Exhibit 10.19
EXECUTION COPY
ADVISORY SERVICES AND MONITORING
AGREEMENT
EVERGREEN CAPITAL PARTNERS,
LLC
This Advisory Services and
Monitoring Agreement (this “ Agreement ”) is
entered into as of June 15, 2007, by and among Specialized
Technology Resources, Inc. (the “ Company ”) and
Evergreen Capital Partners, LLC (“ Evergreen
”).
WHEREAS , pursuant to an Amended and Restated Agreement
and Plan of Merger, dated as of June 15, 2007, by and among the
Company, STR Holdings LLC (as successor to STR Holdings, Inc.)
(“ Holdings ”) and STR Acquisition, Inc., a
wholly-owned subsidiary of Holdings (“ Mergerco
”), Mergerco merged with and into the Company with the
Company being the surviving entity (the “ Merger
”);
WHEREAS , in connection with the Merger, Evergreen has
provided to Holdings advice and analysis, including assistance with
due diligence and other investigatory matters related to the
Company; and
WHEREAS , Evergreen is specially skilled in corporate
finance, strategic corporate planning, and other management skills
and advisory and business monitoring services;
WHEREAS , Holdings, the Company and subsidiaries of the
Company (collectively, the “ Company Group ”)
will require such advice and analysis from Evergreen in connection
with their business operations and execution of their strategic
plan; and
WHEREAS , Evergreen is willing to provide such advice
and analysis to the Company and the other members of the Company
Group and the Company desires to retain Evergreen with respect to
the services described herein.
NOW, THEREFORE
, in consideration of the mutual
covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1.
Appointment.
(a)
The Company hereby appoints
Evergreen, or its respective designees, on a non-exclusive basis,
as one of its advisors with respect to the following services to
the extent appropriate and requested by the Company or any member
of the Company Group: (i) assisting the Company or any member
of the Company Group in analyzing its operations and historical
performance; (ii) assisting the Company or any member of the
Company Group in analyzing future prospects; (iii) assisting the
Company or any member of the Company Group with respect to future
proposals for tender offers, acquisitions, sales, mergers,
financings, exchange offers, recapitalizations, restructurings or
other similar transactions that may be consummated during the term
of this Agreement; and (iv) providing financial and business
monitoring services, including with respect to assisting the
Company or any member of the Company Group in preparing a strategic
plan.
(b)
Evergreen does not make any
representations or warranties, express or implied, in respect of
the services to be provided by Evergreen or its designee hereunder.
In no event shall Evergreen or its respective affiliates be liable
to any member of the Company Group
or any of their respective affiliates for any
act, alleged act, omission or alleged omission that does not
constitute gross negligence or willful misconduct of Evergreen or
its designees as determined by a final, non-appealable
determination of a court of competent jurisdiction.
(c)
Evergreen shall devote such time and
efforts to the performance of services contemplated hereby as
Evergreen reasonably deems necessary or appropriate;
provided , however , that no minimum number of hours
is required to be devoted by Evergreen on a weekly, monthly, annual
or other basis. The Company acknowledges that Evergreen’s
services are not exclusive to the Company or any other members of
the Company Group and that Evergreen may render similar services to
other persons and entities.
(d)
Upon the request of Holdings,
Evergreen shall appoint up to two (2) members to serve on the board
of directors of Holdings. Neither Evergreen nor its appointees
shall be entitled to any additional compensation with respect
thereto.
2.
Term and
Termination.
(a)
This Agreement shall continue in
full force and effect until terminated by either party upon thirty
(30) days prior written notice.
(b)
This Agreement shall automatically
terminate if, at any time after Evergreen initially appoints a
member to serve on the board of directors of Holdings, no members
or executive officers of Evergreen continue to serve on the board
of directors of Holdings.
(c)
The terms and provisions of
Sections 1(b) , 2 , 4 , and 5
shall survive any termination of this Agreement.
3.
Payment of Fees.
(a)
In consideration of the advisory
services provided by Evergreen in connection with the Merger, the
Company shall pay Evergreen a fee in the amount of
$1,436,382.
(b)
In consideration of the ongoing
advisory services to be provided by Evergreen to the Company and
any other member of the Company Group, the Company will pay to
Evergreen (or any of its respective designees), an annual advisory
fee in an amount equal to $150,000 as set forth below (the “
Monitoring Fee ”). The Monitoring Fee shall be payable
quarterly in advance on the first business day of each calendar
quarter (January 1, April 1, July 1 and October 1) and shall
continue through (but not beyond) the date of termination of this
Agreement; provided, that a portion of the Monitoring Fee shall be
paid for the period from the date of Merger through June 30, 2007.
If this Agreement is terminated pursuant to Section 2(a) ,
any unearned portion of the Monitoring Fee will be reimbursed to
the Company by Evergreen.
(c)
All payments and reimbursements made
pursuant to Sections 2 , 3 and 4 will be paid
by wire transfer of immediately available U.S. Dollars to an
account specified by the party to whom such payment or
reimbursement is owed in writing to the Company.
4.
Indemnification.
The Company shall indemnify and hold
harmless Evergreen, its affiliates, and its respective directors,
officers, controlling persons (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20(a) of
the
2
Securities Exchange Act of 1934, as amended), if
any, agents and employees (Evergreen, its affiliates, and such
other specified persons being collectively referred to as “
Indemnified Persons ,” and individually as an “
Indemnified Person ”) from and against any and all
claims, liabilities, losses, damages and expenses incurred by any
Indemnified Person (including those arising out of an Indemnified
Person’s negligence and reasonable fees and disbursements of
the respective Indemnified Person’s counsel) that
(A) are related to or arise out of (i) actions taken or
omitted to be taken (including, without limitation, any untrue
statements made or any statements omitted to be made) by any member
of the Company Group or (ii) actions taken or omitted to be
taken by an Indemnified Person with the consent of any member of
the Company Group or in conformity with the instructions of any
member of the Company Group or the actions or omissions of the
Company Group or (B) are otherwise related to or arise out of
Evergreen’s engagement, and will reimburse each Indemnified
Person for all costs and expenses, including, without limitation,
reasonable fees and disbursements of any Indemnified Person’s
counsel, as they are incurred, in connection with investigating,
preparing for, defending or appealing any action, formal or
informal claim, investigation, inquiry or other proceeding, whether
or not in connection with pending or threatened litigation, caused
by or arising out of or in connection with Evergreen’s acting
pursuant to Evergreen’s engagement, whether or not any
Indemnified Person is named as a party thereto and whether or not
any liability results therefrom. The Company will not, however, be
responsible for any claims, liabilities, losses, damages or
expenses pursuant to clause (B) of the preceding sentence that have
resulted primarily from either Evergreen’s bad faith, gross
negligence or willful misconduct. The Company also agrees that
neither Evergreen nor any other Indemnified Person shall have any
liability to the Company or any member of the Company Group for or
in connection with such engagement except for any such liability
for claims, liabilities, losses, damages or expenses incurred by
the Company or any member of the Company Group that have resulted
primarily from Evergreen’s bad faith, gross negligence or
willful misconduct. The Company further agrees that it will not,
without the prior written consent of Evergreen, settle or
compromise or consent to the entry of any judgment in any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim,
action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of Evergreen and each
other Indemnified Person hereunder from all liability arising out
of such claim, action, suit or proceeding. THE COMPANY HEREBY
ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO
ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF
EVERGREEN OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity
shall be in addition to any rights that Evergreen and/or any other
Indemnified Person may have at common law or otherwise and shall
remain in full force and effect following the completion or any
termination of the engagement.
It is understood that, in connection
with the Evergreen’s engagement, Evergreen may also be
engaged to act for the Company in one or more additional
capacities, and that the terms of this engagement or any such
additional engagement(s) may be embodied in one or more separate
written agreements. This indemnification shall apply to
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