Document:

Exhibit 10.17

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of November 5, 2009 (this “Assignment
and Assumption Agreement”), between STR Holdings LLC, a Delaware limited
liability company (“Predecessor LLC”) and STR Holdings (New) LLC, a
Delaware limited liability company (“New LLC” and together with any corporate
successor to New LLC by way of conversion, “Newco”).

 

W I T N
E S S E T H:

 

WHEREAS,
Predecessor LLC will file a Certificate of Cancellation and liquidate pursuant
to the Plan of Complete Liquidation and Dissolution, dated as of November 5,
2009 (the “Liquidation and Dissolution”).

 

WHEREAS, New LLC
has entered into the Agreement and Plan of Merger, by and among Specialized
Technology Resources, Inc. (“STR”), New LLC and STR Merger, Inc.,
dated as of November 5, 2009 (the “Merger Agreement”), whereby STR will
become a wholly-owned subsidiary of New LLC.

 

WHEREAS,
Predecessor LLC is party as “Holdings” to the First Lien Credit Agreement,
dated as of June 15, 2007, among STR, the Lenders party thereto and Credit
Suisse, as Administrative Agent and to the Second Lien Credit Agreement, dated
as of June 15, 2007, among STR, the Lenders party thereto and Credit
Suisse, as Administrative Agent (collectively, the “Credit Agreements”).

 

WHEREAS,
immediately prior to the Liquidation and Dissolution (the “Effective Time”),
Predecessor LLC shall assign all of its rights, title, interest and obligations
under each “Loan Document” (as such term is defined under each Credit
Agreement, collectively the “Loan Documents”) to Newco, subject to the
terms and conditions of this Assignment and Assumption Agreement.

 

WHEREAS, in accordance with the terms of this
Assignment and Assumption Agreement, Predecessor LLC and Newco have agreed to provide
for (a) such assignment from Predecessor LLC to Newco of the Loan
Documents from and after the Effective Time, and (b) the acceptance by Newco
of such assignment and the assumption by Newco of (i) all obligations to
be performed by Predecessor under the Loan Documents and (ii) the assumed
liabilities related to the Loan Documents (the “Assumed Liabilities”).

 

NOW, THEREFORE, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

 

1.                                       Assignment.  Predecessor
LLC hereby assigns, transfers and conveys to Newco, to the extent that such are
legally assignable and any necessary consents to

 

 

assignment have been
obtained, all of Predecessor LLC’s right, title and interest in, under and to
the Loan Documents from and after the Effective Time.

 

2.                                       Acceptance and
Assumption.  Newco
hereby (a) accepts the assignment, transfer and conveyance, to the extent
that such are legally assignable and necessary consents to assignment have been
obtained, of Predecessor LLC’s right, title and interests in, under and to the Loan
Documents; (b) assumes, undertakes and agrees, subject to valid claims and
defenses, to pay, satisfy, perform or discharge in accordance with the terms
thereof all obligations and liabilities of any kind arising out of, or required
to be performed under, such assigned Loan Documents; and (c) assumes,
undertakes and agrees to pay, satisfy, perform or discharge in accordance with
the terms thereof all of the Loan Documents and all obligations and liabilities
of any kind arising out of Newco’s assumption of the Assumed Liabilities.

 

3.                                       Parties in
Interest.  This
Assignment and Assumption Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.

 

4.                                       Counterparts.  This Assignment and Assumption Agreement may
be executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, and all of which together shall
constitute one and the same instrument.

 

5.                                       Governing Law.  This Assignment and Assumption Agreement and
the rights and obligations of the parties hereunder shall be governed by, and
construed in accordance with, the laws of the State of New York as applied to
contracts made and performed entirely in such State.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

2

 

IN WITNESS WHEREOF, the parties hereto have executed
this Assignment and Assumption Agreement on the date first written above.

 

 

	
   

  	
  STR HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry A. Morris

  
	
   

  	
   

  	
  Name:

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STR HOLDINGS (NEW) LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  

 

[SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT]Exhibit 10.18

 

RESTRICTED COMMON STOCK AGREEMENT

FOR OFFICERS HOLDING C, D AND E UNITS

 

RESTRICTED COMMON STOCK
AGREEMENT (this “Agreement”)
made as of November 6, 2009 (the “Effective Date”), by and between STR
Holdings, Inc., a Delaware corporation (the “Company”), and
[                    ]
(the “Holder”).

 

WHEREAS, STR Holdings LLC (“Old LLC”) entered into
that certain Incentive Unit Grant Agreement with the Holder dated as of June
15, 2007 (the “Grant Agreement”), whereby Old LLC granted incentive units of
Old LLC to the Holder;

 

WHEREAS, on the date hereof, Old LLC will enter into
a corporate reorganization, whereby the unitholders of Old LLC will become
unitholders of STR Holdings (New) LLC (“New LLC”);

 

WHEREAS, pursuant to that certain Plan of Conversion
by New LLC, dated as of November 6, 2009 (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 incentive units of Old LLC granted pursuant to the Grant
Agreement and converted in the corporate reorganization into unvested incentive
units of New LLC shall be converted from unvested incentive 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”), of which
[        ] shares of Restricted Shares
shall be Time Vesting Restricted Shares (as defined below) and
[        ] shares of Restricted Shares
shall be Performance Vesting Restricted Shares (as defined below).

 

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)           Time Vesting. 
[      ]
of the Restricted Shares shall vest based on the passage of time (“Time
Vesting Restricted Shares”).

 

(i)         Vesting
Schedule.  Subject to Section 3(b)(ii) and
to the Holder’s continued employment with the Company on each vesting date, the
Time Vesting Restricted Shares shall vest in equal 1/32 installments as of the
last day of each of the 32 calendar months following the Effective Date, which
for the sake of clarity means November 30, 2009.

 

(ii)        Acceleration
upon Change of Control.  Upon the
occurrence of a Change of Control, all then unvested Time Vesting Restricted
Shares shall immediately vest in full, subject to Section 3(b)(iii).

 

(iii)       Termination.

 

Upon the termination of the Holder’s employment or for any reason, all
unvested Time Vesting Restricted Shares shall be forfeited.

 

(c)           Performance
Vesting. 
[      ] of the Restricted Shares shall
vest based on the Company attaining the following performance criteria (“Performance
Vesting Restricted Shares”).

 

(i)         Vesting
Schedule.  Subject to Section 3(c)(ii) and
to the Holder’s continued employment with the Company on each vesting date, the
Performance Vesting Restricted Shares shall vest in three (3) equal
installments following the three successive Fiscal Years, beginning with the
Fiscal Year ending on December 31, 2009 (for the 2009 Fiscal Year) if the
Equity Valuation, measured as of the end of such Fiscal Year, is no less than
the Performance Target for such Fiscal Year. 
If the Performance Target for any of the first two Fiscal Years referred
to above is not attained, the Yearly Amount for the previous unvested Fiscal
Year which is not then vested (or, if the Yearly Amount for the previous Fiscal
Year has vested, then the Yearly Amount for the prior unvested Fiscal Year)
shall become vested and exercisable at the end of the first Fiscal Year
thereafter in which the Equity Valuation for such Fiscal Year is no less than
the Performance Target for such Fiscal Year. 
For purposes of illustration of the previous sentence, if 

 

2

 

the Performance Target is not achieved for the 2009 and 2010 Fiscal
Years but is achieved for the 2011 Fiscal Year, in 2011, the Yearly Amounts for
both 2010 and 2011 would become vested.

 

(ii)        Acceleration
upon Change of Control.  Upon the
occurrence of a Change of Control, all then unvested Performance Vesting
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)       Termination.  Upon the termination of employment of the
Holder for any reason, the unvested Performance Vesting 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 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
Permitted Transferees of the Holder.  Any
attempt to Transfer any of the Restricted Shares to Persons other than
Permitted Transferees 

 

3

 

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:

 

“Affiliate” of any Person means any Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with such Person.

 

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

 

“Change of Control” means:

 

(i)            the
sale (in one transaction or a series of transactions) of all or substantially
all of the assets of the Company to a third party other than any of the
Existing Stockholders or any of their respective Affiliates;

 

(ii)           a
sale or issuance (in one transaction or a series of transactions) of any
securities resulting in more than 50% of the voting power of the Company being
held by a “person” or “group” (as such terms are used in the Exchange Act) that
does not include any of the Existing Stockholders or any of their respective
Affiliates;

 

(iii)          a
merger or consolidation of the Company with or into another Person if following
such merger or consolidation, more than 50% of the voting power of the Company
is held by a “person” or “group” (as such terms are used in the Exchange Act)
that does not include any of the Existing Stockholders or any of their
respective Affiliates; or

 

(iv)          the
sale or Transfer by the DLJMB Stockholders to a prospective purchaser (other
than a Permitted Transferee) of fifty percent (50%) or more of their original
beneficial ownership of the Company.

 

“Control” and “Controlled” mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise.

 

“Consolidated EBITDA” means Consolidated EBITDA as
defined pursuant to that certain Credit Agreement, dated as of June 15,
2007, by and between the Company, STR Acquisition, Inc. the Lenders (as
defined therein) and Credit Suisse, Cayman Islands Branch, as it may be amended
or restated from time to time.

 

“Consolidated Net Debt” means (i) any
Indebtedness of the Company and its subsidiaries minus (ii) the Company’s
and its subsidiaries’ cash on hand and in banks, and any liquid investments
readily convertible to cash, excluding any cash held in escrow or otherwise
restricted.

 

4

 

“DLJMB Stockholders” means DLJ Merchant Banking
Partners IV, L.P., DLJMB Offshore Partners IV, L.P., DLJ Merchant Banking
Partners IV (Pacific), L.P. and MBP IV Plan Investors, L.P., DLJ Merchant Banking
Partners IV (Co-Investments), L.P., together with any Permitted Transferees
thereof.

 

“Equity Valuation” means, with respect to a
particular Fiscal Year, (i) the product of (A) ten (10) and (B) the
Consolidated EBITDA for such Fiscal Year, less (ii) Consolidated Net Debt
as of the end of such Fiscal Year.

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

 

“Existing Stockholders” means each of the
Stockholders other than the Management Stockholders.

 

“Fiscal Year” means the twelve month period ending
on the last day of each calendar year.

 

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

 

“Indebtedness” means, without duplication, the sum
of:  (i) all principal and accrued
(but unpaid) interest owing by the Company and its subsidiaries for debt for
borrowed money owed to any third party (specifically excluding intercompany
debt between the Company and any of its subsidiaries and any subsidiary of the
Company and another subsidiary of the Company); plus (ii) all obligations
of the Company and its subsidiaries under leases that have been recorded as
capital leases under GAAP; plus (iii) indebtedness of any person other
than the Company or any of its subsidiaries that is guaranteed by the Company
or any of its subsidiaries.

 

“Initial Public Offering” means the underwritten
initial public offering of Common Stock of the Company pursuant to an effective
registration statement filed under the Securities Act.

 

“Management Stockholder” means any Stockholder who
is an employee of the Company or any of its subsidiaries.  In no event shall any DLJMB Stockholder be
deemed to be a Management Stockholder.

 

“Other Stockholder” means each of the Stockholders
other than the DLJMB Stockholders, the Management Stockholders and the Whitney
Stockholders.

 

“Performance Target” means the Equity Valuation
target for each Fiscal Year as set forth on Schedule I hereto with respect to
Performance Vesting Restricted Shares.

 

“Permitted Transferees” means (i) in the case
of any DLJMB Stockholder, (A) any other DLJMB Stockholder, (B), any actual
or prospective shareholder, member or general or limited partner of any DLJMB
Stockholder (a “DLJMB Partner”), and any corporation, partnership, limited
liability company, or other entity that is an Affiliate of any DLJMB Partner
(collectively, “DLJMB Affiliates”), (C) any managing director, general
partner, director, limited partner, officer or employee of any DLJMB
Stockholder or any DLJMB Affiliate, or any spouse, lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing persons described in this clause (C) (collectively,
“DLJMB Associates”) or (D) any trust the beneficiaries of which, or any
corporation, limited liability company or partnership the stockholders, members
or general or limited 

 

5

 

partners of which, include
only such DLJMB Stockholders, DLJMB Affiliates, DLJMB Associates, their spouses
or other lineal descendants;

 

(ii)           in
the case of any Other Stockholder, (A) any entity that is an Affiliate of
such Other Stockholder, (B) any actual or prospective shareholder, member
or general or limited partner of any such Other Stockholder, and any
corporation, partnership, limited liability company, or other entity that is an
Affiliate of any such Other Stockholder, (C) any spouse, lineal
descendant, sibling, parent, heir, executor, administrator, testamentary
trustee, legatee or beneficiary of such Other Stockholder, or (D) a trust
that is for the exclusive benefit of such Other Stockholder or its Permitted
Transferees under clause (B) above;

 

(iii)          in
the case of any Whitney Stockholders, any other Whitney Stockholder; and

 

(iv)          in
the case of any Management Stockholder, (A) any spouse, lineal descendant,
sibling, parent, heir, executor, administrator, testamentary trustee, legatee
or beneficiary of the Holder, (B) a trust that is for the exclusive
benefit of the Holder or the transferees listed in (A) above or (C) 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 (A) above.

 

“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.

 

“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of November 6, 2009, 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.

 

“Stockholder” means each Person who held Common
Stock of the Company prior to the Initial Public Offering together with any
Permitted Transferees thereof, so long as such Person or Permitted Transferee
thereof holds such Common Stock.

 

“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.

 

“Whitney Stockholder” means Prairie Fire Trust,
Michael R. Stone, Michael R. Stone 2008 GRAT, MRS Trust, Harrington Sound, LLC
and Paul Vigano.

 

“Yearly Amount” means the number of Performance
Vesting Restricted Shares divided by three (3).

 

6

 

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 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.

 

7

 

(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]

 

8

 

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                            ]

  

 

9

 

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 

 

A-1

 

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.

 

 

SCHEDULE
I

 

Restricted
Stock Performance Target Calculation

 

	
   

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  EBITDA

  	
   

  	
  $

  	
  66.6

  	
   

  	
  $

  	
  82.3

  	
   

  	
  $

  	
  103.5

  	
   

  
	
  EV
  / EBITDA Multiple

  	
   

  	
  10.0

  	
  x

  	
  10.0

  	
  x

  	
  10.0

  	
  x

  
	
  Enterprise
  Value

  	
   

  	
  $

  	
  665.6

  	
   

  	
  $

  	
  823.1

  	
   

  	
  $

  	
  1,034.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:
  Net Debt on Balance Sheet

  	
   

  	
  (235.9

  	
  )

  	
  (225.9

  	
  )

  	
  (206.4

  	
  )

  
	
  Value
  of Common Equity

  	
   

  	
  $

  	
  429.8

  	
   

  	
  $

  	
  597.3

  	
   

  	
  $

  	
  828.1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Performance
  Threshold

  	
   

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Performance Target

  	
   

  	
  $

  	
  365.3

  	
   

  	
  $

  	
  507.7

  	
   

  	
  $

  	
  703.8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]