Document:

Exhibit 10.26

 

RESTRICTED COMMON STOCK AGREEMENT

FOR EXECUTIVE OFFICER HOLDING A UNITS

 

RESTRICTED COMMON STOCK
AGREEMENT (this “Agreement”) made as of [                              ]
(the “Effective
Date”), by and between STR Holdings, Inc., a Delaware corporation
(the “Company”),
and Dennis L. Jilot (the “Holder”).

 

WHEREAS, STR Holdings (New) LLC (“New LLC”) entered
into that certain Unit Grant Agreement with the Holder dated as of [            ]
(the “Grant Agreement”), whereby New LLC granted units of New LLC to the
Holder;

 

WHEREAS, pursuant to that certain Plan of Conversion
by New LLC, dated as of [            ]
(the “Plan of Conversion”), New LLC filed with the Secretary of State of the
State of Delaware a certificate of conversion converting New LLC into the
Company and automatically converting the membership interests of New LLC into
shares of common stock, par value $0.01 per share (“Common Stock”), of the
Company;

 

WHEREAS, due to the conversion of New LLC into the
Company, any unvested  units of New LLC
granted pursuant to the Grant Agreement shall be converted from unvested units
of New LLC into Restricted Shares (as defined below) subject to the terms and
conditions herein;

 

WHEREAS, in consideration of the mutual covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged;
and

 

WHEREAS, certain capitalized terms used herein are
defined in Section 6 hereof.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.             Restricted Shares.  Subject to the terms and conditions of this
Agreement and pursuant to the Plan of Conversion, the Company hereby issues to
the Holder [        ] shares of Common Stock
(the “Restricted Shares”).

 

2.             Holder Representations and Warranties.

 

(a)           As an inducement to the Company to issue the Restricted
Shares to the Holder and as a condition thereto, the Holder represents,
acknowledges and agrees (as applicable) that this Agreement constitutes the
legal, valid and binding obligation of the Holder, enforceable against the Holder
in accordance with its terms, except to the extent the enforceability thereof
may be limited by bankruptcy laws, insolvency laws, moratorium laws or other
laws affecting creditors’ rights generally or by general equitable principles,
and the execution, delivery and performance of this Agreement by the Holder
does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Holder is a party or any
judgment, order or decree to which the Holder is subject.

 

(b)           In addition, the Holder represents, acknowledges and
agrees (as applicable) that:

 

(i)         (x) the
Restricted Shares have not been registered under the Securities Act, (y) the
Restricted Shares are restricted securities under the Securities Act and (z) the
Restricted Shares may not be resold or transferred unless they are first
registered under the Securities Act or unless an exemption from such
registration is available;

 

 

(ii)        the
Holder hereby makes the representations and warranties set forth in Exhibit A
hereto; and

 

(iii)       the
Company may, but shall not be obligated to, register or qualify the issuance,
or the resale, of any of the Restricted Shares under the Securities Act or any
other applicable law.

 

3.             Vesting of Shares.

 

(a)           All Restricted Shares shall initially be unvested and
shall be subject to forfeiture to the Company pursuant to this Agreement.  At such time as a Restricted Share vests in
accordance with this Section 3, it shall no longer be a Restricted Share
and shall not be subject to forfeiture.

 

(b)           Vesting.  The Restricted Shares shall vest based
on the passage of time.

 

(i)         Vesting
Schedule.  Subject to Sections 3(b)(ii),
3(b)(iii), 3(b)(iv) and to the Holder’s continued employment with the
Company on each vesting date, the Restricted Shares shall vest in equal 1/[    ] installments as of the last day of each
of the [    ] calendar months following
the Effective Date, which for the sake of clarity means [     ].

 

(ii)        Acceleration
upon Change of Control.  Upon the
occurrence of a Change of Control, all then unvested Restricted Shares shall
immediately vest in full, so long as the Holder is employed with the Company on
the date of the Change of Control.

 

(iii)       Acceleration
at July 18, 2012.  On July 18,
2012, all then unvested Restricted Shares shall immediately vest in full, so
long as the Holder is actively employed with the Company in the capacity of
chairman, president and chief executive officer.

 

(iv)       Termination.  (A)  Upon the termination of employment
by the Holder for Good Reason or by the Company without Cause, all then
unvested Restricted Shares shall immediately vest in full.

 

(B)  Upon the termination of the Holder’s employment for Cause or
for any reason other than pursuant to Clause (A) above, all unvested
Restricted Shares shall be forfeited.

 

4.             Legend.

 

(a)           Each certificate representing Restricted Shares shall bear
each of the following legends.

 

“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT
SUCH REGISTRATION IS NOT REQUIRED.”

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXCHANGED UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OR
EXCHANGE COMPLIES WITH THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT AND THE
RESTRICTED 

 

2

 

COMMON
STOCK AGREEMENT, EACH AS AMENDED FROM TIME TO TIME, BETWEEN OR AMONG THE
COMPANY AND THE INVESTORS PARTY THERETO. 
IN ADDITION TO RESTRICTIONS ON TRANSFER, THE RESTRICTED COMMON STOCK
AGREEMENT PROVIDES FOR THE VESTING OF THE SHARES ACCORDING TO THE SPECIFIC
PROVISIONS OF THE RESTRICTED COMMON STOCK AGREEMENT.  COPIES OF THE REGISTRATION RIGHTS AGREEMENT
AND THE RESTRICTED COMMON STOCK AGREEMENT ARE ON FILE WITH THE COMPANY.”

 

(b)           The certificates shall also bear any legend required by
any applicable state securities law.

 

(c)           The certificates shall be deposited by the Holder,
together with a stock power endorsed in blank, with the Company, to be held in
escrow during any restriction period.

 

5.             Restrictions on Transfer and Conversion.

 

(a)           The Company and the Holder acknowledge and agree that the
Restricted Shares are subject to and restricted by this Agreement.  Once vested, the Restricted Shares shall no
longer be restricted by the terms of this Agreement but shall be subject to the
restrictions set forth in the Registration Rights Agreement and the Securities
Act.

 

(b)           The Restricted Shares shall only be transferable to Restricted
Share Permitted Transferees of the Holder. 
Any attempt to Transfer any of the Restricted Shares to Persons other
than Restricted Share Permitted Transferees of the Holder shall be null and
void and have no force or effect, and the Company shall not, and shall cause
any transfer agent not to, give any effect in such entity’s share records to
such attempted Transfer.

 

(c)           The Holder acknowledges that the transfer restrictions
contained in this Agreement are reasonable and in the best interests of the
Company.  The Holder understands that this
 Agreement contains forfeiture provisions
in respect of the Restricted Shares in favor of the Company or its designee
upon the Holder’s termination of employment.

 

6.             Definitions.

 

The following terms shall have the meanings ascribed
below:

 

“Cause” means “cause” as
defined in the Holder’s
employment agreement with the Company or any of its subsidiaries.

 

“Change of Control” means “Change of Control” as
defined in the Holder’s employment
agreement with the Company or any of its subsidiaries.

 

“Good Reason” means “good reason” as defined in the Holder’s employment agreement with the Company or any
of its subsidiaries.

 

“Person” means any individual or any general
partnership, limited partnership, limited liability company, corporation, joint
venture, trust, business trust, cooperative, association or other entity and,
where the context so permits, the legal representatives, successors in interest
and permitted assigns of such Person.

 

3

 

“Registration Rights Agreement” means the Registration
Rights Agreement, dated as of [                    ],
among the Company and certain stockholders of the Company, as amended, modified
or supplemented from time to time.

 

“Restricted Share Permitted Transferees” means (i) any
spouse, lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of the Holder, (ii) a trust
that is for the exclusive benefit of the Holder or its Restricted Share
Permitted Transferees under clause (i) above or (iii) a limited
liability company or corporation, all of the outstanding capital stock or
membership interests of which is of record and beneficially owned by the Holder
or any of those Persons in clause (i) above.

 

“Securities Act” means the Securities Act of 1933, as amended, or
any successor federal law then in force.

 

“Transfer” means the sale, transfer, assignment, pledge or other
disposal (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) of any Restricted Shares.

 

7.             General Provisions.

 

(a)           Notices.  Any
notification required by the terms of this Agreement shall be given in writing
and shall be deemed effective upon personal delivery or within three (3) days
of deposit with the United States Postal Service, by registered or certified
mail, with postage and fees prepaid.  A
notice shall be addressed to the Company at its principal executive office and
to the Holder at the address that he or she most recently provided to the
Company.

 

(b)           Survival of Representations, Warranties and Agreements.  All representations, warranties and
agreements contained herein shall survive indefinitely, including following
termination of this Agreement or of the Holder’s employment with the Company.

 

(c)           Entire Agreement. 
This Agreement and the Registration Rights Agreement shall constitute
the entire contract between the parties hereto with regard to the subject
matter hereof.  They supersede any other
agreements, representations or understandings (whether oral or written and
whether express or implied) which relate to the subject matter hereof.

 

(d)           Waiver.  No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition whether of like or
different nature.

 

(e)           Successors and Assigns.  The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and upon the Holder, the Holder’s assigns and the legal
representatives, heirs and legatees of the Holder’s estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to be joined herein and be bound by the terms hereof.

 

(f)            Choice of Law; Jurisdiction; Waiver of Jury Trial.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF DELAWARE WITHOUT REGARD TO
CONFLICTS OF LAWS.

 

SUBJECT TO THE TERMS OF THIS AGREEMENT, THE PARTIES AGREE THAT ANY AND
ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AGREEMENT SHALL BE LITIGATED IN
THE FEDERAL OR STATE COURTS IN DELAWARE. 
BY 

 

4

 

EXECUTING AND DELIVERING THIS
AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH
COURTS FOR ITSELF, HIMSELF, OR HERSELF AND IN RESPECT OF ITS, HIS OR HER
PROPERTY WITH RESPECT TO SUCH ACTION. 
EACH PARTY AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND
HEREBY WAIVES ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT
FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

 

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

 

(g)           Amendment. 
The Board of Directors of the Company, or the Compensation Committee thereof,
may amend or alter this Agreement and the Restricted Shares issued hereunder at
any time; provided that, no such amendment or alteration shall be made without
the consent of the Holder if such action would materially diminish any of the
rights of the Holder under this Agreement or with respect to the Restricted
Shares.

 

(h)           Employment Rights. 
Neither this Agreement nor any of its provisions is intended to confer
or should be construed as conferring any rights on the Holder to continued
employment with the Company or any rights of employment for a fixed term.  No contract of employment, express or
implied, is created hereby and nothing contained herein shall be construed as
creating a joint venture, partnership, agency or other enterprise between the
parties.

 

(i)            No Waiver; Modifications in Writing.  No waiver of or consent to any departure from
any provision of this Agreement shall be effective unless signed in writing by
the party entitled to the benefit thereof; provided, however, that the Company
may amend, modify or terminate the terms of the Restricted Shares in accordance
with the terms in the Company’s Certificate of Incorporation.

 

(j)            Severability. The provisions of this Agreement are severable
and if any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions shall nevertheless
be binding and enforceable.

 

(k)           Signature in Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

[SIGNATURE PAGE
FOLLOWS]

 

5

 

IN WITNESS WHEREOF, the parties hereto have executed this Restricted Common
Stock Agreement as of the date first written above.

 

 

	
   

  	
  STR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dennis
  L. Jilot

  

 

6

 

EXHIBIT
A

 

Investment Representations
and Warranties

 

The Holder hereby represents
and warrants to the Company that:

 

1.             The Restricted Shares received by
him will be held by him for investment only for his own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof in violation of applicable U.S. federal or state or foreign securities
laws.  The Holder has no current
intention of selling, granting participation in or otherwise distributing the
Restricted Shares in violation of applicable U.S. federal or state or foreign
securities laws.  The Holder does not have
any contract, undertaking, agreement or arrangement with any person or entity
to sell, transfer or grant participation to such person or entity, or to any
third person or entity, with respect to any of the Restricted Shares, in each
case, in violation of applicable U.S. federal or state or foreign securities
laws.

 

2.             The Holder understands
that the Restricted Shares have not been registered under the Securities Act or
any applicable U.S. federal, state or foreign securities laws, and that the
Restricted Shares are being issued in reliance on an exemption from
registration, which exemption depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder’s
representations as expressed herein.

 

3.             The Holder has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of his owning the Restricted Shares.  The Holder is a
sophisticated investor, has relied upon independent investigations made by the Holder and, to the
extent believed by the Holder to be appropriate, the Holder’s
representatives, including the Holder’s own
professional, tax and other advisors, and is making an independent decision to
invest in the Restricted Shares.  The Holder has been
furnished with such documents, materials and information that the Holder deems
necessary or appropriate concerning the terms and conditions of the
transactions contemplated by the Agreement and the Holder’s holding of
the Restricted Shares and for evaluating an investment in the Company, and the Holder has read
carefully such documents, materials and information and understands and has
evaluated the types of risks involved with holding the Restricted Shares.  The Holder has not relied
upon any representations or other information (whether oral or written) from
the Company or its stockholders, directors, officers or affiliates, or from any
other person or entity, in connection with his investment in the Restricted
Shares.  The Holder acknowledges
that the Company has not given any assurances with respect to the tax
consequences of the ownership and disposition of the Restricted Shares.

 

4.             The Holder understands
that no U.S. federal or state or foreign agency has passed upon the Restricted
Shares or upon the Company, or upon the accuracy, validity or completeness of
any documentation provided to the Holder in connection
with the transactions contemplated by the Agreement, nor has any such agency
made any finding or determination as to holding the Restricted Shares.

 

5.             The Holder understands
that there are substantial restrictions on the transferability of the
Restricted Shares and that on the date of the Agreement and for an indefinite
period thereafter there will be no public market for the Restricted Shares and,
accordingly, it may not be possible for the Holder to liquidate
his investment in case of emergency, if at all. 
In addition, the Holder understands that the
Agreement contains substantial restrictions on the 

 

 

transferability of the
Restricted Shares and provide that, in the event that the conditions relating
to the transfer of any Restricted Shares in such document have not been
satisfied, the holder shall not transfer any such Restricted Shares, and unless
otherwise specified the Company will not recognize the transfer of any such
Restricted Shares on its books and records or issue any share certificates
representing any such Restricted Shares, and any purported transfer not in
accordance with the terms of the Agreement shall be void.  As such, Holder understands
that: a restrictive legend or legends in a form to be set forth in the
Agreement will be placed on the certificates representing the Restricted
Shares; a notation will be made in the appropriate records of the Company
indicating that each of the Restricted Shares are subject to restrictions on
transfer and, if the Company should at some time in the future engage the
services of a securities transfer agent, appropriate stop-transfer instructions
will be issued to such transfer agent with respect to the Restricted Shares;
and the Holder will sell, transfer or otherwise dispose of the
Restricted Shares only in a manner consistent with the Holder’s
representations set forth herein and then only in accordance with the Agreement.

 

6.             The Holder understands
that (i) the Restricted Shares may not be sold, transferred or otherwise
disposed of without registration under the Securities Act or an exemption
therefrom, (ii) the Restricted Shares have not been registered under the
Securities Act; (iii) the Restricted Shares must be held indefinitely and
he must continue to bear the economic risk of holding the Restricted Shares
unless such shares are subsequently registered under the Securities Act or an
exemption from such registration is available; (iv) the Holder is prepared to
bear the economic risk of holding the Restricted Shares for an indefinite
period of time; (v) it is not anticipated that there will be any public
market for the Restricted Shares; (vi) the Restricted Shares are
characterized as “restricted securities” under the U.S. federal securities
laws; and (vii) the Restricted Shares may not be sold, transferred or
otherwise disposed of except in compliance with federal, state and local law.

 

7.             The Holder understands that
an investment in the Restricted Shares is not recommended for investors who
have any need for a current return on this investment or who cannot bear the
risk of losing their entire investment. 
In that regard, the Holder understands that his
holding the Restricted Shares involves a high degree of risk of loss.  The Holder acknowledges
that: (i) he has adequate means of providing for his current needs and
possible personal contingencies and has no need for liquidity in this
investment; (ii) his commitment to investments which are not readily
marketable is not disproportionate to his net worth; and (iii) his holding
the Restricted Shares will not cause his overall financial commitments to
become excessive.

 

8.             The Holder is/is not
(circle one) an “accredited investor,” as such term is defined in Rule 501
of the Securities Act.

 

8Exhibit 10.29

 

UNIT GRANT AGREEMENT

 

THIS UNIT GRANT AGREEMENT is made as of                 ,
2009 (the “Agreement”),
by and between STR Holdings (New) LLC, a Delaware limited liability company (the “Company”),
and Dennis L. Jilot (the “Grantee”).

 

W I T N E S S E T H :

 

WHEREAS, the Grantee has entered into that certain
Employment Agreement with Specialized Technology Resources, Inc. (“STR”)
dated as of July 18, 2008 (as amended, the “Employment Agreement”) whereby
the Grantee has agreed to render services to STR and its affiliates, including
the Company.

 

WHEREAS, in exchange for the services to be rendered
to or for the benefit of the Company by the Grantee and pursuant to the
provisions of the Employment Agreement, the Company desires to issue and grant
to the Grantee Units (as hereinafter defined), on the terms and conditions set
forth in this Agreement and in the Second Amended and Restated Limited
Liability Company Agreement of the Company, dated as of [              
    ], 2009 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, the “LLC Agreement”), a copy of which has been furnished
to the Grantee.

 

NOW, THEREFORE, in order to implement the foregoing
and in consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1.             Issuance
and Grant.  Pursuant to the terms and
subject to the conditions set forth in this Agreement, the Employment Agreement
and the LLC Agreement, the Company
hereby agrees to issue and grant to the Grantee [                ]
unrestricted Class A Units of the Company (the “Unrestricted Units”)
and [                ]
restricted Class A Units of the Company (the “Restricted Units” and
together with the Unrestricted Units, the “Units”).  For the avoidance of doubt, the Unrestricted
Units shall not be subject to vesting.  The
Company agrees the Grantee’s provision of services to or for the benefit of the
Company constitutes sufficient consideration for the Units.  Capitalized terms used in this Agreement and
not otherwise defined in this Agreement shall have the meanings assigned to
them in the LLC Agreement.

 

2.             Vesting.  The
grant of the Units shall occur on the date hereof (the “Grant Date”).  The Restricted Units shall vest in equal installments of [      ]
Units as of the last day of each of the [    ] successive
calendar months after the date hereof, which, for the sake of clarity, means
that the first vesting date for such Restricted Units will be November 30,
2009; provided, however, if the Grantee is still actively employed in his
current capacity as Chairman, President and
Chief Executive Officer of STR as of July 18, 2012, the remaining unvested
Restricted Units shall become immediately vested; provided, further that if the
Grantee’s employment is terminated by STR for Cause (as defined in the
Employment Agreement) or by the Grantee without Good Reason (as defined in the
Employment Agreement), the Grantee shall immediately forfeit any Restricted Units
that remain unvested as of the date of such termination.  In the
event of a Change of Control (as defined in the Employment Agreement) or in the
event the Grantee’s employment is terminated by the Company without Cause or by
the Grantee for Good Reason (including by reason of the Grantee’s death or
Disability (as defined in the Employment Agreement) whether prior to or after
the issuance date of the Restricted Units, the Restricted 

 

 

Units to
the extent they then remain unvested, shall become immediately and fully vested
and payable in accordance with the terms of this Section 2.

 

3.             Section 83(b) Election.  The Grantee shall have the option to make an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended (“Code” and such an election, an “83(b) Election”),
to include the fair market value of the Restricted Units in his current taxable
income as of the date of issuance, and the Company agrees to reasonably
cooperate with the Grantee if he chooses to make this election.

 

4.             Representations and Warranties of the Company.  The Company hereby represents and warrants to
the Grantee as follows:

 

(a)           The Company is a limited liability company, duly
organized, existing and in good standing, under the laws of its state of
formation.

 

(b)           The Company has full limited liability company power and
authority to enter into and perform this Agreement.  The execution, delivery and performance of
this Agreement by the Company has been duly and validly approved by the
Company.  This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and
binding agreement of the Company, enforceable against Company in accordance
with its terms.

 

(c)           When issued and delivered in accordance with this
Agreement, the Units will be duly authorized, validly issued, fully paid and
nonassessable and will be free of all preemptive rights and any other liens,
claims, charges and other encumbrances other than restrictions on transfer
under the LLC Agreement and applicable federal and state securities laws.

 

5.             Representations and Warranties of the Grantee.  The Grantee hereby represents and warrants to
the Company that:

 

(a)           The Grantee has the power and authority to enter into and
perform this Agreement and this Agreement constitutes a valid and legally
binding obligation of the Grantee.

 

(b)           The Grantee is in a financial position to hold the Units
for an indefinite period of time and is able to bear the economic risk and
withstand a complete loss of the Grantee’s investment in the Units.

 

(c)           The Grantee believes the Grantee, either alone or with the
assistance of the Grantee’s own professional advisor, has such knowledge and
experience in financial and business matters that the Grantee is capable of
reading and interpreting financial statements and evaluating the merits and
risks of the prospective investment in the Units and has the net worth to
undertake such risks.

 

(d)           The Grantee has obtained, to the extent the Grantee deems
necessary, the Grantee’s own personal professional advice with respect to the
tax consequences of receiving, and the risks inherent in, the investment in the
Units, and the suitability of an investment in the Units in light of the
Grantee’s financial condition and investment needs.

 

 

(e)           The Grantee believes that the investment in the Units is
suitable for the Grantee based upon the Grantee’s investment objectives and
financial needs, and the Grantee has adequate means for providing for the
Grantee’s current financial needs and personal contingencies and has no need
for liquidity of investment with respect to the Units.

 

(f)            The Grantee has had, prior to the issuance of the Units,
been furnished with, and has carefully read, the LLC Agreement, and the Grantee
has been given access to full and complete information regarding the Company
and has utilized such access to the Grantee’s satisfaction for the purpose of
obtaining information the Grantee believes to be relevant in making its
investment decision and, particularly, the Grantee has either attended or been
given reasonable opportunity to attend a meeting with representatives of the
Company for the purpose of asking questions of, and receiving answers from,
such representatives concerning the Company and to obtain any additional
information, to the extent reasonably available, the Grantee believes to be
relevant in making its investment decision.

 

(g)           The Grantee recognizes that an investment in the Units
involves a high degree of risk, including, but not limited to, the risk of
economic losses from operations of the Company.

 

(h)           The Grantee realizes that (i) the acquisition of the
Units is a long-term investment; (ii) the Grantee must bear the economic
risk of investment for an indefinite period of time because the Units have not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or under the securities laws of any state and, therefore, none of
such Units can be sold unless they are subsequently registered under said laws
or exemptions from such registrations are available, and there can be no
assurance that any such registration will be effected at any time in the future;
(iii) the Grantee may not be able to liquidate the Grantee’s investment in
the event of an emergency or pledge any of such Units as collateral for loans;
and (iv) the transferability of the Units is restricted in accordance with
the LLC Agreement.

 

(i)            The Grantee is a bona fide resident of, is domiciled in
and received the offer and made the decision to invest in the Units in the
state set forth on the signature page below under “Address,” and the Units
are being accepted by the Grantee in the Grantee’s name solely for the Grantee’s
own beneficial interest and not as nominee for, or on behalf of, or for the
beneficial interest of, or with the intention to transfer to, any other person,
trust or organization.

 

(j)            The Grantee has not retained any finder, broker, agent,
financial advisor, “Purchaser Representative” (as defined in Rule 501(h) of
Regulation D of the Securities Act) or other intermediary in connection with
the transactions contemplated by this Agreement and agrees to indemnify and
hold harmless the Company from any liability for any compensation to any such
intermediary retained by the Grantee and the fees and expenses of defending
against such liability or alleged liability.

 

(k)           The Grantee has completed Schedule A to this
Agreement as to his/her status as an “Accredited Grantee” (as defined
therein) and such information is true and complete.

 

(l)            The Grantee agrees promptly to notify the Company should
the Grantee become aware of any change in the information set forth in this Section 5.

 

 

6.               Conditions to Obligations of
the Company.  The obligations
of the Company to grant the Units are subject to the Grantee having
entered into the LLC Agreement.

 

7.               Authority of the Board of Managers.  All decisions, interpretations and other
actions of the Board of Managers and/or any committee designated by the Board
of Managers, shall be final and binding on the Grantee and other persons
deriving their rights from the Grantee.  Without limiting the generality of the foregoing,
the Board of Managers and/or any committee designated by the Board of
Managers may, in its sole discretion,
clarify, construe or resolve any ambiguity in any provision of this Agreement,
accelerate vesting, or waive any terms or conditions applicable to any Units.

 

8.               Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be considered an original, but all of which taken together shall
constitute one and the same Agreement.

 

9.               Employment Rights.  Neither this Agreement nor any of its
provisions is intended to confer or should be construed as conferring any
rights on the Grantee to continued employment with the Company or any rights of
employment for a fixed term.  No contract
of employment, express or implied, is created hereby and nothing contained
herein shall be construed as creating a joint venture, partnership, agency or
other enterprise between the parties.

 

10.             No Waiver; Modifications in Writing.  This Agreement, together with the LLC
Agreement and the other agreements referred to herein and therein and any
exhibits, schedules or other documents referred to herein or therein, sets
forth the entire understanding of the parties, and supersedes all prior
agreements, arrangements, term sheets, presentations and communications,
whether oral or written, with respect to the specific subject matter
hereof.  No waiver of or consent to any
departure from any provision of this Agreement shall be effective unless signed
in writing by the party entitled to the benefit thereof; provided, however,
that the Company may amend, modify or terminate the Units accordance with the
terms in the LLC Agreement.

 

11.             Indemnification. 
The Grantee will, to the fullest extent permitted by applicable law,
indemnify the Company and each member, manager, officer and employee (each an “Indemnitee”)
against any losses, claims, damages or liabilities to which any of them may
become subject in any capacity in any action, proceeding or investigation
arising out of or based upon any false representation or warranty, or breach or
failure by the Grantee to comply with any covenant or agreement made by the Grantee
herein.  The Grantee will reimburse each
Indemnitee for reasonable legal and other expenses (including the cost of any
investigation and preparation) as they are incurred in connection with any such
action, proceeding or investigation (whether incurred between any Indemnitee
and the Grantee, or between any Indemnitee and any third party).  The reimbursement and indemnity obligations
of the Grantee under this Section 11 will survive the Grant Date and will
be in addition to any liability which the Grantee may otherwise have
(including, without limitation, liabilities under the LLC Agreement), and will
be binding upon and inure to the benefit of any successors, assigns, heirs,
estates, executors, administrators and personal representatives of any
Indemnitee.

 

12.             Binding Effect;
Assignment.  The rights
and obligations of each party under this Agreement may not be assigned to any
other person or entity.  Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any person or entity other than the
parties to this Agreement, and their respective 

 

 

successors and assigns.  This Agreement shall be binding upon the
Company, the Grantee and their respective heirs, successors, legal
representatives and permitted assigns.

 

13.             Severability of
Provisions.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

14.             Conflict with Other Agreements.  For so long as the LLC Agreement is in full
force and effect, this Agreement shall be subject to the provisions of the LLC
Agreement.  To the extent any of the
provisions of this Agreement conflict or are inconsistent with any of the
provisions of the LLC Agreement, the LLC Agreement shall control.  Upon the conversion of the Company to a
corporation (the “Conversion”), this Agreement shall be subject to the
provisions of the restricted stock agreement between the Grantee and the
successor corporation to the Company (the “Restricted Stock Agreement”).  Following the Conversion, to the extent any
of the provisions of this Agreement conflict or are inconsistent with any of
the provisions of the Restricted Stock Agreement, the Restricted Stock
Agreement shall control.

 

15.             Schedules and Descriptive Headings.  All Schedules to this Agreement shall be
deemed to be a part of this Agreement. 
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.

 

16.             Governing Law. 
This Agreement, and all disputes, claims or causes of action that arise
from or are in connection with this Agreement, shall be governed by and
construed in accordance with the domestic substantive laws of the State of New
York without giving effect to any choice or conflict of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction.

 

[The remainder of this page has been
intentionally left blank.]

 

 

IN WITNESS WHEREOF, the Grantee has executed this
Agreement as of the date first written above.

 

	
   

  	
  GRANTEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dennis L. Jilot

  

 

 

ACCEPTED AND AGREED,

as of the date first written above:

 

 

STR HOLDINGS (NEW) LLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Barry
  A. Morris

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President and

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  

 

[SIGNATURE PAGE TO UNIT
GRANT AGREEMENT]

 

 

Exhibit A

 

ELECTION
TO INCLUDE CERTAIN CLASS A UNITS

 

IN
GROSS INCOME PURSUANT TO

 

SECTION 83(b) OF
THE INTERNAL REVENUE CODE

 

On                   ,
2009 the undersigned was granted certain Class A Units (the “Units”)
in STR Holdings (New) LLC (the “Company”).  The Units are subject to certain restrictions
pursuant to the Second Amended and Restated Limited Liability Company Agreement
of the Company, dated as of                 ,
2009 (the “Agreement”).

 

Pursuant to §83(b) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulation §1.83-2 promulgated thereunder, the
undersigned hereby makes an election, with respect to the Units, to report as
taxable income for the calendar year 2009 the excess (if any) of the value of
the Units on               
2009 over the purchase price thereof.

 

The following information is supplied in accordance with Treasury
Regulation §1.83-2(e):

 

1.                                       The name,
address and social security number of the undersigned:

 

Name:

Address:

SSN:

 

2.                                       A description
of the property with respect to which the election is being made:  restricted units in the Company known as Class A
Units which entitle the holder thereof to a share of the Company’s capital and
profits.

 

3.                                       (a)           The date on which the Units were
transferred:                  ,
2009 (the “Grant Date”).

 

(b)           The
taxable year for which such election is made: 
calendar        year 2009.

 

4.                                       The
restrictions to which the property is subject: 
The Units shall vest in equal
installments of [        ] Units as of
the last day of each of the [    ] successive calendar
months after the date hereof, which, for the sake of clarity, means that the
first vesting date for such Units will be November 30, 2009; provided,
however, if the Grantee is still actively employed in his current capacity as Chairman, President and Chief Executive
Officer

 

 

of Specialized Technology Resources, Inc. (“STR”)
as of July 18, 2012, the remaining unvested Units shall become immediately
vested; provided, further that if the Grantee’s employment is terminated by STR
for Cause (as defined in the Employment Agreement with STR dated as of July 18,
2008 (as amended, the “Employment Agreement”)) or by the Grantee without Good Reason (as defined in the Employment
Agreement), the Grantee shall immediately forfeit any Units that remain
unvested as of the date of such termination.  In the
event of a Change of Control (as defined in the Employment Agreement) or in the
event the Grantee’s employment is terminated by the Company without Cause or by
the Grantee for Good Reason (including by reason of the Grantee’s death or
Disability (as defined in the Employment Agreement)) whether prior to or after
the issuance date of the Units, the Units to the extent they then remain
unvested, shall become immediately and fully vested and payable in accordance
with the terms of the Agreement.

 

5.                                       The fair market
value on               
2009 of the property with respect to which the election is being made, determined
without regard to any lapse restrictions: 
[$    ].

 

6.                                       The amount paid
for such property:  $0.

 

A copy of this election is being furnished to the Company pursuant to
Treasury Regulation §1.83-2(e)(7).  A
copy of this election will be submitted with the 2009 U.S. federal income tax
return of the undersigned pursuant to Treasury Regulation §1.83-2(c).

 

Dated:                      ,
2009

 

	
   

  	
   

  
	
   

  	
   

  

 

 

SCHEDULE A

 

ACCREDITED INVESTOR STATUS

 

The Grantee represents and
warrants that he is an “accredited investor” as defined in Rule 501(a) promulgated
under Regulation D of the Securities Act, because he meets at least one of the
following criteria (please initial each applicable item):

 

	
  o

  	
   

  	
  The Grantee is a
  natural person whose individual net worth, or joint net worth with his or her
  spouse, exceeds $1,000,000 at the time of the subscriber’s purchase; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  natural person who had an individual income in excess of $200,000 in each of
  the two most recent years (2007 and 2008) or joint income with the Grantee’s
  spouse in excess of $300,000 in each of those years and who reasonably
  expects to reach the same income level in the current year (2009); or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  corporation, or similar business trust, partnership or an organization described
  in Section 501(c)(3) of the Internal Revenue Code, not formed for
  the specific purpose of acquiring the Issuer Common Stock, with total assets
  in excess of $5,000,000; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is either
  (i) a bank as defined in Section 3(a)(2) of the Securities
  Act, or any savings and loan association or other institution as defined in
  Section 3(a)(5)(A) of the Securities Act whether acting in its
  individual or fiduciary capacity, (ii) a broker or dealer registered
  pursuant to Section 15 of the Securities Exchange Act of 1934, as
  amended, (iii) an insurance company as defined in Section 2(13) of
  the Securities Act, (iv) an investment company registered under the
  Investment Company Act of 1940, as amended, or a business development company
  as defined in Section 2(a)(48) of such Act, (v) a Small Business
  Investment Company licensed by the U.S. Small Business Administration under
  Section 301(c) or (d) of the Small Business Investment Act of
  1958, (vi) a plan established or maintained by a state, its political
  subdivisions, or any agency or instrumentality of a state or its political
  subdivisions, for the benefit of its employees, if such plan has total assets
  in excess of $5,000,000 or (vii) an employee benefit plan within in the
  meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
  if the investment decision is made by a plan fiduciary, as defined in
  Section 3(21) of ERISA, which plan fiduciary is either a bank, savings
  and loan association, insurance company or registered investment adviser, or
  if the employee benefit plan has total assets in excess of $5,000,000 or, if
  a self-directed plan, with investment decisions made solely by persons who
  are accredited investors; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  private business development company as defined in Section 202(a)(22) of
  the Investment Advisers Act of 1940, as amended; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  director or executive officer of the Company; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a trust,
  with total assets in excess of $5,000,000, not formed for the specific
  purpose of acquiring the Securities, the purchase of which is directed by a
  sophisticated person as described in Rule 506(b)(2)(ii) of
  Regulation D promulgated under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is any
  entity in which all of the equity owners are accredited investors. (Please
  submit a copy of this page countersigned by each such equity owner if
  relying on this item).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}]]