory to the Collateral Agent.


 


SECTION 4.05.
Covenants Regarding Patent,
Trademark and Copyright Collateral. (a) Each Grantor agrees that
it will not, and will not permit any of its licensees to, do any act, or omit
to do any act, whereby any Patent that is material to the conduct of such
Grantor’s business may become abandoned, invalidated or dedicated to the
public, and agrees that it shall use commercially reasonable efforts to
continue to mark any products covered by a material Patent with the relevant
patent number as necessary and sufficient to establish and preserve its maximum
rights under applicable patent laws.


 


(b) Except as could not reasonably be expected to result in a Material
Adverse Effect, each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such
Grantor’s business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) use commercially reasonable
efforts to maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law and (iv) not knowingly use or knowingly
permit the use of such Trademark in violation of any third party rights.


 


(c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a Copyright material to the
conduct of such Grantor’s business, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary
and sufficient to establish and preserve its maximum rights under applicable
copyright laws.


 


(d) Each Grantor shall notify the Collateral Agent promptly if it knows
or has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business may become abandoned, lost or dedicated to the public,
or of any adverse determination or development (including the institution of,
or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, United States Copyright Office or any court
or similar office of any country) regarding such Grantor’s ownership of any
Patent, Trademark or Copyright, its right to register the same, or its right to
keep and maintain the same.


 


(e) Except as could not reasonably be expected to result in a Material
Adverse Effect, no Grantor shall, either itself or through any agent, employee,
licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office,


 


24

















 


United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
unless it promptly notifies the Collateral Agent, and, upon request of the
Collateral Agent, executes and delivers any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence the
Security Interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Collateral Agent as its attorney-in-fact to execute and
file such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, is
irrevocable.


 


(f) Except as could not reasonably be expected to result in a Material
Adverse Effect, each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct
of any Grantor’s business, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.


 


(g) In the event that any Grantor knows or has reason to believe that
any Article 9 Collateral consisting of a Patent, Trademark or Copyright
material to the conduct of any Grantor’s business has been or is about to be
infringed, misappropriated or diluted by a third person, such Grantor promptly
shall notify the Collateral Agent and shall, if consistent with good business
judgment, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the
circumstances to protect such Article 9 Collateral.


 


(h) Upon the occurrence and during the continuance of an Event of
Default, each Grantor shall use its commercially reasonable efforts to obtain
all requisite consents or approvals by the licensor of each Copyright License,
Patent License or Trademark License, and each other material License, to effect
the assignment of all such Grantor’s right, title and interest thereunder to
the Collateral Agent, for the ratable benefit of the Secured Parties, or its
designee.


 


SECTION 4.06. Assignment of Distributions. The Borrower shall execute
the Assignment of Distributions in the form attached hereto as Exhibit C
in favor of the Collateral Agent with respect to its rights to any
distributions of STR-Registrar LLC.


 


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ARTICLE V


 


Remedies


 


SECTION 5.01.
Remedies Upon Default.  Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed
that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Article 9 Collateral consisting of Intellectual Property, on demand, to
cause the Security Interest to become an assignment, transfer and conveyance of
any of or all such Article 9 Collateral by the applicable Grantor to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice (except any notice required by law) or demand for performance, to take
possession of the Article 9 Collateral and without liability for trespass
to enter any premises where the Article 9 Collateral may be located for
the purpose of taking possession of or removing the Article 9 Collateral
and, generally, to exercise any and all rights afforded to a secured party
under the Uniform Commercial Code or other applicable law. Without limiting the
generality of the foregoing, each Grantor agrees that the Collateral Agent
shall have the right, subject to the mandatory requirements of applicable law,
to sell or otherwise dispose of all or any part of the Collateral at a public
or private sale or at any broker’s board or on any securities exchange, for
cash, upon credit or for future delivery as the Collateral Agent shall deem
appropriate. The Collateral Agent shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Collateral Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any such sale shall hold
the property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing
or hereafter enacted.


 


The
Collateral Agent shall give each applicable Grantor 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.
Such notice, in the case of a public sale, shall state the time and place for
such sale and, in the case of a sale at a broker’s board or on a securities
exchange, shall state the board or exchange at which such sale is to be made
and the day on which the Collateral, or portion thereof, will first be offered
for sale at such board or exchange. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice (if any) of such sale. At any
such sale, the


 


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Collateral,
or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. In case any sale of all
or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Collateral Agent until the sale price
is paid by the purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers shall fail to
take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. At any public (or, to the
extent permitted by law, private) sale made pursuant to this Agreement, any
Secured Party may bid for or purchase, free (to the extent permitted by
applicable law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by applicable law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim
then due and payable to such Secured Party from any Grantor as a credit against
the purchase price, and such Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of
the Collateral or any portion thereof subject thereto, subject to
Section 5.02 of this Agreement, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any
sale pursuant to the provisions of this Section 5.01 shall be deemed to
conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.


 


Any
remedies provided in this Section 5.01 shall be subject to the
Intercreditor Agreement.


 


SECTION 5.02.
Application of Proceeds.  Subject to the Intercreditor
Agreement, the Collateral Agent shall apply the proceeds of any collection,
sale, foreclosure or other realization upon any Collateral, including any
Collateral consisting of cash, as follows:


 


FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in their respective capacities as
such hereunder or under any other Loan Document) in connection with such


 


27

















 


collection,
sale, foreclosure or realization or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent and/or the
Collateral Agent hereunder or under any other Loan Document on behalf of any
Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document;


 


SECOND, to the payment in full of Unfunded Advances (the amounts so
applied to be distributed between or among the Secured Parties pro rata in
accordance with the amounts of Unfunded Advances owed to them on the date of
any such distribution);


 


THIRD, to the payment in full of all other Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution);


 


FOURTH, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.


 


The
Collateral Agent shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Agreement.
Upon any sale of Collateral by the Collateral Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt
of the Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such purchaser
or purchasers shall not be obligated to see to the application of any part of
the purchase money paid over to the Collateral Agent or such officer or be
answerable in any way for the misapplication thereof.


 


SECTION 5.03.
Grant of License to Use Intellectual Property.  For the purpose of enabling
the Collateral Agent to exercise rights and remedies under this Agreement at
such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Collateral Agent an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Grantors), to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs used
for the compilation or printout thereof. The use of such license by the
Collateral Agent may be exercised, at the option of the Collateral Agent, only
upon the occurrence and during the continuation of an Event of Default; provided,
however, that any license, sublicense or other transaction
entered into by the Collateral Agent in accordance herewith shall be binding
upon each Grantor notwithstanding any subsequent cure of an Event of Default.


 


SECTION 5.04.
Securities Act, Etc.  In view of the position of
the Grantors in relation to the Pledged Collateral, or because of other current
or future


 


28

















 


circumstances,
a question may arise under the U.S. Securities Act of 1933, as now or hereafter
in effect, or any similar statute hereafter enacted analogous in purpose or
effect (such Act and any such similar statute as from time to time in effect
being called the “Federal Securities Laws”)  with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Collateral Agent if the Collateral
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same. Similarly,
there may be other legal restrictions or limitations affecting the Collateral
Agent in any attempt to dispose of all or part of the Pledged Collateral under
applicable “blue sky” or other state securities laws or similar laws analogous
in purpose or effect. Each Grantor recognizes that in light of such
restrictions and limitations the Collateral Agent may, with respect to any sale
of the Pledged Collateral, limit the purchasers to those who will agree, among
other things, to acquire such Pledged Collateral for their own account, for
investment, and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its sole and absolute discretion (subject
to the Intercreditor Agreement) (a) may proceed to make such a sale
whether or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a limited number of potential
purchasers (including a single potential purchaser) to effect such sale. Each
Grantor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability for selling all or any part of the
Pledged Collateral at a price that the Collateral Agent, in its sole and
absolute discretion (subject to the terms of the Intercreditor Agreement), may
in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a
limited number of purchasers (or a single purchaser) were approached. The provisions of
this Section 5.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.


 


ARTICLE VI


 


Indemnity, Subrogation and
Subordination


 


SECTION 6.01.
Indemnity and Subrogation.  In addition to all such
rights of indemnity and subrogation as the Guarantors may have under applicable
law (but subject to Section 6.03), the Borrower agrees that (a) in
the event a payment shall be made by any Guarantor under this Agreement, the
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be subrogated to the rights of the person to whom such
payment shall have been made to the extent of such payment and (b) in the
event any assets of any Guarantor shall be sold pursuant to this Agreement or
any other Security Document to satisfy in whole or in part a claim of any


 


29

















 


Secured
Party, the Borrower shall indemnify such Guarantor in an amount equal to the
greater of the book value or the fair market value of the assets so sold.


 


SECTION 6.02.
Contribution and Subrogation.  Each Guarantor (a “Contributing
Guarantor”)  agrees (subject
to Section 6.03) that, in the event a payment shall be made by any other
Guarantor hereunder in respect of any Obligation, or assets of any other
Guarantor shall be sold pursuant to any Security Document to satisfy any
Obligation owed to any Secured Party, and such other Guarantor (the “Claiming
Guarantor”)  shall not have
been fully indemnified by the Borrower as provided in Section 6.01, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount
equal to (i) the amount of such payment or (ii) the greater of the
book value or the fair market value of such assets, as the case may be, in each
case multiplied by a fraction of which the numerator shall be the net worth of
the Contributing Guarantor on the date hereof and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, in the case
of any Guarantor becoming a party hereto pursuant to Section 7.16, the
date of the supplement hereto executed and delivered by such Guarantor). Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 6.02 shall be subrogated to the rights of such Claiming
Guarantor under Section 6.01 to the extent of such payment.


 


SECTION 6.03.
Subordination.  (a) Notwithstanding any
provision of this Agreement to the contrary, all rights of the Guarantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations. No failure on the
part of the Borrower or any Guarantor to make the payments required by Sections
6.01 and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor with respect to its obligations hereunder, and each Guarantor shall
remain liable for the full amount of its obligations hereunder.


 


(b) The
Borrower and each Guarantor hereby agree that all Indebtedness and other
monetary obligations owed by it to any Subsidiary that is not a Loan Party (or,
in the case of the Borrower, any Subsidiary) shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations, it being agreed that,
for greater certainty, other than upon the occurrence and during the continuance
of an Event of Default, the Borrower and each Guarantor shall be allowed to
make payments with respect to Indebtedness permitted to be incurred pursuant to
Section 6.01 of the Credit Agreement in accordance with the terms thereof.


 


ARTICLE VII


 


Miscellaneous


 


SECTION 7.01.
Notices.  All communications and
notices hereunder shall (except as otherwise expressly permitted herein) be in
writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any


 


30

















 


Subsidiary
Guarantor shall be given to it in care of the Borrower as provided in
Section 9.01 of the Credit Agreement.


 


SECTION 7.02.
Security Interest Absolute.  All rights of the Collateral
Agent hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument
relating to the foregoing, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of
the Obligations or this Agreement.


 


SECTION 7.03.
Survival of Agreement.  All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans, regardless
of any investigation made by any Lender or on their behalf and notwithstanding
that the Collateral Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended under the Credit Agreement, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under any Loan Document is outstanding and
unpaid or the aggregate L/C Exposure does not equal zero and so long as the
Commitments have not expired or terminated.


 


SECTION 7.04.
Binding Effect; Several Agreement.  This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Loan Party and the Collateral Agent
and their respective permitted successors and assigns, and shall inure to the
benefit of such Loan Party, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Loan Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated or permitted by this Agreement or the
Credit Agreement. This Agreement shall be construed as a separate agreement
with respect to each Loan Party and may be amended, modified, supplemented,
waived or released with respect to any Loan Party without the approval of any
other Loan Party and without affecting the obligations of any other Loan Party
hereunder.


 


31

















 


SECTION 7.05.
Successors and Assigns.  Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.


 


SECTION 7.06.
Collateral Agent’s Fees and Expenses; Indemnification.  (a) The parties hereto
agree that the Collateral Agent shall be entitled to reimbursement of its
expenses incurred hereunder as provided in Section 9.05 of the Credit
Agreement.


 


(b)   Without limitation of its
indemnification obligations under the other Loan Documents, each Grantor
jointly and severally agrees to indemnify the Collateral Agent and the other
indemnitees against, and hold each indemnitee harmless from, any and all
losses, claims, damages, liabilities, and related out of pocket expenses, including
the fees, charges and disbursements of any counsel for any indemnitee, incurred
by or asserted against any indemnitee arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any agreement or instrument contemplated hereby or any claim,
litigation, investigation or proceeding relating to any of the foregoing or to
the Collateral, regardless of whether any indemnitee is a party thereto or
whether initiated by a third party or by a Loan Party or any Affiliate thereof;
provided, however, that such indemnity shall
not, as to any indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or wilful misconduct of such indemnitee. To the extent
permitted by applicable law, no Grantor shall assert, and each Grantor hereby
waives any claim against any indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or the use of proceeds thereof.


 


(c)   Any such amounts payable as
provided hereunder shall be additional Obligations secured hereby and by the
other Security Documents. The provisions of this Section 7.06 shall remain
operative and in full force and effect regardless of the termination of this
Agreement or any other Loan Document, the consummation of the transactions
contemplated hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or
any other Secured Party. All amounts due under this Section 7.06 shall be
payable on written demand therefor and shall bear interest, on and from the date
of demand, at the rate specified in Section 2.06(a) of the Credit
Agreement.


 


SECTION 7.07.
Collateral Agent Appointed Attorney-in-Fact.  Subject to the terms of the
Intercreditor Agreement, each Grantor hereby appoints the Collateral Agent as
the attorney-in-fact of such Grantor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof,


 


32

















 


which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, subject to the terms of the Intercreditor
Agreement, the Collateral Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor
(a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof, (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral, (c) to sign the name of any Grantor on any invoice
or bill of lading relating to any of the Collateral, (d) to send
verifications of Accounts Receivable to any Account Debtor, (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize
on all or any of the Collateral or to enforce any rights in respect of any
Collateral, (f) to settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to all or any of the Collateral,
(g) to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Collateral Agent, and (h) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement in accordance with its
terms, as fully and completely as though the Collateral Agent were the absolute
owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as
requiring or obligating the Collateral Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence, wilful misconduct or bad faith.
Notwithstanding anything to the contrary in this Section 7.07, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for herein unless an Event of Default shall have occurred and
be continuing.


 


SECTION 7.08.
Applicable Law.  THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.


 


SECTION 7.09.
Waivers; Amendment.  (a) No failure or delay
by the Collateral Agent, the Administrative Agent or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as
a waiver hereof or thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Collateral
Agent, the Administrative Agent and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any


 


33

















 


event
be effective unless the same shall be permitted by paragraph (b) of this
Section 7.09, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Collateral Agent or any Lender
may have had notice or knowledge of such Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.


 


(b) Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Collateral Agent and the Loan Party or Loan Parties with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.08 of the Credit Agreement.


 


SECTION 7.10.
WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.10.


 


SECTION 7.11.
Severability.  In the event any one or more
of the provisions contained in this Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision
in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.


 


SECTION 7.12.
Counterparts.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when
taken together shall constitute a single contract, and shall become effective
as provided in Section 7.04. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.


 


34

















 


SECTION 7.13.
Headings.  Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.


 


SECTION 7.14.
Jurisdiction; Consent to Service of
Process.  (a) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or Federal
court of the United States of America, sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each party hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each party hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Collateral Agent, the Administrative Agent, or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Grantor or its properties in
the courts of any jurisdiction.


 


(b)   Each party hereto hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(a) of this Section 7.14. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


(c)   Each party hereto hereby
irrevocably consents to service of process in the manner provided for notices
in Section 7.01. Nothing in this Agreement or any other Loan Document will
affect the right of the Collateral Agent to serve process in any other manner
permitted by law.


 


SECTION 7.15.
Termination or Release.  (a) This Agreement, the
guarantees made herein, the Security Interest, the pledge of the Pledged Collateral
and all other security interests granted hereby shall terminate when all the
Obligations have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement.


 


(b) A
Subsidiary Guarantor shall automatically be released from its obligations
hereunder and the Security Interests created hereunder in the Collateral of
such Subsidiary Guarantor shall be automatically released upon the consummation
of any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Guarantor ceases to be a Subsidiary.


 


35














 


(c)   Upon any sale or other
transfer by any Grantor of any Collateral that is permitted under the Credit
Agreement to any person that is not the Borrower or a Guarantor, or, upon the
effectiveness of any written consent to the release of the Security Interest
granted hereby in any Collateral pursuant to Section 9.08 of the Credit
Agreement, the Security Interest in such Collateral shall be automatically
released.


 


(d)   In connection with any
termination or release pursuant to paragraph (a), (b) or (c) above,
the Collateral Agent shall promptly execute and deliver to any Grantor, at such
Grantor’s expense, all Uniform Commercial Code termination statements and
similar documents that such Grantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to
this Section 7.15 shall be without recourse to or representation or
warranty by the Collateral Agent or any Secured Party. Without limiting the
provisions of Section 7.06, the Borrower shall reimburse the Collateral
Agent upon demand for all costs and out of pocket expenses, including the fees,
charges and expenses of counsel, incurred by it in connection with any action
contemplated by this Section 7.15.


 


SECTION 7.16. Additional Subsidiaries.  Any Subsidiary
that is required to become a party hereto pursuant to Section 5.11 of the
Credit Agreement shall enter into this Agreement as a Subsidiary Guarantor and
a Grantor upon becoming such a Subsidiary. Upon execution and delivery by the
Collateral Agent and such Subsidiary of a supplement in the form of
Exhibit A hereto, such Subsidiary shall become a Subsidiary Guarantor and
a Grantor hereunder with the same force and effect as if originally named as a
Subsidiary Guarantor and a Grantor herein. The execution and delivery of any
such instrument shall not require the consent of any other Loan Party
hereunder. The rights and obligations of each Loan Party hereunder shall remain
in full force and effect notwithstanding the addition of any new Loan Party as
a party to this Agreement.


 


SECTION 7.17. Right of Setoff.  If an Event of
Default shall have occurred and is continuing, each Secured Party is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all Collateral (including any deposits
(general or special, time or demand, provisional or final)) at any time held
and other obligations at any time owing by such Secured Party to or for the
credit or the account of any Grantor against any and all of the obligations of
such Grantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Secured Party, irrespective of whether or not such
Secured Party shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each
Secured Party under this Section 7.17 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.


 


SECTION 7.18. Intercreditor Agreement Governs.  NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND
THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO


 


36

















 


THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS
AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.


 


SECTION 7.19.
Obligations of Grantors.  To the extent that the
obligations of any Grantor hereunder shall conflict, or shall be inconsistent,
with the obligations of such Grantor under the First Lien Guarantee and
Collateral Agreement, the provisions of the First Lien Guarantee and Collateral
Agreement shall control.


 


SECTION 7.20.
Delivery of Collateral.  Notwithstanding anything
herein to the contrary, prior to the Discharge of First Lien Obligations, to
the extent any Grantor is required hereunder to deliver Collateral to the
Collateral Agent for purposes of possession and control and is unable to do so
as a result of having previously delivered such Collateral to the First Lien
Collateral Agent in accordance with the terms of the First Lien Guarantee and
Collateral Agreement, such Grantor’s obligations hereunder with respect to such
delivery shall be deemed satisfied by the delivery to the First Lien Collateral
Agent, acting as a gratuitous bailee of the Collateral Agent.


 


[Remainder of page intentionally left blank]


 


37

















 


IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.


 


	
   

  	
  STR
  ACQUISITION, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Jason Metakis

  
	
   

  	
   

  	
  Name:

  	
  Jason
  Metakis

  
	
   

  	
   

  	
  Title:
  

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STR
  HOLDINGS LLC,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Jason Metakis

  
	
   

  	
   

  	
  Name:
  

  	
  Jason
  Metakis

  
	
   

  	
   

  	
  Title:
  

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CAL
  SAFETY COMPLIANCE CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


[Second Lien Guarantee and Collateral
Agreement]


 

















 


IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.


 


	
   

  	
  STR
  ACQUISITION, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  STR
  HOLDINGS LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CAL
  SAFETY COMPLIANCE CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Assistant
  Secretary

  



 


[Second Lien Guarantee and Collateral
Agreement]


 

















 


	
   

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES (INTERNATIONAL), INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SHUSTER
  LABORATORIES, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUPPLY
  CHAIN CONSULTING SERVICES CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES (FLORIDA), INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STR
  MATERIALS SCIENCE, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:
  

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:
  

  	
  Secretary

  



 


[Second Lien Guarantee and Collateral
Agreement]


 

















 


	
   

  	
  SUPPLY
  CHAIN CONSULTING SERVICES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Thomas D. Vitro

  
	
   

  	
   

  	
  Name:
  

  	
  Thomas
  D. Vitro

  
	
   

  	
   

  	
  Title:
  

  	
  Assistant
  Secretary

  



 


[Second
Lien Guarantee and Collateral Agreement]


 

















 


	
   

  	
  CREDIT
  SUISSE, CAYMAN ISLANDS BRANCH, as Collateral Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Rianka Mohan

  
	
   

  	
   

  	
  Name:
  

  	
  RIANKA
  MOHAN

  
	
   

  	
   

  	
  Title:
  

  	
  VICE
  PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  James Neira

  
	
   

  	
   

  	
  Name:
  

  	
  JAMES
  NEIRA

  
	
   

  	
   

  	
  Title:
  

  	
  ASSOCIATE

  



 


[Second Lien Guarantee and Collateral
Agreement]


 














 


EXHIBIT E


 


[FORM OF]


 


SECOND LIEN MORTGAGE


 



















 





 


SECOND LIEN OPEN-END MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS,

SECURITY AGREEMENT AND FINANCING STATEMENT


 


From


 


SPECIALIZED TECHNOLOGY RESOURCES, INC.


 


To


 


CREDIT SUISSE


 


	
  


  

  
	
   

  
	
  Dated: June 15, 2007

  Premises: Enfield, Connecticut

  Hartford County

  
	
   

  
	
  


  

  





 





 


1

















 


THIS SECOND LIEN OPEN-END MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING  STATEMENT dated as of June 15,
2007 (this “Mortgage”), by SPECIALIZED TECHNOLOGY RESOURCES, INC., a Delaware
corporation, having an office at 10 Water Street, Enfield, CT 06082-4899 (the
“Mortgagor”), to CREDIT SUISSE, having an office at Eleven Madison Avenue, New
York, New York 10010 (the “Mortgagee”) as Collateral Agent for the Secured
Parties (as such terms are defined below).


 


WITNESSETH THAT:


 


Reference
is made to (i) the Second Lien Credit Agreement dated as of even date
hereof (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among STR Acquisition, Inc., a Delaware corporation
(“Acquisition”), which substantially simultaneously with the execution hereof
shall be merged with and into Specialized Technology Resources, Inc., a
Delaware corporation (“STR”), with STR being the surviving entity (the
“Borrower”), STR Holdings LLC, a Delaware limited liability company
(“Holdings”), the lenders from time to time party thereto (the “Lenders”) and
Credit Suisse, as administrative agent (in such capacity, the “Administrative Agent”)
for the Lenders and collateral agent (in such capacity, the “Collateral Agent”)
for the Secured Parties, (ii) the Second Lien Guarantee and Collateral
Agreement dated as of even date hereof (as amended, supplemented or otherwise
modified from time to time, the “Guarantee and Collateral Agreement”) among
Acquisition, Holdings, the subsidiaries of Acquisition from time to time party
thereto and Credit Suisse and (iii) the Intercreditor Agreement dated as
of even date hereof (as amended, supplemented or otherwise modified from time
to time, the “Intercreditor Agreement”) among Acquisition, Holdings, the
subsidiaries of Acquisition from time to time party thereto and Credit Suisse
as first lien collateral agent and as second lien collateral agent. Capitalized
terms used but not defined herein have the meanings given to them in the Credit
Agreement and the Guarantee and Collateral Agreement.


 


In
the Credit Agreement, (i) the Lenders have agreed to make term loans (the
“Loans”) pursuant to, upon the terms, and subject to the conditions specified
in, the Credit Agreement. Amounts paid in respect of the Loans may not be
reborrowed. The Credit Agreement provides that the principal amount of the
Loans outstanding and secured hereby shall not exceed $75,000,000 to be
advanced and fully funded on the date hereof.


 


Mortgagor
will be the Borrower subsequent to the merger referenced above and will derive
substantial benefit from the making of the Loans by the Lenders. In order to
induce the Lenders to make the Loans, the Mortgagor has agreed to grant this
Mortgage to secure, among other things, the due and punctual payment and
performance of all of the obligations of the Borrower under the Credit
Agreement.


 


The
obligations of the Lenders to make the Loans are conditioned upon, among other
things, the execution and delivery by the Mortgagor of this Mortgage in the
form hereof to secure the Obligations. As used in this Mortgage, the term
“Obligations” shall mean (a) the Loan Document Obligations and (b) the
due and punctual payment and performance of all


 


2

















 


obligations
of each Loan Party under each Hedging Agreement that (i) is in effect on
the Closing Date with a counterparty that is the Administrative Agent or a
Lender or an Affiliate of the Administrative Agent or a Lender as of the
Closing Date or (ii) is entered into after the Closing Date with any
counterparty that is the Administrative Agent or a Lender or an Affiliate of
the Administrative Agent or a Lender at the time such Hedging Agreement is
entered into.


 


As used in this Mortgage, the term “Secured Parties”
shall mean (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) each counterparty to any Hedging Agreement with a
Loan Party that either (i) is in effect on the Closing Date if such
counterparty is the Administrative Agent, a Lender or an Affiliate of the
Administrative Agent or a Lender as of the Closing Date or (ii) is entered
into after the Closing Date if such counterparty is the Administrative Agent, a
Lender or an Affiliate of the Administrative Agent or a Lender at the time such
Hedging Agreement is entered into, (e) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (f) the successors and assigns of each of the foregoing.


 


Pursuant to the requirements of the Credit
Agreement, the Mortgagor is granting this Mortgage to create a lien on and a
security interest in the Mortgaged Property (as hereinafter defined) to secure
the performance and payment by the Mortgagor of the Obligations. The Credit
Agreement also requires the granting by other Loan Parties of mortgages, deeds
of trust and/or deeds to secure debt (the “Other Mortgages”) that create liens
on and security interests in certain real and personal property other than the
Mortgaged Property to secure the performance of the Obligations.


 


Granting Clauses


 


NOW,
THEREFORE, IN CONSIDERATION OF the foregoing and in order to secure the due and
punctual payment and performance of the Obligations for the benefit of the
Secured Parties, Mortgagor hereby grants, conveys, mortgages, assigns and
pledges to the Mortgagee, a mortgage lien on and a security interest in, all
the following described property (the “Mortgaged Property”) whether now owned
or held or hereafter acquired:


 


(1)     the
land more particularly described on Exhibit A hereto (the “Land”),
together with all rights appurtenant thereto, including the easements over
certain other adjoining land granted by any easement agreements, covenant or
restrictive agreements and all air rights, mineral rights, water rights, oil
and gas rights and development rights, if any, relating thereto, and also
together with all of the other easements, rights, privileges, interests,
hereditaments and appurtenances thereunto belonging or in any way appertaining
and all of the estate, right, title, interest, claim or demand whatsoever of
Mortgagor therein and in the streets and ways adjacent thereto, either in law
or in equity, in possession or expectancy, now or hereafter acquired (the
“Premises”);


 


(2)     all
buildings, improvements, structures, paving, parking areas, walkways and
landscaping now or hereafter erected or located upon the Land, and all fixtures
of every kind and type affixed to the Premises or attached to or forming part
of any


 


3

















 


structures,
buildings or improvements and replacements thereof now or hereafter erected or
located upon the Land (the “Improvements”);


 


(3)     all
apparatus, movable appliances, building materials, equipment, fittings,
furnishings, furniture, machinery and other articles of tangible personal
property of every kind and nature, and replacements thereof, now or at any time
hereafter placed upon or used in any way in connection with the use, enjoyment,
occupancy or operation of the Improvements or the Premises, including all of
Mortgagor’s books and records relating thereto and including all pumps, tanks,
goods, machinery, tools, equipment, lifts (including fire sprinklers and alarm
systems, fire prevention or control systems, cleaning rigs, air conditioning,
heating, boilers, refrigerating, electronic monitoring, water, loading,
unloading, lighting, power, sanitation, waste removal, entertainment,
communications, computers, recreational, window or structural, maintenance,
truck or car repair and all other equipment of every kind), restaurant, bar and
all other indoor or outdoor furniture (including tables, chairs, booths,
serving stands, planters, desks, sofas, racks, shelves, lockers and cabinets),
bar equipment, glasses, cutlery, uniforms, linens, memorabilia and other
decorative items, furnishings, appliances, supplies, inventory, rugs, carpets
and other floor coverings, draperies, drapery rods and brackets, awnings,
venetian blinds, partitions, chandeliers and other lighting fixtures, freezers,
refrigerators, walk-in coolers, signs (indoor and outdoor), computer systems,
cash registers and inventory control systems, and all other apparatus,
equipment, furniture, furnishings, and articles used in connection with the use
or operation of the Improvements or the Premises, it being understood that the
enumeration of any specific articles of property shall in no way result in or
be held to exclude any items of property not specifically mentioned (the
property referred to in this subparagraph (3), the “Personal Property”);


 


(4)     all
general intangibles owned by Mortgagor and relating to design, development,
operation, management and use of the Premises or the Improvements, all
certificates of occupancy, zoning variances, building, use or other permits,
approvals, authorizations and consents obtained from and all materials prepared
for filing or filed with any governmental agency in connection with the
development, use, operation or management of the Premises and Improvements, all
construction, service, engineering, consulting, leasing, architectural and
other similar contracts concerning the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements, all
architectural drawings, plans, specifications, soil tests, feasibility studies,
appraisals, environmental studies, engineering reports and similar materials
relating to any portion of or all of the Premises and Improvements, and all
payment and performance bonds or warranties or guarantees relating to the
Premises or the Improvements, all to the extent assignable (the “Permits, Plans
and Warranties”);


 


(5)     all
now or hereafter existing leases or licenses (under which Mortgagor is landlord
or licensor) and subleases (under which Mortgagor is sublandlord), concession,
management, mineral or other agreements of a similar kind that permit the use
or occupancy of the Premises or the Improvements for any purpose in return for
any payment, or the extraction or taking of any gas, oil, water or other
minerals


 


4

















 


from
the Premises in return for payment of any fee, rent or royalty (collectively,
“Leases”), and all agreements or contracts for the sale or other disposition of
all or any part of the Premises or the Improvements, now or hereafter entered
into by Mortgagor, together with all charges, fees, income, issues, profits,
receipts, rents, revenues or royalties payable thereunder (“Rents”);


 


(6)     all
real estate tax refunds and all proceeds of the conversion, voluntary or
involuntary, of any of the Mortgaged Property into cash or liquidated claims
(“Proceeds”), including Proceeds of insurance maintained by the Mortgagor and
condemnation awards, any awards that may become due by reason of the taking by
eminent domain or any transfer in lieu thereof of the whole or any part of the
Premises or Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or hereafter
on deposit for the payment of real estate taxes, assessments or common area
charges levied against the Mortgaged Property, unearned premiums on policies of
fire and other insurance maintained by the Mortgagor covering any interest in
the Mortgaged Property or required by the Credit Agreement; and


 


(7)     all
extensions, improvements, betterments, renewals, substitutes and replacements
of and all additions and appurtenances to, the Land, the Premises, the
Improvements, the Personal Property, the Permits, Plans and Warranties and the
Leases, hereinafter acquired by or released to the Mortgagor or constructed,
assembled or placed by the Mortgagor on the Land, the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case, without any further
mortgage, deed of trust, conveyance, assignment or other act by the Mortgagor,
all of which shall become subject to the lien of this Mortgage as fully and
completely, and with the same effect, as though now owned by the Mortgagor and
specifically described herein.


 


TO
HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its successors and
assigns, for the ratable benefit of the Secured Parties, forever, subject only
to the applicable permitted Liens set forth in Section 6.02 of the Credit
Agreement and to satisfaction and release as provided in Section 3.04 of
this Mortgage.


 


ARTICLE I


 


Representations, Warranties and Covenants of Mortgagor


 


Mortgagor
agrees, covenants, represents and/or warrants as follows:


 


SECTION 1.01.
Title, Mortgage Lien.  (a) Mortgagor has good and marketable fee
simple title to the Mortgaged Property, subject only to the applicable
permitted Liens set forth in Section 6.02 of the Credit Agreement.


 


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(b)   The execution and delivery
of this Mortgage is within Mortgagor’s corporate powers and has been duly
authorized by all necessary corporate and, if required, stockholder action.
This Mortgage has been duly executed and delivered by Mortgagor and constitutes
a legal, valid and binding obligation of Mortgagor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.


 


(c)   The execution, delivery and
recordation of this Mortgage (i) do not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect and except filings necessary to perfect the lien of this Mortgage,
(ii) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of Mortgagor or any order of any
Governmental Authority, (iii) will not violate or result in a default
under any indenture, agreement or other instrument binding upon Mortgagor or
its assets, or give rise to a right thereunder to require any payment to be
made by Mortgagor, and (iv) will not result in the creation or imposition
of any Lien on any asset of Mortgagor, except the lien of this Mortgage.


 


(d)   This Mortgage and the
Uniform Commercial Code Financing Statements described in Section 1.09 of
this Mortgage, when duly recorded in the public records identified in the
Perfection Certificate will create a valid, perfected and enforceable lien upon
and security interest in all of the Mortgaged Property.


 


(e)   Mortgagor will forever
warrant and defend its title to the Mortgaged Property, the rights of Mortgagee
therein under this Mortgage and the validity and priority of the lien of this
Mortgage thereon against the claims of all persons and parties except those
having rights under the applicable permitted Liens set forth in
Section 6.02 of the Credit Agreement to the extent of those rights.


 


SECTION 1.02. Credit Agreement.  This Mortgage is given pursuant to the Credit
Agreement. Mortgagor expressly covenants and agrees to pay when due, and to
timely perform, and to cause the other Loan Parties to pay when due, and to
timely perform, the Obligations in accordance with the terms of the Loan
Documents.


 


SECTION 1.03.
Payment of Taxes, and Other Obligations.  (a) Mortgagor will pay and discharge from
time to time prior to the time when the same shall become delinquent, and
before any interest or penalty accrues thereon or attaches thereto, all Taxes
and other obligations with respect to the Mortgaged Property or any part
thereof or upon the Rents from the Mortgaged Property or arising in respect of
the occupancy, use or possession thereof in accordance with, and to the extent
required by, the Credit Agreement.


 


(b)   In the event of the passage
of any state, Federal, municipal or other governmental law, order, rule or
regulation subsequent to the date hereof (i) deducting
from the value of real property for the purpose of taxation any lien or
encumbrance thereon or in any manner changing or modifying the laws now in
force governing the taxation of this Mortgage or debts secured by mortgages or
deeds of trust (other than laws governing income, franchise


 


6

















 


and
similar taxes generally) or the manner of collecting taxes thereon and (ii) imposing
a tax to be paid by Mortgagee, either directly or indirectly, on this Mortgage
or any of the Loan Documents, or requiring an amount of taxes to be withheld or
deducted therefrom, Mortgagor will promptly (i) notify Mortgagee of such
event, (ii) enter into such further instruments as Mortgagee may determine
are reasonably necessary or desirable to obligate Mortgagor to make any
additional payments necessary to put the Lenders and Secured Parties in the
same financial position they would have been if such law, order, rule or
regulation had not been passed and (iii) make such additional payments to
Mortgagee for the benefit of the Lenders and Secured Parties.


 


SECTION 1.04.
Maintenance of Mortgaged Property.  Mortgagor will maintain the Improvements and
the Personal Property in the manner required by the Credit Agreement.


 


SECTION 1.05.
Insurance.  Mortgagor will keep or cause to be kept the
Improvements and Personal Property insured against such risks, and in the
manner, described in Section 4.03(k) of the Guarantee and Collateral
Agreement and shall purchase such additional insurance as may be required from
time to time pursuant to Section 5.02 of the Credit Agreement. Federal
Emergency Management Agency Standard Flood Hazard Determination Forms will be
purchased by Mortgagor for each Mortgaged Property on which Improvements are
located. If any portion of Improvements constituting part of the Mortgaged
Property is located in an area identified as a special flood hazard area by
Federal Emergency Management Agency or other applicable agency, Mortgagor will
purchase flood insurance in an amount satisfactory to Mortgagee, but in no
event less than the maximum limit of coverage available under the National
Flood Insurance Act of 1968, as amended.


 


SECTION 1.06.
Casualty Condemnation/Eminent Domain.  Mortgagor shall give Mortgagee prompt written
notice of any casualty or other damage to the Mortgaged Property or any
proceeding for the taking of the Mortgaged Property or any portion thereof or
interest therein under power of eminent domain or by condemnation or any
similar proceeding in accordance with, and to the extent required by, the
Credit Agreement. Any Net Cash Proceeds received by or on behalf of the
Mortgagor in respect of any such casualty, damage or taking shall constitute
trust funds held by the Mortgagor for the benefit of the Secured
Parties to be applied to repair, restore or replace the Mortgaged Property or,
if an Asset Sale shall occur with respect to any such Net Cash Proceeds, to be
applied in accordance with Section 2.12 of the Credit Agreement.


 


SECTION 1.07.
Assignment of Leases and Rents.  (a) Mortgagor hereby irrevocably and
absolutely grants, transfers and assigns all of its right title and interest in
all Leases, together with any and all extensions and renewals thereof for
purposes of securing and discharging the performance by Mortgagor of the
Obligations. Mortgagor has not assigned or executed any assignment of, and will
not assign or execute any assignment of, any Leases or the Rents payable
thereunder to anyone other than Mortgagee.


 


(b)   All Leases shall be
subordinate to the lien of this Mortgage. Mortgagor will not enter into, modify
or amend any Lease if such Lease, as entered into, modified
or amended, will not be subordinate to the lien of this Mortgage.


 


7

















 


(c)   Subject to Section 1.07(d),
Mortgagor has assigned and transferred to Mortgagee all of Mortgagor’s right,
title and interest in and to the Rents now or hereafter arising from each Lease
heretofore or hereafter made or agreed to by Mortgagor, it being intended that
this assignment establish, subject to Section 1.07(d), an absolute
transfer and assignment of all Rents and all Leases to Mortgagee and not merely
to grant a security interest therein. Subject to Section 1.07(d),
Mortgagee may in Mortgagor’s name and stead (with or without first taking
possession of any of the Mortgaged Property personally or by receiver as
provided herein) operate the Mortgaged Property and rent, lease or let all or
any portion of any of the Mortgaged Property to any party or parties at such
rental and upon such terms as Mortgagee shall, in its sole discretion,
determine, and may collect and have the benefit of all of said Rents arising
from or accruing at any time thereafter or that may thereafter become due under
any Lease.


 


(d)   So long as an Event of
Default shall not have occurred and be continuing, Mortgagee will not exercise
any of its rights under Section 1.07(c), and Mortgagor shall receive and
collect the Rents accruing under any Lease; but after the happening and during
the continuance of any Event of Default, Mortgagee may, at its option, receive
and collect all Rents and enter upon the Premises and Improvements through its
officers, agents, employees or attorneys for such purpose and for the operation
and maintenance thereof. Mortgagor hereby irrevocably authorizes and directs
each tenant, if any, and each successor, if any, to the interest of any tenant
under any Lease, respectively, to rely upon any notice of a claimed Event of
Default sent by Mortgagee to any such tenant or any of such tenant’s successors
in interest, and thereafter to pay Rents to Mortgagee without any obligation or
right to inquire as to whether an Event of Default actually exists and even if
some notice to the contrary is received from the Mortgagor, who shall have no
right or claim against any such tenant or successor in interest for any such
Rents so paid to Mortgagee. Each tenant or any of such tenant’s successors in
interest from whom Mortgagee or any officer, agent, attorney or employee of
Mortgagee shall have collected any Rents, shall be authorized to pay Rents to
Mortgagor only after such tenant or any of their successors in interest shall
have received written notice from Mortgagee that the Event of Default is no
longer continuing, unless and until a further notice of an Event of Default is
given by Mortgagee to such tenant or any of its successors in interest.


 


(e)   Mortgagee will not become a
mortgagee in possession so long as it does not enter or take actual possession
of the Mortgaged Property. In addition, Mortgagee shall not be responsible or
liable for performing any of the obligations of the landlord under any Lease,
for any waste by any tenant, or others, for any dangerous or defective
conditions of any of the Mortgaged Property, for negligence in the management,
upkeep, repair or control of any of the Mortgaged Property or any other act or
omission by any other person.


 


(f)    Mortgagor shall furnish to
Mortgagee, within 30 days after a request by Mortgagee to do so, a written
statement containing the names of all tenants, subtenants and concessionaires
of the Premises or Improvements, the terms of any Lease, the space occupied and
the rentals and/or other amounts payable thereunder.


 


SECTION 1.08.
Restrictions on Transfers and Encumbrances.  Mortgagor shall not directly or indirectly
sell, convey, alienate, assign, lease, sublease, license, mortgage, pledge,


 


8

















 


encumber
or otherwise transfer, create, consent to or suffer the creation of any lien,
charge or other form of encumbrance upon any interest in or any part of the
Mortgaged Property, or be divested of its title to the Mortgaged Property or
any interest therein in any manner or way, whether voluntarily or involuntarily
(other than resulting from a condemnation), or engage in any common,
cooperative, joint, time-sharing or other congregate ownership of all or part
thereof, except in each case in accordance with and to the extent permitted by
the Credit Agreement; provided, that Mortgagor may, in the ordinary course of business and in
accordance with reasonable commercial standards, enter into easement or
covenant agreements that relate to and/or benefit the operation of the
Mortgaged Property and that do not materially and adversely affect the value,
use or operation of the Mortgaged Property. If any of the foregoing transfers
or encumbrances results in an Asset Sale, any Net Cash Proceeds received by or
on behalf of the Mortgagor in respect thereof shall constitute trust funds to
be held by the Mortgagor for the benefit of the Secured Parties and applied in
accordance with Section 2.12 of the Credit Agreement.


 


SECTION 1.09.
Security Agreement.  This Mortgage is both a mortgage of real
property and a grant of a security interest in personal property, and shall
constitute and serve as a “Security Agreement” within the meaning of the
uniform commercial code as adopted in the state wherein the Premises are
located (“UCC”). Mortgagor has hereby granted unto Mortgagee a security
interest in and to all the Mortgaged Property described in this Mortgage that
is not real property, and simultaneously with the recording of this Mortgage,
Mortgagor has filed or will file UCC financing statements, and will file
continuation statements prior to the lapse thereof, at the appropriate offices
in the jurisdiction of formation of the Mortgagor to perfect the security
interest granted by this Mortgage in all the Mortgaged Property that is not
real property. Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in
any and all capacities, to execute any document and to file the same in the
appropriate offices (to the extent it may lawfully do so), and to perform each
and every act and thing reasonably requisite and necessary to be done to
perfect the security interest contemplated by the preceding sentence. Mortgagee
shall have all rights with respect to the part of the Mortgaged Property that
is the subject of a security interest afforded by the UCC in addition to, but
not in limitation of, the other rights afforded Mortgagee hereunder and under
the Guarantee and Collateral Agreement.


 


SECTION 1.10.
Filing and Recording.  Mortgagor will cause this Mortgage, the UCC
financing statements referred to in Section 1.09, any other security
instrument creating a security interest in or evidencing the lien hereof upon
the Mortgaged Property and each UCC continuation statement and instrument of
further assurance to be filed, registered or recorded and, if necessary,
refiled, rerecorded and reregistered, in such manner and in such places as may
be required by any present or future law in order to publish notice of and
fully to perfect the lien hereof upon, and the security interest of Mortgagee
in, the Mortgaged Property until this Mortgage is terminated and released in
full in accordance with Section 3.04 hereof. Mortgagor will pay all
filing, registration and recording fees, all Federal, state, county and
municipal recording, documentary or intangible taxes and other taxes, duties,
imposts, assessments and charges, and all reasonable expenses incidental to or
arising out of or in connection with the execution, delivery and recording of
this Mortgage, UCC continuation statements any mortgage supplemental hereto,
any security instrument with


 


9














 


respect
to the Personal Property, Permits, Plans and Warranties and Proceeds or any
instrument of further assurance.


 


SECTION 1.11.
Further Assurances. Upon demand by Mortgagee,
Mortgagor will, at the cost of Mortgagor and without expense to Mortgagee, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment, transfers and assurances as
Mortgagee shall from time to time reasonably require for the better assuring,
conveying, assigning, transferring and confirming unto Mortgagee the property
and rights hereby conveyed or assigned or intended now or hereafter so to be,
or which Mortgagor may be or may hereafter become bound to convey or assign to
Mortgagee, or for carrying out the intention or facilitating the performance of
the terms of this Mortgage, or for filing, registering or recording this
Mortgage, and on demand, Mortgagor will also execute and deliver and hereby
appoints Mortgagee as its true and lawful attorney-in-fact and agent, for
Mortgagor and in its name, place and stead, in any and all capacities, to
execute and file to the extent it may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
requested by Mortgagee to evidence more effectively the lien hereof upon the
Personal Property and to perform each and every act and thing requisite and
necessary to be done to accomplish the same.


 


SECTION 1.12.
Additions to Mortgaged Property. All right,
title and interest of Mortgagor in and to all extensions, improvements,
betterments, renewals, substitutes and replacements of, and all additions and
appurtenances to, the Mortgaged Property hereafter acquired by or released to
Mortgagor or constructed, assembled or placed by Mortgagor upon the Premises or
the Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further mortgage,
conveyance, assignment or other act by Mortgagor, shall become subject to the
lien and security interest of this Mortgage as fully and completely and with
the same effect as though now owned by Mortgagor and specifically described in
the grant of the Mortgaged Property above, but at any and all times Mortgagor
will execute and deliver to Mortgagee any and all such further assurances,
mortgages, conveyances or assignments thereof as Mortgagee may reasonably
require for the purpose of expressly and specifically subjecting the same to
the lien and security interest of this Mortgage.


 


SECTION 1.13.
No Claims Against Mortgagee. Nothing contained in this Mortgage shall
constitute any consent or request by Mortgagee, express or implied, for the
performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof, nor as
giving Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof.


 


SECTION 1.14.
Fixture Filing. (a) Certain portions
of the Mortgaged Property are or will become “fixtures” (as that term is
defined in the UCC) on the Land, and this Mortgage, upon being filed for record
in the real estate records of the county wherein such fixtures are situated,
shall operate also as a financing statement filed as a fixture filing in


 


10

















 


accordance
with the applicable provisions of said UCC upon such portions of the Mortgaged
Property that are or become fixtures.


 


(b)   The real property to which
the fixtures relate is described in Exhibit A attached hereto. The record
owner of the real property described in Exhibit A attached hereto is
Mortgagor. The name, type of organization and jurisdiction of organization of
the debtor for purposes of this financing statement are the name, type of
organization and jurisdiction of organization of the Mortgagor set forth in the
first paragraph of this Mortgage, and the name of the secured party for
purposes of this financing statement is the name of the Mortgagee set forth in
the first paragraph of this Mortgage. The mailing address of the
Mortgagor/debtor is the address of the Mortgagor set forth in the first
paragraph of this Mortgage. The mailing address of the Mortgagee/secured party
from which information concerning the security interest hereunder may be
obtained is the address of the Mortgagee set forth in the first paragraph of
this Mortgage. Mortgagor’s organizational identification number is 2576119.


 


ARTICLE II




Defaults and Remedies


 


SECTION 2.01.
Events of Default. Any Event of Default under the Credit
Agreement (as such term is defined therein) shall constitute an Event of
Default under this Mortgage.


 


SECTION 2.02.
Demand for Payment. If an Event of Default shall occur and be
continuing, then, upon written demand of Mortgagee, Mortgagor will pay to
Mortgagee all amounts due hereunder and under the Credit Agreement and the
Guarantee and Collateral Agreement and such further amount as shall be
sufficient to cover the costs and expenses of collection, including attorneys’
fees, disbursements and expenses incurred by Mortgagee, and Mortgagee shall be
entitled and empowered to institute an action or proceedings at law or in
equity for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against Mortgagor and to collect, in any manner provided by
law, all moneys adjudged or decreed to be payable.


 


SECTION 2.03.
Rights To Take Possession, Operate and Apply Revenues. (a) If an
Event of Default shall occur and be continuing, Mortgagor shall, upon
demand of Mortgagee, forthwith surrender to Mortgagee actual possession of the
Mortgaged Property and, if and to the extent not prohibited by applicable law,
Mortgagee itself, or by such officers or agents as it may appoint, may then
enter and take possession of all the Mortgaged Property without the appointment
of a receiver or an application therefor, exclude Mortgagor and its agents and
employees wholly therefrom, and have access to the books, papers and accounts
of Mortgagor.


 


(b)   If Mortgagor shall for any
reason fail to surrender or deliver the Mortgaged Property or any part thereof
after such demand by Mortgagee, Mortgagee may to the extent
not prohibited by applicable law, obtain a judgment or decree conferring upon
Mortgagee the


 


11

















 


right
to immediate possession or requiring Mortgagor to deliver immediate possession
of the Mortgaged Property to Mortgagee, to the entry of which judgment or
decree Mortgagor hereby specifically consents. Mortgagor will pay to Mortgagee,
upon demand, all reasonable expenses of obtaining such judgment or decree,
including reasonable compensation to Mortgagee’s attorneys and agents with
interest thereon at the rate per annum applicable to overdue amounts under the
Credit Agreement as provided in Section 2.07 of the Credit Agreement (the
“Interest Rate”); and all such expenses and compensation shall, until paid, be
secured by this Mortgage.


 


(c)   Upon every such entry or
taking of possession, Mortgagee may, to the extent not prohibited by applicable
law, hold, store, use, operate, manage and control the Mortgaged Property,
conduct the business thereof and, from time to time, (i) make all
necessary and proper maintenance, repairs, renewals, replacements, additions,
betterments and improvements thereto and thereon, (ii) purchase or
otherwise acquire additional fixtures, personalty and other property, (iii) insure
or keep the Mortgaged Property insured, (iv) manage and operate the Mortgaged
Property and exercise all the rights and powers of Mortgagor to the same extent
as Mortgagor could in its own name or otherwise with respect to the same, or (v) enter
into any and all agreements with respect to the exercise by others of any of
the powers herein granted Mortgagee, all as may from time to time be directed
or determined by Mortgagee to be in its best interest and Mortgagor hereby
appoints Mortgagee as its true and lawful attorney-in-fact and agent, for
Mortgagor and in its name, place and stead, in any and all capacities, to
perform any of the foregoing acts. Mortgagee may collect and receive all the
Rents, issues, profits and revenues from the Mortgaged Property, including
those past due as well as those accruing thereafter, and, after deducting (i) all
expenses of taking, holding, managing and operating the Mortgaged Property
(including compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other
similar charges as Mortgagee may at its option pay, (v) other proper
charges upon the Mortgaged Property or any part thereof and (vi) the
compensation, expenses and disbursements of the attorneys and agents of
Mortgagee, Mortgagee shall apply the remainder of the moneys and proceeds so
received first to the payment of the Mortgagee for the satisfaction of the
Obligations, and second, if there is any surplus, to Mortgagor, subject to the
entitlement of others thereto under applicable law.


 


(d)   Whenever, before any sale of
the Mortgaged Property under Section 2.06, all Obligations that are then
due shall have been paid and all Events of Default fully cured, Mortgagee will
surrender possession of the Mortgaged Property back to Mortgagor, its
successors or assigns. The same right of taking possession shall, however,
arise again if any subsequent Event of Default shall occur and be continuing.


 


SECTION 2.04.
Right To Cure Mortgagor’s Failure to Perform. Should
Mortgagor fail in the payment, performance or observance of any term, covenant or condition
required by this Mortgage or the Credit Agreement (with respect to the
Mortgaged Property), Mortgagee may pay, perform or observe the same, and all
payments made or costs or expenses incurred by Mortgagee in connection
therewith shall be secured hereby and shall be, without demand, immediately
repaid by Mortgagor to Mortgagee with interest thereon at


 


12

















 


the
Interest Rate. Mortgagee shall be the judge using reasonable discretion of the
necessity for any such actions and of the amounts to be paid. Mortgagee is
hereby empowered to enter and to authorize others to enter upon the Premises or
the Improvements or any part thereof for the purpose of performing or observing
any such defaulted term, covenant or condition without having any obligation to
so perform or observe and without thereby becoming liable to Mortgagor, to any
person in possession holding under Mortgagor or to any other person.


 


SECTION 2.05.
Right to a Receiver. If an Event of Default
shall occur and be continuing, Mortgagee, upon application to a court of
competent jurisdiction, shall be entitled as a matter of right to the
appointment of a receiver to take possession of and to operate the Mortgaged
Property and to collect and apply the Rents. The receiver shall have all of the
rights and powers permitted under the laws of the state wherein the Mortgaged
Property is located. Mortgagor shall pay to Mortgagee upon demand all
reasonable expenses, including receiver’s fees, reasonable attorney’s fees and
disbursements, costs and agent’s compensation incurred pursuant to the
provisions of this Section 2.05; and all such expenses shall be secured by
this Mortgage and shall be, without demand, immediately repaid by Mortgagor to
Mortgagee with interest thereon at the Interest Rate.


 


SECTION 2.06.
Foreclosure and Sale. (a) If an
Event of Default shall occur and be continuing, Mortgagee may elect to sell the
Mortgaged Property or any part of the Mortgaged Property by exercise of the
power of foreclosure or of sale granted to Mortgagee by applicable law or this Mortgage. In
such case, Mortgagee may commence a civil action to foreclose this Mortgage, or
it may proceed and sell the Mortgaged Property to satisfy any Obligation.
Mortgagee or an officer appointed by a judgment of foreclosure to sell the
Mortgaged Property, may sell all or such parts of the Mortgaged Property as may
be chosen by Mortgagee at the time and place of sale fixed by it in a notice of
sale, either as a whole or in separate lots, parcels or items as Mortgagee
shall deem expedient, and in such order as it may determine, at public auction
to the highest bidder. Mortgagee or an officer appointed by a judgment of
foreclosure to sell the Mortgaged Property may postpone any foreclosure or
other sale of all or any portion of the Mortgaged Property by public
announcement at such time and place of sale, and from time to time thereafter
may postpone such sale by public announcement or subsequently noticed sale.
Without further notice, Mortgagee or an officer appointed to sell the Mortgaged
Property may make such sale at the time fixed by the last postponement, or may,
in its discretion, give a new notice of sale. Any person, including Mortgagor
or Mortgagee or any designee or affiliate thereof, may purchase at such sale.


 


(b)   The Mortgaged Property may
be sold subject to unpaid taxes and the applicable permitted Liens set forth in
Section 6.02 of the Credit Agreement, and, after deducting all costs, fees
and expenses of Mortgagee (including costs of evidence of title in connection
with the sale), Mortgagee or an officer that makes any sale shall apply
the proceeds of sale in the manner set forth in Section 2.08.


 


(c)   Any foreclosure or other
sale of less than the whole of the Mortgaged Property or any defective or
irregular sale made hereunder shall not exhaust the power of foreclosure or of
sale provided for herein; and subsequent sales may be made hereunder until the
Obligations have been satisfied, or the entirety of the Mortgaged Property has
been sold.


 


13

















 


(d)   If an Event of Default shall
occur and be continuing, Mortgagee may instead of, or in addition to,
exercising the rights described in Section 2.06(a) above and either
with or without entry or taking possession as herein permitted, proceed by a
suit or suits in law or in equity or by any other appropriate proceeding or
remedy (i) to specifically enforce payment of some or all of the
Obligations, or the performance of any term, covenant, condition or agreement
of this Mortgage or any other Loan Document or any other right, or (ii) to
pursue any other remedy available to Mortgagee, all as Mortgagee shall
determine most effectual for such purposes.


 


SECTION 2.07.
Other Remedies. (a) In case an Event of Default shall
occur and be continuing, Mortgagee may also exercise, to the extent not
prohibited by law, any or all of the remedies available to a secured party
under the UCC.


 


(b)   In connection with a sale of
the Mortgaged Property or any Personal Property and the application of the
proceeds of sale as provided in Section 2.08, Mortgagee shall be entitled
to enforce payment of and to receive up to the principal amount of the
Obligations, plus all other charges, payments and costs due under this
Mortgage, and to recover a deficiency judgment for any portion of the aggregate
principal amount of the Obligations remaining unpaid, with interest.


 


SECTION 2.08.
Application of Sale Proceeds and Rents. Subject to the
Intercreditor Agreement, after any foreclosure sale of all or any of the
Mortgaged Property, Mortgagee shall receive and apply the proceeds of the sale
together with any Rents that may have been collected and any other sums that
then may be held by Mortgagee under this Mortgage as follows:


 


FIRST, to the payment of all costs and expenses incurred by the
Mortgagee, the Administrative Agent or the Collateral Agent (in their
respective capacities as such hereunder or under any other Loan Document) in
connection with such collection, sale, foreclosure or realization or otherwise
in connection with this Mortgage, any other Loan Document or any of the Obligations,
including all court costs and the fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Mortgagee, the
Administrative Agent and/or the Collateral Agent hereunder or under any other
Loan Document on behalf of Mortgagor or any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Loan Document;


 


SECOND, to the payment in full of Unfunded Advances (the amounts so
applied to be distributed between or among the Secured Parties pro rata in
accordance with the amounts of Unfunded Advances owed to them on the date of
any such distribution);


 


THIRD, to the payment in full of all other Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution);


 


14

















 


FOURTH, to the Mortgagor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.


 


The
Mortgagee shall have absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Mortgage. Upon any
sale of the Mortgaged Property by the Mortgagee (including pursuant to a power
of sale granted by statute or under a judicial proceeding), the receipt of the
Mortgagee or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Mortgaged Property so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Mortgagee or such officer or be
answerable in any way for the misapplication thereof.


 


SECTION 2.09.
Mortgagor as Tenant Holding Over. If Mortgagor remains in possession of
any of the Mortgaged Property after any foreclosure sale by Mortgagee, at
Mortgagee’s election Mortgagor shall be deemed a tenant holding over and shall
forthwith surrender possession to the purchaser or purchasers at such sale or
be summarily dispossessed or evicted according to provisions of law applicable
to tenants holding over.


 


SECTION 2.10. Waiver
of Appraisement, Valuation, Stay, Extension and Redemption Laws. Mortgagor
waives, to the extent not prohibited by law, (i) the benefit of all laws
now existing or that hereafter may be enacted (x) providing for any
appraisement or valuation of any portion of the Mortgaged Property and/or (y) in
any way extending the time for the enforcement or the collection of amounts due
under any of the Obligations or creating or extending a period of redemption
from any sale made in collecting said debt or any other amounts due Mortgagee, (ii) any
right to at any time insist upon, plead, claim or take the benefit or advantage
of any law now or hereafter in force providing for any homestead exemption,
stay, statute of limitations, extension or redemption, or sale of the Mortgaged
Property as separate tracts, units or estates or as a single parcel in the
event of foreclosure or notice of deficiency, and (iii) all rights of
redemption, valuation, appraisement, stay of execution, notice of election to
mature or declare due the whole of or each of the Obligations and marshaling in
the event of foreclosure of this Mortgage.


 


SECTION 2.11. Discontinuance
of Proceedings. In case Mortgagee shall proceed to enforce any right, power
or remedy under this Mortgage by foreclosure, entry or otherwise, and such
proceedings shall be discontinued or abandoned for any reason, or shall be
determined adversely to Mortgagee, then and in every such case Mortgagor and
Mortgagee shall be restored to their former positions and rights hereunder, and
all rights, powers and remedies of Mortgagee shall continue as if no such
proceeding had been taken.


 


SECTION 2.12. Suits To
Protect the Mortgaged Property. Mortgagee shall have power (a) to
institute and maintain suits and proceedings to prevent any impairment of the
Mortgaged Property by any acts that may be unlawful or in violation of this
Mortgage, (b) to preserve or protect its interest in the Mortgaged
Property and in the Rents arising therefrom and (c) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid
if the enforcement of or compliance with such enactment, rule or order
would impair the security or be prejudicial to the interest of Mortgagee
hereunder.


 


15

















 


SECTION 2.13.
Filing Proofs of Claim. In case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor, Mortgagee shall, to the extent permitted by
law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Mortgagee allowed in such
proceedings for the Obligations secured by this Mortgage at the date of the
institution of such proceedings and for any interest accrued, late charges and
additional interest or other amounts due or that may become due and payable
hereunder after such date.


 


SECTION 2.14.
Possession by Mortgagee. Notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor, any of its property or the
Mortgaged Property, Mortgagee shall be entitled, to the extent not prohibited
by law, to remain in possession and control of all parts of the Mortgaged
Property now or hereafter granted under this Mortgage to Mortgagee in
accordance with the terms hereof and applicable law.


 


SECTION 2.15.
Waiver. (a) No delay or failure by Mortgagee to exercise any right,
power or remedy accruing upon any breach or Event of Default shall exhaust or
impair any such right, power or remedy or be construed to be a waiver of any
such breach or Event of Default or acquiescence therein; and every right, power
and remedy given by this Mortgage to Mortgagee may be exercised from time to
time and as often as may be deemed expedient by Mortgagee. No consent or waiver
by Mortgagee to or of any breach or Event of Default by Mortgagor in the
performance of the Obligations shall be deemed or construed to be a consent or
waiver to or of any other breach or Event of Default in the performance of the
same or of any other Obligations by Mortgagor hereunder. No failure on the part
of Mortgagee to complain of any act or failure to act or to declare an Event of
Default, irrespective of how long such failure continues, shall constitute a
waiver by Mortgagee of its rights hereunder or impair any rights, powers or remedies
consequent on any future Event of Default by Mortgagor.


 


(b)   Even if Mortgagee (i) grants
some forbearance or an extension of time for the payment of any sums secured
hereby, (ii) takes other or additional security for the payment of any
sums secured hereby, (iii) waives or does not exercise some right granted
herein or under the Loan Documents, (iv) releases a part of the Mortgaged
Property from this Mortgage, (v) agrees to change some of the terms,
covenants, conditions or agreements of any of the Loan Documents, (vi) consents
to the filing of a map, plat or replat affecting the Premises, (vii) consents
to the granting of an easement or other right affecting the Premises or (viii) makes
or consents to an agreement subordinating Mortgagee’s lien on the Mortgaged
Property hereunder; no such act or omission shall preclude Mortgagee from
exercising any other right, power or privilege herein granted or intended to be
granted in the event of any breach or Event of Default then made or of any
subsequent default; nor, except as otherwise expressly provided in an
instrument executed by Mortgagee, shall this Mortgage be altered thereby. In
the event of the sale or transfer by operation of law or otherwise of all or
part of the Mortgaged Property, Mortgagee is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Mortgaged Property
secured hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.


 


16

















 


SECTION 2.16.
Waiver of Trial by Jury. To the fullest
extent permitted by applicable law, Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any
action, claim, suit or proceeding relating to this Mortgage and for any
counterclaim brought therein. Mortgagor hereby waives all rights to interpose
any counterclaim in any suit brought by Mortgagee hereunder and all rights to
have any such suit consolidated with any separate suit, action or proceeding.


 


SECTION 2.17.
Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Mortgagee by this Mortgage is intended to be exclusive of any
other right, power or remedy, and each and every such right, power and remedy
shall be cumulative and concurrent and in addition to any other right, power
and remedy given hereunder or now or hereafter existing at law or in equity or
by statute.


 


ARTICLE III




Miscellaneous


 


SECTION 3.01.
Partial Invalidity. In the event any one or
more of the provisions contained in this Mortgage shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such validity,
illegality or unenforceability shall, at the option of Mortgagee, not affect
any other provision of this Mortgage, and this Mortgage shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein or therein.


 


SECTION 3.02.
Notices. All notices and communications hereunder shall be in writing
and given to Mortgagor in accordance with the terms of the Credit Agreement at
the address set forth on the first page of this Mortgage and to the
Mortgagee as provided in the Credit Agreement.


 


SECTION 3.03.
Successors and Assigns. All of the grants, covenants, terms, provisions
and conditions herein shall run with the Premises and the Improvements and
shall apply to, bind and inure to, the benefit of the permitted successors and
assigns of Mortgagor and the successors and assigns of Mortgagee.


 


SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to
Mortgagee of the Mortgaged Property as security created and consummated by this
Mortgage shall terminate and be null and void when all the Obligations have
been indefeasibly paid in full in accordance with the terms of the Loan
Documents and the Lenders have no further commitment to lend under the Credit
Agreement.


 


(b)   Mortgagor shall automatically
be released from its obligations hereunder upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Mortgagor ceases to be a Subsidiary.


 


(c)   Upon any sale or other
transfer by Mortgagor of any Collateral that is permitted under the Credit
Agreement to any person that is not the Borrower or a Mortgagor, or, upon the
effectiveness of any written consent to the release of the Security Interest
granted hereby


 


17

















 


in
any Collateral pursuant to Section 9.08 of the Credit Agreement, the
Security Interest in such Collateral shall be automatically released.


 


(d)   In connection with any
termination or release pursuant to paragraph (a), (b) or (c) above,
the Mortgagee shall promptly execute and deliver to Mortgagor at such
Mortgagor’s expense, all Uniform Commercial Code termination statements and
similar documents that such Mortgagor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to
this Section shall be without recourse to or representation or warranty by
the Mortgagee or any Secured Party. Without limiting the provisions of Section 7.06
of the Guarantee and Collateral Agreement, the Borrower shall reimburse the
Mortgagee upon demand for all costs and out of pocket expenses, including the
fees, charges and expenses of counsel, incurred by it in connection with any
action contemplated by this Section.


 


SECTION 3.05. Definitions. As used in
this Mortgage, the singular shall include the plural as the context requires
and the following words and phrases shall have the following meanings: (a) “including”
shall mean “including but not limited to”; (b) “provisions” shall mean
“provisions, terms, covenants and/or conditions”; (c) “lien” shall mean
“lien, charge, encumbrance, security interest, mortgage or deed of trust”; (d) “obligation”
shall mean “obligation, duty, covenant and/or condition”; and (e) “any of
the Mortgaged Property” shall mean “the Mortgaged Property or any part thereof
or interest therein”. Any act that Mortgagee is permitted to perform hereunder
may be performed at any time and from time to time by Mortgagee or any person
or entity designated by Mortgagee. Any act that is prohibited to Mortgagor
hereunder is also prohibited to all lessees of any of the Mortgaged Property.
Each appointment of Mortgagee as attorney-in-fact for Mortgagor under the
Mortgage is irrevocable, with power of substitution and coupled with an
interest. Subject to the applicable provisions hereof, Mortgagee has the right
to refuse to grant its consent, approval or acceptance or to indicate its
satisfaction, in its sole discretion, whenever such consent, approval,
acceptance or satisfaction is required hereunder.


 


SECTION 3.06. Multisite Real Estate
Transaction. Mortgagor acknowledges that this Mortgage is one of
a number of Other Mortgages and Security Documents that secure the Obligations.
Mortgagor agrees that the lien of this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts
or omissions whatsoever of Mortgagee, and without limiting the generality of
the foregoing, the lien hereof shall not be impaired by any acceptance by the
Mortgagee of any security for or guarantees of any of the Obligations hereby
secured, or by any failure, neglect or omission on the part of Mortgagee to
realize upon or protect any Obligation or indebtedness hereby secured or any
collateral security therefor including the Other Mortgages and other Security
Documents. The lien hereof shall not in any manner be impaired or affected by
any release  (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations secured or of any of the
collateral security therefor, including the Other Mortgages and other Security
Documents or of any guarantee thereof, and Mortgagee may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy available
to it under any or all of the Other Mortgages and other Security Documents
without first exercising or enforcing any of its rights and remedies hereunder.
Such exercise of


 


18

















 


Mortgagee’s
rights and remedies under any or all of the Other Mortgages and other Security
Documents shall not in any manner impair the indebtedness hereby secured or the
lien of this Mortgage and any exercise of the rights or remedies of Mortgagee
hereunder shall not impair the lien of any of the Other Mortgages and other
Security Documents or any of Mortgagee’s rights and remedies thereunder.
Mortgagor specifically consents and agrees that Mortgagee may exercise its
rights and remedies hereunder and under the Other Mortgages and other Security
Documents separately or concurrently and in any order that it may deem
appropriate and waives any rights of subrogation.


 


SECTION 3.07. No Oral Modification. This Mortgage
may not be changed or terminated orally. Any agreement made by Mortgagor and
Mortgagee after the date of this Mortgage relating to this Mortgage shall be
superior to the rights of the holder of any intervening or subordinate
Mortgage, lien or encumbrance.


 


ARTICLE IV




Particular Provisions


 


This Mortgage is subject to the following provisions relating to the
particular laws of the state wherein the Premises are located:


 


SECTION 4.01. Applicable Law; Certain
Particular Provisions. This Mortgage shall be governed by and
construed in accordance with the internal law of the state where the Mortgaged
Property is located, except that Mortgagor expressly acknowledges that by their
terms, the Credit Agreement and other Loan Documents (aside from those Other
Mortgages to be recorded outside New York) shall be governed by the internal
law of the State of New York, without regard to principles of conflict of law.
Mortgagor and Mortgagee agree to submit to jurisdiction and the laying of venue
for any suit on this Mortgage in the state where the Mortgaged Property is
located.


 


SECTION 4.02. Open-End Mortgage. This Mortgage
is an “Open-End Mortgage” within the meaning of Connecticut General Statutes
§49-2(c), and the holder hereof shall have all of the rights, powers and
protections to which the holder of any such Open-End Mortgage is entitled under
Connecticut law. The full amount of the Loans is $75,000,000 to be advanced and
fully funded on the date hereof. The maximum term (“Maturity Date”) of the
Loans is December 15, 2014.


 


SECTION 4.03. Prejudgment Remedy Waiver. The Mortgagor
represents, warrants and acknowledges that the transaction of which this
Mortgage is a part is a commercial transaction and not a consumer transaction.
Monies now or in the future to be advanced to or on behalf of Mortgagor are not
and will not be used for personal, family or household purposes. MORTGAGOR
ACKNOWLEDGES THAT IT HAS THE RIGHT UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, SUBJECT TO CERTAIN LIMITATIONS, TO NOTICE OF AND HEARING ON
THE RIGHT OF THE MORTGAGEE TO OBTAIN A PREJUDGEMENT REMEDY, SUCH AS ATTACHMENT,
GARNISHEMENT OR REPLEVIN, UPON COMMENCING ANY LITIGATION


 


19














 


AGAINST MORTGAGOR. NOTWITHSTANDING SUCH RIGHT, MORTGAGOR
HEREBY WAIVES ALL RIGHTS TO NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER TO
WHICH IT MIGHT OTHERWISE HAVE THE RIGHT UNDER SAID STATUTE OR UNDER ANY OTHER
STATE OR FEDERAL STATUTE OR CONSTITUTION IN CONNECTION WITH THE OBTAINING BY
MORTGAGEE OF ANY PREJUDGMENT REMEDY IN CONNECTION WITH THIS MORTGAGE. MORTGAGOR
FURTHER CONSENTS TO THE ISSUANCE OF ANY  PREJUDGEMENT
REMEDIES WITHOUT A BOND. NOTWITHSTANDING THE FOREGOING WAIVER, NOTHING HEREIN
SHALL BE DEEMED TO WAIVE ANY RIGHTS WHICH MORTGAGOR MAY HAVE WITH RESPECT
TO ANY PROCEEDINGS WHICH MAY BE PERMITTED BY LAW FOLLOWING THE GRANTING OF
SUCH PREJUDGMENT REMEDY.


 


SECTION 4.04. Loans Subject to Variable
Interest Rate. The Loans secured by this Mortgage are variable interest
rate loans as more particularly described in the Credit Agreement, but changes
in the interest rate will not affect the maximum term of such Loans or the
maturity date of such Loans as set forth in Section 4.02, above.


 


SECTION 4.05. Statutory Condition. This
Mortgage is made and given upon THE STATUTORY CONDITION. If the Obligations
have been indefeasibly paid in full in accordance with the terms of the Loan
Documents, if all of the covenants and agreements of the Mortgagor under this Mortgage,
the Credit Agreement and the Loan Documents shall be fully and faithfully paid,
performed, observed and complied with, in accordance with their terms and if
the Lenders have no further commitment to lend under the Credit Agreement, then
this Mortgage shall be absolutely void; otherwise the same shall remain in full
force and effect.


 


SECTION 4.06. Intercreditor Agreement.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST
GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES,
PURSUANT TO THIS MORTGAGE AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE
COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS
MORTGAGE, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.


 


20

















 


IN
WITNESS WHEREOF, this Mortgage has been duly executed and delivered to
Mortgagee by Mortgagor on the date of the acknowledgment attached hereto.


 


	
  WITNESSES:

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES, INC., a Delaware corporation,

  
	
   

  	
   

  
	
  /s/
  Kris Villarreal

  	
   

  	
  by:

  
	
  Printed
  Name: Kris Villarreal

  	
  /s/
  Barry A. Morris

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  /s/
  Kristin Blazewicz

  	
   

  	
   

  
	
  Printed
  Name: Kristin Blazewicz

  	
   

  



 


21

















 


	
  STATE
  OF NEW YORK

  	
  )

  	
   

  
	
   

  	
   

  	
  )
  ss

  	
  June 15, 2007

  
	
  COUNTY
  OF NEW YORK

  	
  )

  	
   

  
				



 


On this the 15 day of June, 2007, before me, Ercy Castro, the undersigned
officer, personally appeared Barry A. Morris, who acknowledged
himself/herself to be the
                                         of
SPECIALIZED TECHNOLOGY RESOURCES, INC., a Delaware corporation, and that
he/she, as such                              ,
being authorized to do so, executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by himself/herself as
such                                                  .


 


In
Witness Whereof I hereunto set my hand.


 


	
   

  	
  /s/
  Ercy Castro

  
	
   

  	
  Name:
  Ercy Castro

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires: 10/23/2010.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ERCY CASTRO

  Notary Public, State of New York

  No. 01CA6155025

  Qualified in Kings County

  Commission Expires Oct. 23, 2010

  



 


22

















 


Exhibit A 

to Mortgage


 


Description of the Land


 


That
certain piece or parcel of land on the south side of Hazard Avenue (Route 190)
in the Town of Enfield, County of Hartford and State of Connecticut, shown as
“Parcel A” on Sheet 1 of 2 on a map or plan entitled: “Prepared for Springborn
Laboratories, Inc. Hazard Avenue & Abbe Road, Enfield, Conn. . .
Scale: 1 in. = 100 ft. Date: June 30, 1987. . . Rev. 2-24-88. . . Alford
Associates, Inc. Civil Engineers, Windsor, Connecticut,” which map or plan
is on file with the Enfield Town Clerk in Map Volume 220, Page 3033, and
more particularly bounded and described as follows:


 


Beginning
at a point on the south side of Hazard Avenue, which point is the northwest
corner of the herein described premises and the northeast corner of land now or
formerly of Raymond F. and Suzanne Aquilio, as shown on said map; running
thence along the arc of a curve to the right having a radius of 933.00 feet and
a delta angle of 9° 34' 03" a distance of
155.79 feet to a CHD marker; running thence N 83° 19' 04" E a distance
of 414.00 feet to a CHD monument; running thence N 82° 58' 24" E a distance
of 143.64 feet to a point, the last three (3) courses running along the
south side of Hazard Avenue; running thence S 09° 53' 12" E a distance
of 435.66 feet along land now or formerly of National Railroad Passenger
Corporation as shown on said map; running thence S 89° 20' 43" W a distance
of 143.38 feet to a point; S 64° 08' 57" W a distance
of 9.72 feet to a point; S 00° 09' 17" W a distance
of 14.24 feet to a point; S 89° 08' 16" W a distance
of 51.12 feet to a point; S 86° 57' 00" W a distance
of 105.15 feet to a point; N 89° 55' 46" W a distance
of 384.08 feet to a point; S 79° 44' 15" W a distance
of 139.61 feet to a set iron pin; N 69° 59' 38" W a distance
of 129.11 feet to a set iron pin, the last eight (8) courses being along the
Scantic River as shown on said map; running thence N 24° 34' 57" E a distance
of 401.37 feet along land now or formerly of Thomas E. and Diane S. Eastwood,
James C. and Nancy A. Miczak and Raymond F. and Suzanne Aquilio, in part by
each, to the point or place of beginning.


 


TOGETHER
WITH an easement from the State of Connecticut to Springborn Testing &
Research, Inc. dated December 31, 1997 and recorded in Volume 1156, Page 123
of the Enfield Land Records.


 














 


EXHIBIT F-1


 


[FORM OF]


 


OPINION OF WEIL, GOTSHAL & MANGES LLP



















 


	
   

  	
   

  	
  WEIL, GOTSHAL & MANGES LLP

  	
   

  	
   

  
	
   

  	
   

  	
  767 FIFTH AVENUE

  	
   

  	
  AUSTIN

  
	
   

  	
   

  	
  NEW YORK, NY 10153

  	
   

  	
  BOSTON

  
	
   

  	
   

  	
  (212) 310-8000

  	
   

  	
  BRUSSELS

  
	
   

  	
   

  	
  FAX: (212) 310-8007

  	
   

  	
  BUDAPEST

  
	
   

  	
   

  	
   

  	
   

  	
  DALLAS

  
	
   

  	
   

  	
   

  	
   

  	
  FRANKFURT

  
	
   

  	
   

  	
   

  	
   

  	
  HOUSTON

  
	
   

  	
   

  	
   

  	
   

  	
  LONDON

  
	
   

  	
   

  	
   

  	
   

  	
  MIAMI

  
	
   

  	
   

  	
   

  	
   

  	
  MUNICH

  
	
   

  	
   

  	
   

  	
   

  	
  PARIS

  
	
   

  	
   

  	
   

  	
   

  	
  PRAGUE

  
	
   

  	
   

  	
   

  	
   

  	
  PROVIDENCE

  
	
  WRITER’S
  DIRECT LINE

  	
   

  	
   

  	
   

  	
  SHANGHAI

  
	
   

  	
   

  	
   

  	
   

  	
  SILICON VALLEY

  
	
   

  	
   

  	
   

  	
   

  	
  SINGAPORE

  
	
   

  	
   

  	
  June 15, 2007

  	
   

  	
  WARSAW

  
	
   

  	
   

  	
   

  	
   

  	
  WASHINGTON, D.C.

  



 


Credit
Suisse,


as
Administrative Agent and 

the Lenders party to the

Second Lien Credit Agreement


 


Ladies
and Gentlemen:


 


We
have acted as counsel to STR Acquisition, Inc., a Delaware corporation
(the “Borrower”), STR Holdings LLC, a Delaware limited liability company
(“Holdings”), Specialized Technology Resources, Inc., a Delaware
corporation (“STR”), Cal Safety Compliance Corporation, a California
corporation (“CSCC”), Specialized Technology Resources
(International), Inc., a Delaware corporation (“STR International”),
Shuster Laboratories, Inc., a Delaware corporation (“Shuster”),
Supply Chain Consulting Corporation, a Delaware corporation (“Supply Chain”),
Specialized Technology Resources (Florida), Inc., a Florida corporation (“STR
Florida”) and STR Materials Science, Inc., a Delaware corporation (“Materials”,
and together with the Borrower, Holdings, STR, CSCC, STR International,
Shuster, Supply Chain, and STR Florida, the “Loan Parties”), in
connection with the execution and delivery of, and the consummation of the
transactions contemplated by, the Second Lien Credit Agreement dated as of
June 15, 2007 (the “Credit Agreement”) among the Borrower,
Holdings, the Lenders party thereto, and Credit Suisse, as administrative agent
for the Lenders (in such capacity, the “Administrative Agent”) and as
collateral agent for the Lenders (in such capacity, the “Collateral Agent”).
This opinion is being delivered pursuant to Section 4.02(a) of the
Credit Agreement. Capitalized terms defined in the Credit Agreement and used
(but not otherwise defined) herein are used herein as so defined.


 


In
so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the following:


 


(a)           the Credit
Agreement;


 

















 


(b)           the Second Lien
Guarantee and Collateral Agreement, dated as of the date hereof (the “Collateral
Agreement”), among the Loan Parties and the Collateral Agent;


 


(c)           the Second Lien
Assignment of Distributions among STR, STR-Registrar LLC and the Collateral
Agent;


 


(d)           the Second Lien
Patent Security Agreement, dated as of the date hereof, among the Loan Parties
and the Collateral Agent;


 


(e)           the Second Lien
Trademark Security Agreement, dated as of the date hereof, among Holdings, the
Borrower and the Collateral Agent;


 


(f)            the Intercreditor
Agreement dated as of the date hereof among Holdings, the Borrower, the
Collateral Agent and Credit Suisse, as the First Lien Collateral Agent (as
defined therein);


 


(g)           the UCC-1 Financing
Statements attached as Exhibit A hereto (the “Financing
Statements”); and


 


(h)           such corporate and
limited liability company records, agreements, documents and other instruments,
and such certificates or comparable documents of public officials and of
officers and representatives of each of the Loan Parties, and have made such
inquiries of such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth. The documents set
forth in clauses (a) through (f) above shall be referred to as the “Loan
Documents.”


 


In
such examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the authenticity
of the originals of such latter documents. As to all questions of fact material
to these opinions that have not been independently established, we have relied
upon certificates or comparable documents of officers and representatives of
the Loan Parties and upon the representations and warranties of the Loan
Parties contained in the Loan Documents. As used herein, “to our knowledge” and
“of which we are aware” mean the conscious awareness of facts or other
information by any lawyer in our firm actively involved in the transactions
contemplated by the Loan Documents.


 


Based
on the foregoing, and subject to the qualifications stated herein, we are of
the opinion that:


 


1.     The Borrower is a
corporation validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and


 


2

















 


authority
to own, lease and operate its properties and to carry on its business as now
being conducted. Holdings is a limited liability company validly existing and
in good standing under the laws of the State of Delaware and has all requisite
limited liability company power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. CSCC is a
corporation validly existing and in good standing under the laws of the State
of California and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
STR Florida is a corporation validly existing and in good standing under the
laws of the State of Florida and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.


 


2.     Each of the Borrower,
Holdings, CSCC and STR Florida has all requisite corporate or limited liability
company power and authority to execute and deliver each of the Loan Documents
to which it is a party and to perform its obligations thereunder. The
execution, delivery and performance of, and the grant of security interests
pursuant to, the Loan Documents by each of the Borrower, Holdings, CSCC and STR
Florida have been duly authorized by all necessary corporate action on the part
of the Borrower, CSCC and STR Florida and all necessary limited liability
company action on the part of Holdings. Each Loan Document has been duly and
validly executed and delivered by each of the Loan Parties party thereto.
Assuming the due authorization, execution and delivery thereof by the other
parties thereto, each Loan Document constitutes the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity) and except that (A) rights
to indemnification and contribution thereunder may be limited by federal or
state securities laws or public policy relating thereto, (B) no opinion is
expressed with respect to Section 9.06 of the Credit Agreement, and
(C) certain remedial provisions of the Loan Documents are or may be
unenforceable in whole or in part under the laws of the State of New York, but
the inclusion of such provisions does not affect the validity of the Loan
Documents, and the Loan Documents contains adequate provisions for the
practical realization of the rights and benefits afforded thereby. No opinion
is expressed in this paragraph as to the attachment, perfection or priority of
any liens granted pursuant to the Loan Documents.


 


3.     The execution and delivery
by each Loan Party of the Loan Documents to which it is a party, the
performance by each Loan Party of its obligations thereunder and the grant of
security interests by each Loan Party pursuant to the Loan Documents will not
conflict with, constitute a default under or violate (i) any of the terms,
conditions or provisions of the Certificate of Incorporation or by-laws of the


 


3

















 


Borrower,
CSCC or STR Florida or the Certificate of Formation or operating agreement of
Holdings, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument to which the Borrower or Holdings is a
party of which we are aware (iii) in the case of STR Florida, Florida
corporate law, in the case of CSCC, California corporate law, in the case of
Holdings, Delaware limited liability company law, in the case of the Borrower,
Delaware corporate law, (iv) federal law or regulation (other than federal
and state securities or blue sky laws, as to which we express no opinion in
this paragraph) or (v) any judgment, writ, injunction, decree, order or
ruling of any court or governmental authority binding on the Borrower or
Holdings of which we are aware.


 


4.     No consent, approval,
waiver, license or authorization or other action by or filing with any New
York, California corporate, Florida corporate, Delaware corporate or federal
governmental authority is required in connection with the execution and
delivery by any Loan Party of the Loan Documents to which it is a party, the
consummation by such Loan Party of the transactions contemplated thereby, the
performance by such Loan Party of its obligations thereunder or the grant by
such Loan Party of the security interests under the Loan Documents, except for
(i) filings in connection with perfecting security interests, and federal
and state securities or blue sky laws, as to which we express no opinion in
this paragraph, (ii) those already obtained and (iii) those which
could not reasonably be expected to have a material adverse effect on the
business, assets or financial condition of the Borrower, Holdings and each of
their subsidiaries taken as a whole.


 


5.     Except as set forth in
Schedule 3.09 to the Credit Agreement, to our knowledge, there is no
litigation, proceeding or governmental investigation pending or overtly
threatened against the Borrower or Holdings that relates to any of the
transactions contemplated by the Loan Documents or which could reasonably be
expected to have a material adverse effect on the business, assets or financial
condition of the Borrower, Holdings and each of their subsidiaries taken as a
whole or on the ability of the Borrower to perform it obligations under the
Loan Documents.


 


6.     No Loan Party is an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.


 


7.     Assuming that the Borrower
complies with the provisions of the Credit Agreement relating to the use of
proceeds of the Loans, the execution and delivery of the Credit Agreement by
the Borrower and the making of the Loans under the Credit Agreement will not
violate Regulation T, U or X of the Board of Governors of the Federal Reserve
Board.


 


8.     (a)The execution and
delivery of the Collateral Agreement by each Loan Party creates a valid
security interest in favor of the Collateral Agent in the Article


 


4

















 


9
Collateral (as defined in the Collateral Agreement), as security for the
Obligations (as defined in the Collateral Agreement). Assuming the filing of
the Financing Statements (i) with respect to CSCC, with the Secretary of
State of the State of California, (ii) with respect to STR Florida, with
the Secretary of State of the State of Florida and (iii) with respect to
the Borrower, Holdings, STR, STR International, Shuster, Supply Chain and
Materials (collectively, the “Delaware Parties”), with the Secretary of
State of the State of Delaware, such security interest is perfected, to the extent
a security interest in the Article 9 Collateral may be perfected by the
filing of a financing statement under the Uniform Commercial Code in effect
(x) with respect to CSCC, in the State of California (the “CA UCC”),
(y) with respect to STR Florida, in the State of Florida (the “FL UCC”)
or (z) with respect to the Delaware Parties, in the State of Delaware (the
“DE UCC”).


 


(b)           The execution and
delivery of the Collateral Agreement by each Loan Party creates a valid lien on
and security interest in the Pledged Stock and Pledged Debt Securities (each as
defined in the Collateral Agreement), in favor of the Collateral Agent as
security for the Obligations (as defined in the Collateral Agreement). Assuming
(i) delivery in the State of New York to the Collateral Agent (the “Pledgee”)
of all certificates and instruments that represent the Pledged Stock and
Pledged Debt Securities, together with stock powers or note powers, as the case
may be, properly executed in blank with respect thereto, and (ii) that the
Pledgee was without notice of any adverse claim (as such phrase is defined in
Section 8-105 of the Uniform Commercial Code in effect in the State of New
York (the “NY UCC” and, together with the CA UCC, the FL UCC and the DE
UCC, the “UCC”)) with respect to the Pledged Stock and Pledged Debt
Securities, such security interest is perfected and is free of any adverse
claim.


 


(c)           The execution and
delivery by each Loan Party of the Collateral Agreement creates in favor of the
Collateral Agent a valid security interest in each Deposit Account described
therein. Upon the execution and delivery of the Webster DACA by STR, the
Collateral Agent and Webster Bank, the security interest granted to the
Collateral Agent in each Deposit Account described in the Webster DACA will be
perfected.


 


The
opinions in subparagraph (a) and, with respect to subclauses A and B
below, subparagraphs (b) and (c) are subject to the following
exceptions:


 


A.            that with respect to
rights in the Collateral of any Loan Party (as defined in the Collateral
Agreement), we express no opinion, and have assumed that such Loan Party has
rights in the Collateral;


 


B.            that with respect to
any Collateral as to which the perfection of a lien or security interest is
governed by the laws of any jurisdiction other than the State of California,
the State of Florida, the State of Delaware or the State of New York, we
express no opinion;


 


5

















 


C.            that with respect to
any Collateral which is or may become fixtures (as defined in
Section 9-102(a)(41) of the UCC) or a commercial tort claim (as defined in
Section 9-102(a)(13) of the UCC), we express no opinion; and


 


D.            that with respect to
transactions excluded from Article 9 of the UCC by Section 9-109
thereof, we express no opinion.


 


The
opinion set forth in subparagraph (b) is also subject to the following
exceptions:


 


E.             that with respect
to (i) federal tax liens accorded priority under law and (ii) liens
created under Title IV of the Employee Retirement Income Security Act of 1974
which are properly filed after the date hereof, we express no opinion as to the
relative priority of such liens and the security interests created by the
Collateral Agreement or as to whether such liens may be adverse claims; and


 


F.             that with respect
to any claim (including for taxes) in favor of any state or any of its
respective agencies, authorities, municipalities or political subdivisions
which claim is given lien status and/or priority under any law of such state,
we express no opinion as to the relative priority of such liens and the
security interests created by the Collateral Agreement or as to whether such
liens may be adverse claims.


 


In
addition, the opinions in subparagraphs (a) and (b) are subject to
(i) the limitations on perfection of security interests in proceeds
resulting from the operation of Section 9-315 of the UCC; (ii) the
limitations with respect to buyers in the ordinary course of business imposed
by Sections 9-318 and 9-320 of the UCC; (iii) the limitations with respect
to documents, instruments and securities imposed by Sections 8-302, 9-312 and
9-331 of the UCC; (iv) the provisions of Section 9-203 of the UCC
relating to the time of attachment; and (v) Section 552 of Title 11
of the United States Code (the “Bankruptcy Code”) with respect
to any Collateral acquired by any Loan Party subsequent to the commencement of
a case against or by such Loan Party under the Bankruptcy Code.


 


We
further assume that all filings will be timely made and duly filed as necessary
(i) in the event of a change in the name, identity or corporate structure
of any Loan Party, (ii) in the event of a change in the location of any
Loan Party and (iii) to continue to maintain the effectiveness of the
original filings.


 


The
opinions expressed herein are limited to the laws of the State of New York, the
corporate and limited liability company laws of the State of Delaware, the
corporate laws of the State of California, the corporate laws of the State of
Florida, Article 9 of the UCC and the federal laws of the United States,
and we express no opinion as to the effect on the matters covered by this
letter of the laws of any other jurisdiction.


 


6

















 


The
opinions expressed herein are rendered solely for your benefit in connection
with the transactions described herein. Those opinions may not be used or
relied upon by any other person, nor may this letter or any copies hereof be
furnished to a third party, filed with a governmental agency, quoted, cited or
otherwise referred to without our prior written consent, other than to bank
regulatory authorities or permitted assigns of any Lender.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Weil, Gotshal & Manges LLP

  



 


7














 


EXHIBIT F-2


 


[FORM OF]




OPINION
OF MURTHA CULLINA LLP



















 


	
  

  	
   

  	
  CITYPLACE 1

  185 ASYLUM STREET

  HARTFORD, CONNECTICUT 06103-3469

  
	
  ATTORNEYS AT LAW

  	
   

  	
  TELEPHONE (860)
  240-6000

  FACSIMILE (860) 240-6150

  www.murthalaw.com

  



 


June 15, 2007


 


Credit Suisse, As Administrative Agent and


Collateral Agent, under
the Credit Agreement, as defined below 


Eleven Madison Avenue


New York, New York 10010


 


The Lenders From Time to time party to the Credit
Agreement 


 


Ladies and Gentlemen:


 


We have acted as special
counsel to Specialized Technology Resources, Inc., a Delaware corporation
(the “Borrower”), in connection with the making of loans (the “Loans”) in the
aggregate principal amount of up to $75,000,000 to the Borrower by the Lenders
(the “Lenders”) referred to in the Second Lien Credit Agreement dated as of
June 15, 2007 (the “Credit Agreement”) by and among STR Holdings LLC, a
Delaware limited liability company, STR Acquisition, Inc., a Delaware
corporation (which substantially simultaneously with the execution of the
Credit Agreement is to be merged with and into the Borrower, with the Borrower
being the surviving entity), Credit Suisse, as administrative agent for the
Lenders (the “Administrative Agent”), Credit Suisse, as collateral agent for
the lenders (the “Collateral Agent”) and the Lenders. We have also acted as
counsel to each of (i) Specialized Technology Resources
(International), Inc., a Delaware corporation (“SII”), (ii) Shuster
Laboratories, Inc., a Delaware corporation (“SLI”), (iii) Supply
Chain Consulting Services Corp., a Delaware corporation (“SCCSC”) and
(iv) STR Materials Science, Inc., a Delaware corporation (“STRMSI”
and, together with SII, SLI and SCCSC, collectively, the “Delaware
Guarantors”).


 


The Loans are being made
pursuant to the documents listed on Exhibit A to this opinion, and
entered into by the various parties thereto (the “Documents”). This opinion is
being delivered to you pursuant to Article IV(d)(ii) of the Credit
Agreement. As used in this opinion, all capitalized terms shall have the meanings
set forth herein, or in Exhibit A hereto, or as ascribed to them in
the Documents, unless the context otherwise requires.


 


In connection with this
opinion, we have reviewed and relied upon originals or copies, certified or
otherwise authenticated to our satisfaction, of the Certificates of
Incorporation, Bylaws, and records of the corporate proceedings of the Borrower
(including the Certificate of Incorporation and By-Laws which are to be become
effective upon the merger of STR Acquisition, Inc. and the Borrower, with
the Borrower being the surviving entity) and each of the Delaware Guarantors,
certificates of public officials, executed copies of the Documents and, with 


 


BOSTON          HARTFORD          NEW
HAVEN          STAMFORD          WOBURN


 

















 


respect to factual matters only, certificates of Barry
A. Morris, Vice President, Chief Financial Officer, Treasurer and Secretary of
the Borrower, Vice President, Chief Financial Officer, Treasurer and Secretary
of SII, Vice President, Treasurer and Secretary of SLI, Vice President, Chief
Financial Officer, Treasurer and Secretary of STRMSI, Vice President, Chief
Financial Officer, and Assistant Secretary of Cal Safety Compliance Corporation
(“CSCC”) (a California corporation which is a subsidiary of the Borrower), Vice
President, Treasurer and Secretary of Specialized Technology Resources
(Florida), Inc. (“STRFI”) (a Florida corporation which is a subsidiary of
the Borrower), and a certificate of Thomas D. Vitro, Assistant Secretary of
SCCSC (all of such certificates of Barry A. Morris and Thomas D. Vitro
collectively herein called, the “Certificates”). As to the legal existence of
the Borrower, SII, SLI, SCCSC and STRMSI, we have relied solely on certificates
of the Secretary of State of the State of Delaware attached hereto as Exhibits
B, C, D, E and F. As to the qualification of the Borrower to transact
business in the State of Connecticut, we have relied solely on a certificate of
the Secretary of the State of the State of Connecticut attached hereto as Exhibit G.
As to the qualification of SLI to transact business in the Commonwealth of
Massachusetts, we have relied solely on a certificate of the Secretary of the
Commonwealth of Massachusetts attached hereto as Exhibit H. As to
the qualification of SCCSC to transact business in the State of California, we
have relied solely on a certificate of the Secretary of the State of California
attached hereto as Exhibit I. As to various questions of fact
material to our opinion, we have relied upon statements of fact (as opposed to
legal conclusions) contained in the documents we have examined or made to us by
Barry A. Morris who by reason of his positions would be expected to have
knowledge of such facts.  In addition, we
have reviewed such provisions of law as we have deemed necessary in order to
express the opinions hereinafter set forth.


 


With respect to matters
stated herein to be “to our knowledge” or words of similar import, our opinions
are limited to matters (i) within the present conscious awareness of the attorneys
at this firm who have worked on this transaction and (ii) disclosed in the
Certificates attached hereto as Exhibits J, K, L, M, N, O and P,
respectively. We have no actual knowledge of any fact or circumstance which
would lead us to believe that we are not justified in relying on such
Certificates. We have not searched the dockets of any court or agency for
litigation or proceedings against the Borrower or any of the Delaware
Guarantors.


 


We have assumed that the
documents to which the Delaware Guarantors are parties (collectively, the
“Delaware Guarantor Documents”) will not be made unenforceable against any of
the Delaware Guarantors due to lack of consideration (without investigation by
us of the nature or extent of the consideration being received by any of the
Delaware Guarantors).


 


We express no opinion as
to the laws of any jurisdiction other than the laws of the State of Connecticut
and the General Corporation Law of the State of Delaware.


 


For purposes of this
opinion, we have assumed the following:


 


2

















 


(i)           that each of the parties to the
Documents other than the Borrower and the Delaware Guarantors (each party to
any of the Documents other than the Borrower or the Delaware Guarantors herein
individually called, an “Other Party” and all of the parties to the Documents
other than the Borrower and the Delaware Guarantors herein collectively called,
the “Other Parties”) have the power under their respective charter documents to
enter into the transactions contemplated by the Documents, that such
transactions are in compliance with all laws and regulations applicable to each
of such Other Parties, and that those of the Documents to which any Other Party
is a party have been duly authorized, executed and delivered by such Other
Party or Other Parties, as the case may be, and constitute the valid and
binding obligations of such Other Party or Other Parties, as the case may be,
enforceable against such Other Party or Other Parties, as the case may be, in
accordance with their respective terms;


 


(ii)          the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies, whether certified or not;


 


(iii)         the genuineness of all signatures on
the Documents;


 


(iv)        the Borrower and each of the Delaware
Guarantors have acquired good and marketable title to, and therefore own, their
real and personal property, subject only to encumbrances which have been
disclosed to, and accepted by, the Administrative Agent, the Collateral Agent
and the Lenders;


 


(v)         the competency of each natural person
executing the Documents or related documents or certificates;


 


(vi)        the accuracy and completeness of all
representations and warranties of factual matters made by the Borrower and/or
the Delaware Guarantors in the Documents, without any independent investigation
on our part;


 


(vii)       the accuracy and completeness of all
records made available to us by the Borrower and the Delaware Guarantors;


 


(viii)      the accuracy and completeness of all
governmental records examined by us;


 


(ix)         that STR Acquisition, Inc. has
merged with and into the Borrower, with the Borrower being the surviving
entity; and


 


(x)          that the Certificate of Incorporation
and By-Laws attached hereto as Exhibits Q and R, respectively,
are the Certificate of Incorporation and By-Laws of the Borrower 


 


3

















 


in effect immediately
after the completion of the aforementioned merger of STR Acquisition, Inc. with
and into the Borrower.


 


To the extent that our
opinions herein relate to matters as to which governmental agencies have issued
certificates, or as to which certificates or affidavits have been relied upon,
such opinions speak as of the respective dates of such certificates or
affidavits.


 


Based upon and subject to
the foregoing, we are of the opinion that:


 


1.             The Borrower is a corporation
legally existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on the business of product testing and
manufacturing. SII is a corporation legally existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on the business
of a holding company. SLI is a corporation legally existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on the business of product testing. SCCSC is a corporation legally
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on the business of consulting and inspection services.
STRMSI is a corporation legally existing and in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on the business permitted in
its Certificate of Incorporation.


 


2.             The Borrower has all requisite
corporate power and authority to enter into the Documents to which it is a
party (the “Borrower Documents”) and to execute, deliver and perform its
obligations under the terms of the Borrower Documents.


 


3.             The Borrower is qualified to
transact business as a foreign corporation in the State of Connecticut.


 


4.             Each of the Delaware Guarantors has
all requisite corporate power and authority to enter into the Delaware
Guarantor Documents and to execute, deliver and perform its obligations under
the terms of the Delaware Guarantor Documents.


 


5.             SLI is qualified to transact
business as a foreign corporation, and is in good standing, in the Commonwealth
of Massachusetts.


 


6.             SCCSC is qualified to transact
business as a foreign corporation in the State of California.


 


4

















 


7.             The execution and delivery of the
Borrower Documents on behalf of the Borrower, the performance of the
obligations undertaken by it therein, and the grant of security interests by it
pursuant thereto, have been duly authorized by all necessary corporate action
on the part of the Borrower.


 


8.             The execution and delivery of the
Delaware Guarantor Documents on behalf of each of the Delaware Guarantors, the
performance of the obligations undertaken by each of the Delaware Guarantors
therein, and the grant of security interests by each of the Delaware Guarantors
thereunder have been duly authorized by all necessary corporate action on the
part of each of the Delaware Guarantors.


 


9.             The execution and delivery by the
Borrower of, the performance by the Borrower of its obligations under, and the
grant of security interests by the Borrower pursuant to the Borrower Documents
do not (a) violate any provisions of the Certificate of Incorporation or
Bylaws of the Borrower; (b) to our knowledge breach, or constitute a
default under, any existing obligation of the Borrower under any indenture,
mortgage, lease, license, franchise, agreement, judgment, decree, order, writ,
injunction or other instrument to which the Borrower is a party or by which its
property is bound; or (c) violate any provision of any statute, rule or
regulation of general application applicable to the Borrower. Specifically
excluded from this opinion, however, are any laws, rules or regulations
with respect to subdivision, zoning or other land use and development matters.


 


10.           The execution and delivery by the
Delaware Guarantors of, the performance by the Delaware Guarantors of their
obligations under, and the grant of security interests by the Delaware
Guarantors pursuant to, the Delaware Guarantor Documents do not
(a) violate any provisions of the Certificates of Incorporation or Bylaws
of the Delaware Guarantors; (b) to our knowledge, breach, or constitute a
default under, any existing obligation of any of the Delaware Guarantors under
any indenture, mortgage, lease, license, franchise, agreement, judgment,
decree, order, writ, injunction or other instrument to which any of the
Delaware Guarantors is a party or by which any property of any of the Delaware
Guarantors is bound; or (c) violate any provision of any statute,
rule or regulation of general application applicable to any of the
Delaware Guarantors. Specifically excluded from this opinion, however, are any
laws, rules or execution regulations with respect to subdivision, zoning
or other land use and development matters.


 


11.           To our knowledge, except as set forth
on Schedule 3.09 of the Credit Agreement, no judgments are outstanding against
the Borrower or any of the Delaware Guarantors, and no litigation, contested
claim or governmental proceeding is now pending or threatened by or against the
Borrower or any of the Delaware Guarantors or affecting their business or
property.


 


5

















 


12.           No authorization, approval or other
action by, and no notice to, consent of, order of or filing with, any
Connecticut State governmental authority is required to be made or obtained by
the Borrower in connection with the execution, delivery and performance by the
Borrower of the Borrower Documents or the grant by the Borrower of the security
interests under the Borrower Documents, other than (i) such reports to
United States governmental authorities regarding international capital and
foreign currency transactions as may be required pursuant to 31 C.F.R.
Part 128, (ii) those that have been made or obtained and are in full
force and effect or as to which the failure to be made or obtained or to be in
full force and should not result individually or in the aggregate, in a
material adverse effect on the Borrower and its Subsidiaries, taken as a whole,
(iii) such registrations, filings and approvals under the laws of the
State of Connecticut as may be necessary in connection with the exercise of
remedies or sale of collateral or the granting of additional security interests
or guarantees pursuant to the Documents, (iv) such registrations, filings
or approvals that are required in order to perfect or record liens and/or
security interests granted under the Documents and (v) such registrations,
filings and approvals that may be required because of the legal or regulatory
status of any Lender or because of any other facts specifically pertaining to
any Lender.


 


13.           No authorization, approval or other
action by, and no notice to, consent of, order of or filing with, any
Connecticut State governmental authority is required to be made or obtained by
any Delaware Guarantor in connection with the execution, delivery and
performance by such Delaware Guarantor of the security interests under the
Delaware Guarantor Documents, other than (i) such reports to United States
governmental authorities regarding international capital and foreign currency
transactions as may be required pursuant to 31 C.F.R. Part 128,
(ii) those that have been made or obtained and are in full force and
effect or as to which the failure to be made or obtained or to be in full force
and effect should not result, individually or in the aggregate, in a material
adverse effect on the Borrower and its Subsidiaries, taken as a whole,
(iii) such registrations, filings and approvals under the laws of the
State of Connecticut as may be necessary in connection with the exercise of
remedies or sale of collateral or the granting of additional security interests
or guarantees pursuant to the Documents, (iv) such registrations, filings
or approvals that are required in order to perfect or record liens and/or
security interests granted under the Documents and (iv) such
registrations, filings and approvals that may be required because of the legal
or regulatory status of any Lender or because of any other facts specifically
pertaining to any Lender.


 


14.           The execution and delivery by CSCC
of, the performance by CSCC of its obligations under, and the grant of security
interests by CSCC pursuant to, the Documents to which it is a party do not, to
our knowledge, breach or constitute a default under, any existing obligation of
CSCC under any indenture, mortgage, lease, license, franchise agreement,
judgment, decree, order, writ, injunction or other instrument to which CSCC is
a party or by which its property is bound.


 


6

















 


15.           The execution and delivery by STRFI
of, the performance by STRFI of its obligations under, and the grant of
security interests by STRFI pursuant to, the Documents to which it is a party
do not, to our knowledge, breach or constitute a default under, any existing
obligation of STRFI under any indenture, mortgage, lease, license, franchise
agreement, judgment, decree, order, writ, injunction or other instrument to
which STRFI is a party or by which its property is bound.


 


The foregoing is
subject to the following:


 


(a)          Our opinions are limited to only those
laws, rules and regulations that we have, in the exercise of customary
professional diligence, but without any special investigation, recognized as
generally applicable to the transactions contemplated by the Documents or to
business organizations of the same type as the Borrower and the Delaware
Guarantors. In addition, we express no opinion as to any law, rule or
regulation, the violation of which would not have a material effect on you, the
Borrower or the Delaware Guarantors.


 


(b)         No opinion is expressed herein with
respect to the enforceability of any of the Documents against any party thereto
nor with respect to the creation, perfection or priority of any lien or
security interest created by any of the Documents. We note that we have
delivered a separate legal opinion dated the date hereof to the Administrative
Agent and the Lenders addressing the enforceability of the Mortgage.


 


This opinion is rendered
only as of the date hereof. We undertake no obligation to update or supplement
this opinion to reflect any matters which may hereafter come to our attention
or any amendments to the Documents or change in law or any other matter that
may occur after the date of this opinion. This opinion is issued for the
benefit of the Administrative Agent and the other Lenders and may be relied
upon by the Administrative Agent and the Lenders and any of their successors or
assigns and participants in the Loans in connection with the transactions
contemplated by the Documents, but it may not be relied upon by any other
person or for any other purpose whatsoever, without in each such other instance
obtaining our prior written consent.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  MURTHA CULLINA LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank J. Saccomandi, III

  
	
   

  	
   

  	
  Frank J. Saccomandi, III

  
	
   

  	
   

  	
  A Partner of the Firm

  



 


7














 


	
   

  	
  CITYPLACE 1

  
	
  

  	
  185 ASYLUM STREET

  
	
  HARTFORD, CONNECTICUT 06103-3469

  
	
  ATTORNEYS AT LAW

  	
  TELEPHONE (860) 240-6000

  
	
   

  	
  FACSIMILE (860) 240-6150

  
	
   

  	
  www.murthalaw.com

  



 


June 15, 2007


 


Credit
Suisse,


as
Administrative Agent, Collateral Agent,

Issuing Bank and Swingline Lender

under the Credit Agreement referred to below

Eleven Madison Avenue


New
York, New York 10010


 


The
Lenders from time to time party to the Credit Agreement


 


Re:          Second
Lien Credit Agreement dated as of June 15, 2007 (the “Credit Agreement”),
among STR Acquisition, Inc., a Delaware corporation, which substantially
simultaneously with the execution of the Credit Agreement shall be merged with
and into Specialized Technology Resources, Inc. (the “Mortgagor”), STR
Holdings LLC, a Delaware limited liability company, the lenders from time to
time party thereto (the “Lenders”) and Credit Suisse, Administrative Agent for
the Lenders and Collateral Agent for the Secured Parties.


 


Ladies
and Gentlemen:


 


We
have acted as special Connecticut counsel to the Mortgagor in connection with
the making of the Loans by the Lenders pursuant to the Credit Agreement. The
Mortgage, as defined below, is being granted by the Mortgagor as security for
the Loans, which Loans comprise term loans in the aggregate principal amount
not to exceed $75,000,000, to be advanced and fully funded on June 15,
2007.


 


Capitalized
terms used herein, but not otherwise defined herein, shall have the meanings
ascribed to such terms in the Credit Agreement or the Mortgage. This opinion is
delivered to you, at our client’s request, pursuant to Article IV(d)(ii) of
the Credit Agreement.


 


In
connection with this opinion, we have examined:


 


	
  BOSTON

  	
  HARTFORD

  	
  NEW HAVEN

  	
  STAMFORD

  	
  WOBURN

  



 

















 


(a)                    the Credit Agreement; and


 


(b)      that certain Second Lien Open-End Mortgage,
Assignment of Leases and Rents, Security Agreement and Financing Statement,
dated as of June 15, 2007 (the “Mortgage”, and together with the Credit
Agreement, the “Documents”), granted by Mortgagor to Credit Suisse (in such
capacity, the “Mortgagee”), encumbering certain real property of Mortgagor
located at 10 Water Street, Enfield, Connecticut 06082, which Mortgage is to be
recorded in the Land Records of the Town of Enfield, Connecticut (the “Local
Recording Office”).


 


In
addition, we have made such investigation of law, as we have deemed necessary
or advisable in connection with this opinion.


 


With
respect to matters stated herein to be “to our knowledge” or words of similar import,
we have limited our opinions to matters within the actual conscious awareness
of attorneys in this firm who have rendered substantive attention to this
transaction. We have not reviewed our files or made any other investigations
with respect to matters stated herein to be “to our knowledge” or similarly
qualified.


 


For
purposes of this opinion we have assumed that:


 


(A)     each of the parties to the Documents is, and
during the terms of such Documents will remain, in compliance with the
provisions of Connecticut law governing the transaction of its business in
Connecticut;


 


(B)      the Credit Agreement constitutes the valid
and binding obligation of each party signatory thereto enforceable against such
parties in accordance with its terms;


 


(C)      the Mortgagor owns, good and indefeasible fee
simple title to, (or in the case of personal property, good and valid title to)
the property it is purported to own as described in the Mortgage;


 


(D)      the Mortgagee will only seek foreclosure of
the Mortgage with respect to all of the indebtedness secured thereby,
notwithstanding any provision which may be contained in the Documents relating
to the establishment of priority of the lien created thereby between the
parties for whose benefit such Mortgage was granted; and


 


(E)      that STR Acquisition, Inc. has merged
with and into the Mortgagor, with the Mortgagor being the surviving entity.


 


We
have also assumed: (a) the genuineness of all signatures; (b) the
competency of each natural person executing the Documents, or related
documents; and (c) that the terms and conditions of the Documents have not
been amended, modified or supplemented, directly or indirectly, by any other
agreement or understanding of the parties or by waiver of any of the material
provisions of the Documents by any of the parties to such documents.


 


2

















 


We
have not verified any of the foregoing assumptions, but we have no knowledge of
any facts which are inconsistent with those assumptions.


 


As
to various questions of fact material to our opinion, we have relied upon
statements of fact (as opposed to legal conclusions) contained in the documents
we have examined and based on our knowledge, nothing has come to our attention
that leads us to believe that we are not justified in so relying thereon.


 


Based
upon, and subject to, the foregoing, and subject also to the qualifications,
exceptions and limitations set forth below, we are of the opinion that:


 


1.             Except for filings which are necessary to
publish notice of the existence of the Mortgage as an encumbrance on the real
property described in the Mortgage, and/or to perfect the security interests
granted under the Mortgage in fixtures located, or to be located, on the real
property described in the Mortgage, no authorizations or approvals of, and no
filings with, any governmental or regulatory authority or agency of the State
of Connecticut are necessary for the execution, delivery or performance of the
Mortgage by the Mortgagor.


 


2.             The Mortgage, which by its terms is to be
governed in its entirety by the laws of the State of Connecticut, constitutes
the legal, valid and binding obligation of the Mortgagor, enforceable against
the Mortgagor in accordance with its terms.


 


3.             The execution and delivery by the Mortgagor
of the Mortgage, and the consummation of the transaction contemplated thereby,
do not conflict with, or violate, any Connecticut law, rule or regulation
applicable to the Mortgagor.


 


4.             The choice of the Connecticut law to govern
the Mortgage will be upheld and enforced by Connecticut state courts and
federal courts sitting in Connecticut. We believe that a Connecticut state
court or a federal court sitting in the Connecticut would give effect to the
choice of law provisions set forth in the Credit Agreement stipulating that the
validity, construction and enforceability of such Credit Agreement will be
governed by the laws of the State of New York, unless such court were to
determine that (x) the State of New York has no substantial relationship
to the parties to the Credit Agreement or the transactions described therein,
as applicable, or (y) the result obtained from applying the law of the
State of New York would be contrary to the public policy of the State of
Connecticut.


 


5.             The Mortgage is in proper form for recording,
and upon due recordation of the Mortgage in the Local Recording Office, the
Mortgage will create and constitute a valid, legal, binding and enforceable
lien of record in favor of the Mortgagee, for the benefit of the Lenders, on
all of the Mortgagor’s right, title and interest in the real property described
in the Mortgage (the “Real Property”). No other filing or recording, or
re-filing or re-recording, is necessary or advisable in order to publish notice
of the Mortgagee’s interest in the Real Property or to preserve the lien
created on the Mortgagor’s interest therein encumbered by the Mortgage.


 


3

















 


6.             As provided in the Mortgage, the creation,
perfection and enforcement of the security interest created by the Mortgage in
fixtures of the Mortgagor located, or to be located, on the Real Property
described in the Mortgage is governed by the laws of the State of Connecticut.
The Mortgage constitutes a valid security agreement and fixture filing and
creates a valid, legal, binding and enforceable security interest in favor of
the Mortgagee, as secured party, and against the Mortgagor, as debtor, in that
portion of the Mortgaged Property (as defined in the Mortgage) constituting
fixtures attached to the Real Property described in the Mortgage and in which a
security interest may be created under the provisions of Article 9 of the
Uniform Commercial Code as in effect in the State of Connecticut as of the date
hereof (the “UCC”). We note, however, that the definition of the term Mortgaged
Property as contained in the Mortgage is sufficiently broad to encompass both
personal property and fixtures attached to the Real Property. We further note
that the Mortgagee’s security interest in the Mortgagor’s interest in such
items of the Mortgaged Property constituting fixtures attached to the Real
Property described in the Mortgage will not “attach”, as such term is used in
the UCC, until the Mortgagor acquires rights therein or the right to transfer
its interest therein. Upon the recording of the Mortgage in the Local Recording
Office, the Mortgagee will have a perfected security interest in the Mortgagor’s
interest in those items of the Mortgaged Property which constitute fixtures
attached to the Real Property described in such Mortgage in which the Mortgagor
now has rights or the right to transfer its interest and in which a security
interest can be perfected by recording in the Local Recording Office under the
UCC. Thereafter, at such time as the Mortgagor acquires rights in, or the right
to transfer its interest in, additional items of such Mortgaged Property, the
Mortgagee shall have a perfected security interest in the Mortgagor’s interest
in that portion of such additional items of Mortgaged Property which constitute
fixtures attached to the Real Property in which a security interest may be
perfected by recording in the Local Recording Office under the UCC. Our
opinions in this numbered paragraph 6 are qualified as follows:


 


I.              Insofar as
security interests relate to proceeds, the continued perfection of such
security interests is subject to the provisions of Section 9-315 of the
UCC;


 


II.            We have assumed
that the Lenders have “given value” as that term is used in the UCC; and


 


III.           No opinion is
expressed with respect to the creation or perfection of a security interest in
any of the Mortgaged Property other than fixtures as expressly set forth above.


 


7.             To the extent the substantive laws of the
State of Connecticut (without regard to choice of law principles) were to
apply, the Loans will not violate any applicable usury laws of the State of
Connecticut or other applicable laws regulating the interest rate, fees and
other charges that may be collected with respect to the Loans. By way of
explanation, the provisions of Connecticut General Statutes § 37-4, et seq.,
constitute the laws of the State of Connecticut relating to interest charges in
excess of the lawful rate, commonly referred to as usury (“Connecticut’s Usury
Statutes”). Connecticut’s Usury Statutes contain an exemption for loans made to
foreign or domestic corporations, statutory trusts, limited liability companies
and general or limited partnerships (among other entities) involved primarily
in commercial, manufacturing, industrial or nonconsumer pursuits and provided
further that the funds received


 


4

















 


by
such entities are utilized in such entities’ business or investment activities
and are not utilized for consumer purposes and provided further that the
original indebtedness to be repaid is in excess of two hundred fifty thousand
dollars. Connecticut’s Usury Statutes also contain an exemption for bona fide
mortgages of real property for a sum in excess of five thousand dollars. Based
upon the provisions of the Documents, the transaction evidenced by the
Documents qualifies for the exemption(s) set forth above and Connecticut’s
Usury Statutes would not be applicable to such transaction.


 


8.             To the extent that the sole activity of the
Mortgagee, any Lender, or any other party to the Documents (except the
Mortgagor) in the State of Connecticut is the recording of the Mortgage against
the Real Property (as described above) or the enforcement of the Mortgage, such
activity, in and of itself, would not constitute the transaction of business
within the State of Connecticut within the purview of § 33-920 of the
Connecticut General Statutes (which constitutes the laws of the State of
Connecticut enumerating activities undertaken in the State of Connecticut by
corporations which do not constitute the transaction of business in the State
of Connecticut), and the Mortgagee or such other party would not be required
under the laws of the State of Connecticut to qualify or register as a foreign
entity in order to so accept the Mortgage or enforce the same. If it were later
determined that such qualification, registration and/or filing were required,
the validity of the Mortgage would not be affected thereby, and the Mortgagee
could thereafter seek qualification as such foreign entity, but if the
Mortgagee is not so qualified, it might be precluded from enforcing its rights
(but could, in any case defend any action) in the courts of the State of
Connecticut until such time as the Mortgagee is qualified to transact business
in the State of Connecticut. We express no opinion as to whether the Mortgagee,
any Lender or any other party to the Documents (other than the Mortgagor) has
heretofore undertaken such other activities or transacted such business or is
currently engaged in such other activities or transacting such business, as
would require Mortgagee, any such Lender, or such other party, or any of them,
to obtain a certificate of authority from the Secretary of the State of the
State of Connecticut to transact business in the State of Connecticut.


 


9.             Subject to the procedural requirements set
forth in Connecticut General Statutes §49-1 as described below and as discussed
in the exceptions to this opinion, and subject to the provisions dealing with
the obtaining of a deficiency judgment after the foreclosure of a mortgage set
forth in Connecticut General Statutes §49-14 as discussed below, the
foreclosure of the Mortgage will not restrict or impair the liabilities of the
Mortgagor (provided, however, we express no opinion herein with respect to the
Credit Agreement or any of the obligations or liabilities of any of the parties
thereunder) with respect to the Loans or the Mortgagee’s or any Lender’s rights
or remedies with respect to the foreclosure or enforcement of any other
security interests or liens securing the Loans, and the laws of the State of
Connecticut do not require a lienholder to elect to pursue its remedies either
against mortgaged realty or personalty if such lienholder holds security
interests and liens on both real and personal property of a debtor. Pursuant to
Connecticut General Statutes §49-1, once a foreclosure action on a mortgage is
commenced, no further action on the mortgage debt, note or other obligations
secured by such mortgage may be taken during the pendency of such foreclosure
action against the person or persons who are liable for the payment thereof who
are made


 


5

















 


parties to the foreclosure or against any person or persons upon whom
service of process to constitute an action in personam could have been made within
the State of Connecticut at the commencement of the foreclosure action, but the
pendency of such a foreclosure action is not a bar to any further action upon
the mortgage debt, note or obligation secured by such mortgage as to any person
liable for the same upon whom service of process to constitute an action in
personam could not have been made within the State of Connecticut at the
commencement of such foreclosure action. Pursuant to Connecticut General
Statutes §49-14, a foreclosing creditor has a statutory period of thirty (30)
days after the redemption period has expired in a foreclosure action to file a
motion for a deficiency judgment. If a motion for deficiency judgment is not
filed within such aforesaid statutory period, the foreclosing creditor is not
entitled to seek to recover any deficiency remaining after the foreclosure. If
a motion seeking a deficiency judgment is timely filed, a hearing shall be
held, a valuation for the mortgaged property shall be established and the
deficiency between the valuation of the mortgaged property and the foreclosing
creditor’s claim, if any, shall be established. In any further action on the
debt, note or obligation which was secured by the foreclosed mortgage, the
recovery is limited to the amount of the deficiency judgment.


 


10.           Under the laws of the State of Connecticut,
no mortgage, documentary, stamp, intangible or similar tax is payable in
connection with the execution, delivery or enforcement of the Documents or the
recording of the Mortgage, other than nominal recording fees paid upon the
recording of the Mortgage.


 


The opinions set forth above are subject to the following
qualifications and limitations:


 


(a)           Except with respect to the $75,000,000
principal amount of the Loans advanced and fully funded at closing under the
Credit Agreement, we express no opinion as to whether the Mortgage adequately
describes the obligations secured thereby or the effect on the enforceability
of the Mortgage against third parties to the extent of such portions of the obligations
as are deemed not to be adequately described. In particular, we note that to
the extent the Mortgage is intended to secure the Mortgagor’s obligations with
respect to any Hedging Agreement (as defined in the Credit Agreement), the
Mortgage is not and would not be effective under Connecticut law to create or
preserve, or render enforceable, any lien with respect to any such Hedging
Agreement as it applies to the Mortgage or the Mortgagor’s undertaking(s) with
respect thereto under any of the Documents, purported to be secured by the
Mortgage.


 


(b)           The enforceability of all rights, remedies
and obligations is subject to procedural due process and to laws of general
application relating to, and affecting the enforceability of, creditors’ rights
and remedies generally, under applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium and fraudulent transfer or conveyance
law and to state and federal forfeiture laws and similar laws related to
illegal drugs, anti-money laundering, terrorist or similar activities.


 


(c)           The enforceability of the Mortgage is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).


 


6

















 


(d)           Certain provisions of the Mortgage may not
be enforceable, but such unenforceability will not render the Mortgage invalid
as a whole or preclude (i) subject to the statutory provision barring
further action on the debt when foreclosure has commenced pursuant to
Connecticut General Statutes § 49-1, and subject to Connecticut General
Statutes §§ 49-14 and 49-28 affecting deficiency judgments, the judicial
enforcement of the obligation of the Mortgagor to repay the principal balance
of the Loans then outstanding, as provided therein (to the extent not deemed a
penalty), and (ii) foreclosure of the Mortgage. We note that to the extent
the Mortgage is in favor of the Mortgagee, while any promissory note or notes
evidencing all or any portion of the indebtedness secured by the Mortgages are
in favor of the Lender(s) pursuant to the Credit Agreement, evidence of the
power and authority of the Mortgagee to act for and on behalf of the Lender(s) with
respect to such promissory note(s) or an assignment of such promissory note(s) to
the Mortgagee would be required to foreclose the Mortgage.


 


(e)           Subject to the provisions of subparagraph (d) above,
no opinion is expressed as to the enforceability of (i) provisions related
to self-help, (ii) provisions which purport to establish evidentiary
standards, (iii) provisions related to waiver of remedies (or the delay or
omission of enforcement thereof), disclaimers, releases of legal or equitable
rights, discharge of defenses, or liquidated damages, (iv) provisions
releasing, exculpating or exempting a party from, or requiring indemnification
of a party for, liability for its own action or inaction to the extent the
action or inaction involves negligence, recklessness, willful misconduct,
unlawful conduct or conduct against public policy, or (v) any particular
remedy where another remedy has been selected; provided, however, that such
reservation in the aggregate will not affect the general legal, valid, binding
and enforceable nature of the obligations of the Mortgagor under the Mortgage.


 


(f)            Provisions
in the Mortgage which permit the Mortgagee to make determinations or to take
actions may be subject to requirements that such determinations be made or
actions be taken on a reasonable basis and in good faith.


 


(g)           No opinion is expressed as to the ownership
by the Mortgagor of any real or personal property. No opinion is expressed as
to the priority of any lien or security interest created in any property or as
to any person’s rights in any collateral.


 


(h)           Provisions of the Mortgage which purport to
encumber after-acquired real property are unenforceable.


 


(i)            We express no opinion as to any compliance
with, the effect of, or need for, any governmental approvals, licenses, permits
or other authorizations required for the operation of any property owned by the
Mortgagor or the conduct of the Mortgagor’s business, including but not limited
to, any applicable health, safety, subdivision, zoning, land use or
environmental law, rule or regulation.


 


(j)            We are qualified to practice law in the
State of Connecticut. We express no opinion as to the laws of any jurisdiction
other than the laws of the State of Connecticut.


 


7

















 


(k)           The opinions herein expressed are limited to
the matters expressly set forth in this opinion letter and no opinion is
implied, or may be inferred, beyond the matters expressly so stated.


 


This opinion is rendered only as of the date hereof. We undertake no
obligation to update or supplement this opinion to reflect any matters which
may hereafter come to our attention or any amendments to the Documents, or
change in law or any other matter that may occur after the date of this
opinion. This opinion is issued for the benefit of the Institutions to whom
this opinion is addressed (the “Institutions”) and may be relied upon by the
Institutions, their respective counsel, and any of their successors or assigns
in connection with the transactions contemplated by the Documents, but it may
not be relied upon by any other person or for any other purpose whatsoever,
without in each such other instance obtaining our prior written consent.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  MURTHA CULLINA LLP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank J. Saccomandi III

  
	
   

  	
   

  	
  Frank J. Saccomandi III

  
	
   

  	
   

  	
  A Partner of the Firm

  



 


8














 


EXHIBIT G


 


[FORM OF]


INTEREST ELECTION REQUEST


 


Credit Suisse, as Administrative Agent 

for the Lenders referred to below 


Eleven Madison Avenue


New
York, NY 10010


 


Attention:
Agency Group


 


[Date]


 


Ladies
and Gentlemen:


 


Reference
is made to the Second Lien Credit Agreement dated as of June 15, 2007 (as
amended, restated, supplemented, waived or otherwise modified from time to
time, the “Credit
Agreement”), among STR Acquisition, Inc., a Delaware
corporation (the “Borrower”), STR Holdings LLC, a Delaware
limited liability company, the lenders from time to time party thereto (the “Lenders”), and Credit
Suisse, as administrative agent (in such capacity, the “Administrative Agent”)
for the Lenders. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.


 


This
notice constitutes a notice of Interest Election under Section 2.06(a) of
the Credit Agreement, and the Borrower hereby irrevocably notifies the
Administrative Agent of the following information with respect to the Interest
Election requested hereby:


 


	
  (i)

  	
  Borrowing
  to which Interest Election applies:

  	
   

  
	
   

  	
  Principal
  Amount:

  	
   

  
	
   

  	
  Type
  (ABR/Eurodollar):

  	
   

  
	
   

  	
  Interest
  Period (if Eurodollar):

  	
   

  
	
   

  	
  Interest
  Election (Cash/PIK):

  	
   

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
  Effective
  Date of Election:

  	
   

  



 

















 


The
undersigned certifies, represents and warrants on behalf of the Borrower that
the Borrower is entitled to make the requested Interest Election under the
terms and conditions of the Credit Agreement.


 


 


	
   

  	
  SPECIALIZED
  TECHNOLOGY RESOURCES, INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: