SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO 13D-2(A)
(AMENDMENT NO. 1) 1
Advanced Lighting Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
00753C 10 2
-----------------
(CUSIP Number)
Alan J. Ruud
9201 Washington Avenue
Racine, Wisconsin 53406
(414) 886-1900
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
March 15, 2000
----------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 11 Pages)
____________
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
CUSIP No. 00753C 10 2 13D Page 2 of 11 Pages
- ------------------------- ------- ---
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alan J. Ruud
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES 3,647,134
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 2,149,991
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,647,134
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
17.9%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 00753C 10 2 13D Page 3 of 11 Pages
- ------------------------- ------- ---
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donald Wandler (as a member of the Voting Trust group)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 571,429
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
571,429
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
2.8%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 00753C 10 2 13D Page 4 of 11 Pages
- ------------------------- ------- ---
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Theodore O. Sokoly (as a member of the Voting Trust group)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 142,857
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
142,857
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
0.7%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 00753C 10 2 13D Page 5 of 11 Pages
- ------------------------- ------- ---
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Christopher A. Ruud (as a member of the Voting Trust group)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 428,571
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
428,571
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
2.1%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 00753C 10 2 13D Page 6 of 11 Pages
- ------------------------- ------- ---
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cynthia A. Johnson (as a member of the Voting Trust group)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 354,286
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
354,286
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
1.7%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 00753C 10 2 13D Page 7 of 11 Pages
- ------------------------- ------- ---
ITEM 2. IDENTITY AND BACKGROUND
-------------------------
Item 2 is amended by adding the following information:
This Amendment No. 1 to Schedule 13D is filed on behalf of certain
individuals identified below (the "Reporting Persons") who, pursuant to Rule
13d-5(b)(1), may be deemed as a group to have acquired beneficial ownership of
the Common Stock of the Company as a result of such individuals becoming
signatories to the Voting Trust Agreement, dated as of January 2, 1998, among
the Reporting Persons.
Although the Reporting Persons are making this joint filing, neither
the fact of this filing nor anything contained herein shall be deemed to be an
admission by the Reporting Persons that a group exists within the meaning of the
Act.
On October 1, 1999, the Reporting Persons entered into an Amended and
Restated Voting Trust Agreement. All references in the Schedule 13D to the
"Voting Trust" shall be to the Amended and Restated Voting Trust Agreement,
dated as of October 1, 1999.
The Amended and Restated Voting Trust Agreement authorizes Alan J.
Ruud, as the Voting Trustee, to execute and deliver an irrevocable proxy with
respect to the shares subject to the Voting Trust to General Electric Company or
its designee ("GE"). See Item 6 below.
In June 1999, Alan J. Ruud was appointed to the additional positions
of President and Chief Operating Officer of the Company.
<PAGE>
CUSIP No. 00753C 10 2 13D Page 8 of 11 Pages
- ------------------------- ------- ---
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
-----------------------------------------
Item 5 is amended by adding the following information:
Although each Reporting Person disclaims beneficial ownership of any
shares of Common Stock beneficially owned by each other Reporting Person,
pursuant to the Exchange Act and regulations thereunder the Reporting Persons
may be deemed as a group to have acquired beneficial ownership of 1,497,143
shares of Common Stock, the aggregate number of shares of Common Stock which are
subject to the terms of the Voting Trust, representing approximately 7.3% of the
outstanding Common Stock as of January 20, 2000. Mr. Alan J. Ruud also owns
2,149,991 shares of Common Stock not subject to the Voting Trust.
Each person named in response to Item 2 hereof has, as of March 15,
2000 sole or shared power to vote or to direct the vote and sole or shared power
to dispose or to direct the disposition of Common Stock as follows:
Alan J. Ruud. Mr. Ruud has the sole power to vote 3,647,134 shares of
Common Stock and the sole power to dispose of 2,149,991 shares of Common Stock,
which constitutes approximately 17.9% of the outstanding Common Stock in the
aggregate.
Donald Wandler. Mr. Wandler has the sole power to dispose of 571,429
shares of Common Stock, which constitutes approximately 2.8% of the outstanding
Common Stock.
Theodore O. Sokoly. Mr. Sokoly has the sole power to dispose of
142,857 shares of Common Stock, which constitutes approximately 0.7% of the
outstanding Common Stock.
Christopher A. Ruud. Mr. Ruud has the sole power to dispose of
428,571 shares of Common Stock, which constitutes approximately 2.1% of the
outstanding Common Stock.
Cynthia A. Johnson. Ms. Johnson has the sole power to dispose of
354,286 shares of Common Stock, which constitutes approximately 1.7% of the
outstanding Common Stock.
<PAGE>
CUSIP No. 00753C 10 2 13D Page 9 of 11 Pages
- ------------------------- ------- ---
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
------------------------------------------------------------------
RESPECT TO SECURITIES OF THE ISSUER
----------------------------------------
Item 6 is amended by adding the following information:
Alan J. Ruud has entered into a Contingent Warrant Agreement, dated as
of September 30, 1999, and an Option Agreement, dated as of September 30, 1999,
which give GE the right, upon the occurrence of certain events, to vote the
shares of Common Stock held by Mr. Ruud, to vote the shares of Common Stock held
in the Voting Trust and to purchase certain of the shares of Common Stock held
by Mr. Ruud.
If the Company fails to maintain a 2.0 to 1 ratio of EBITDA (as
defined in the Contingent Warrant Agreement) to Interest Expense (as defined in
the Contingent Warrant Agreement) twice over certain measurement periods, then,
subject to certain conditions, GE would have the option, at the then current
market price, to purchase from Alan J. Ruud and Wayne R. Hellman the number of
shares of Common Stock which, together with the shares owned by GE, would
represent 25% of the voting power of the Company. GE's options are exercisable
until the later of (i) one-year from the date of receipt of a certificate
evidencing the Company's failure to maintain the required ratio, and (ii) the
close of business of the 30th day following receipt of all governmental and
regulatory approvals necessary in connection with GE's exercise of the options.
GE may not exercise its options for less than all of the option shares and only
for an equal number of shares from Mr. Ruud and Mr. Hellman.
If the Company fails to maintain a 2.0 to 1 ratio of EBITDA to
Interest Expense three times over certain measurement periods, then, subject to
certain conditions, GE would receive the right to vote the shares of Common
Stock then owned by Alan J. Ruud, and the shares of Common Stock as to which Mr.
Ruud then has voting power pursuant to the Voting Trust. Mr. Ruud has granted
an irrevocable proxy to GE pursuant to this agreement.
Mr. Ruud has also granted to GE a first refusal right on any future
sale of his shares of Common Stock.
The foregoing discussion is qualified in its entirety by reference to
the complete text of the agreements entered into by Mr. Ruud with GE, which have
been filed as exhibits to this Schedule 13D.
<PAGE>
CUSIP No. 00753C 10 2 13D Page 10 of 11 Pages
- ------------------------- ------- ---
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
--------------------------------------
(Exhibit 1) Amended and Restated Voting Trust Agreement, dated as of October
1, 1999.
(Exhibit 2) Contingent Warrant Agreement, dated as of September 30, 1999.
(Exhibit 3) Form of Irrevocable Proxy.
(Exhibit 4) Option Agreement, dated as of September 30, 1999.
(Exhibit 5) Right of First Refusal and Co-Sale Agreement, dated as of
September 30, 1999.
<PAGE>
CUSIP No. 00753C 10 2 13D Page 11 of 11 Pages
- ------------------------- ------- ---
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: March 15, 2000
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
/s/ Donald Wandler
--------------------
Donald Wandler
/s/ Theodore O. Sokoly
-------------------------
Theodore O. Sokoly
/s/ Christopher A. Ruud
--------------------------
Christopher A. Ruud
/s/ Cynthia A. Johnson
-------------------------
Cynthia A. Johnson
AMENDED AND RESTATED VOTING TRUST AGREEMENT
THIS AMENDED AND RESTATED VOTING TRUST AGREEMENT, dated as of
October 1, 1999, is made and entered into among Alan J. Ruud, as voting trustee
(the "Voting Trustee") of the voting trust created by this Agreement, and such
owners of common stock, $.001 par value, of ADVANCED LIGHTING TECHNOLOGIES,
INC., an Ohio corporation (the "Company") whose names are listed on Exhibit A
attached hereto (hereinafter sometimes separately referred to as a "Shareholder"
and collectively as the "Shareholders").
RECITALS
A. The Voting Trustee and the Shareholders desire to amend and
restate in its entirety the Voting Trust Agreement dated as of January 2, 1998,
as amended, among the Voting Trustee and the Shareholders.
B. The Shareholders desire that all of their shares of common
stock, par value $.001 per share, of the Company, set forth opposite their names
on Exhibit A hereto and any other shares delivered to the Voting Trustee
pursuant to section 1(a) at the option of any Shareholder (collectively the
"Shares") be made subject to the terms and conditions of this Agreement. The
Shareholders acquired the Shares pursuant to the Stock Purchase Agreement, dated
as of December 19, 1997 (the "Stock Purchase Agreement"), among the Company,
Ruud Lighting, Inc., a Wisconsin corporation ("RLI"), and the Voting Trustee and
the Shareholders as shareholders of RLI.
C. The Shareholders deem this Agreement to be in the best interest
of the Company and all of the Shareholders.
AGREEMENTS
In consideration of the recitals and the mutual agreements herein
contained, the parties agree as follows:
1. Deposit of Voting Shares; Issuance of Voting Trust
---------------------------------------------------------
Certificates.
- ------------
(a) The Shareholders will (i) promptly deposit with the
Voting Trustee the certificate(s) evidencing all of the Shares owned by each
such Shareholder (the "Share Certificates") duly endorsed for transfer to the
Voting Trustee or accompanied by proper instruments duly executed to effect the
transfer of such Shares to the Voting Trustee, and will accept in exchange
therefor a Voting Trust Certificate representing the number of Shares deposited
by such Shareholder; or (ii) deliver to the
<PAGE>
Voting Trustee a duly executed irrevocable proxy, substantially in the form of
Exhibit B (a "Shareholder Proxy") with respect to any shares which are "Pledged
Shares," as defined in Section 7(e).
(b) Upon receipt of the Share Certificates pursuant to
subsection (a)(i) of this Section, the Voting Trustee shall cause to be issued
and delivered to each Shareholder a Voting Trust Certificate, substantially in
the form of Exhibit C hereto with the blanks therein appropriately completed,
representing the number of Shares evidenced by the Share Certificates deposited
by each Shareholder. Voting Trust Certificates issued upon the transfer of, in
exchange for, or in addition to such Voting Trust Certificates, as provided in
this Agreement, shall be substantially in the form attached hereto as Exhibit C
with such appropriate variations, omissions, and insertions as may be required.
2. Issuance of Voting Shares to the Voting Trustee. The Voting
--------------------------------------------------
Trustee shall cause all Share Certificates deposited with him pursuant to
Section 1 above to be surrendered to and canceled by the Company, and shall
cause the Company to issue and deliver to the Voting Trustee new share
certificates representing the Shares in the name of the Voting Trustee, as
voting trustee, which shall contain a legend stating that the Share Certificates
are issued pursuant and subject to the provisions of this Agreement. The
Company's stock ledger and journal shall indicate that such share certificates
are subject to the provisions of this Agreement. Except as herein provided, all
share certificates issued and delivered to the Voting Trustee pursuant to this
Section 2 shall at all times be and remain in the possession of the Voting
Trustee or a depository designated by the Voting Trustee. The Voting Trustee
shall not transfer any certificates representing Shares other than as provided
in this Agreement.
3. Records of Voting Trust Certificates.
----------------------------------------
(a) Records. The Voting Trustee shall keep or cause to be
-------
kept books of record of all Voting Trust Certificates issued pursuant to this
Agreement, and shall also fix and determine a place at which such books of
record shall be kept and at which Voting Trust Certificates may be transferred.
(b) Inspection of Records of Voting Trust Certificates. Any
---------------------------------------------------
owner of a Voting Trust Certificate shall have the right to inspect the books of
record of the Voting Trust Certificates to be maintained by the Voting Trustee
pursuant to Section 3(a) at the place at which such records are kept at any
reasonable time.
2
<PAGE>
4. Transfer of Voting Trust Certificates.
-----------------------------------------
(a) Voting Trust Certificates may be transferred pursuant to
this Section 4 provided that (i) such transfer is made in accordance with any
restrictions on transfer applicable to the Shares represented by the Voting
Trust Certificates, including, without limitation, any restrictions on transfer
of the Shares under the Stock Purchase Agreement, and (ii) such transfer is
either registered or exempt from registration under the Securities Act of 1933,
as amended.
(b) All permitted transfers of Voting Trust Certificates
shall be recorded on the books of record kept by the Voting Trustee. The Voting
Trustee may treat the record holder of the respective Voting Trust Certificates
as the absolute owner thereof for all purposes whatsoever and shall not be bound
to recognize any equitable interest in or claim to any such Voting Trust
Certificate or the Shares represented thereby on the part of any other party
until transferred on such books of record. The Voting Trustee shall not be
required to make any transfer of a Voting Trust Certificate upon such books of
record except upon surrender of a Voting Trust Certificate to be transferred,
properly assigned in such form as shall acceptable to the Voting Trustee,
accompanied by such evidence as the Voting Trustee may reasonably require as to
the authority of any person other than the record holder thereof who may seek to
effect such transfer and as to the genuineness of the appropriate signatures.
Upon each such transfer, the Voting Trust Certificates surrendered for transfer
shall be canceled and the Voting Trustee shall issue a new Voting Trust
Certificate to the transferee and the transferee shall, by acceptance thereof,
assent to the terms and conditions of this Agreement. Any such transferee shall
be required to execute a supplemental copy of this Agreement.
(c) Replacement of Voting Trust Certificates. In the event any
-------------------------------------------
Voting Trust Certificate shall become mutilated, lost, or destroyed, the Voting
Trustee, under such conditions with respect to indemnity or otherwise as he, in
his discretion, may prescribe, may provide for the issuance of a new Voting
Trust Certificate in lieu of such lost or destroyed Voting Trust Certificate or
in exchange for such mutilated Voting Trust Certificate.
5. Powers and Duties of Voting Trustee.
----------------------------------------
(a) Right to Vote. The Voting Trustee shall be entitled to
---------------
exercise all shareholder rights of the Shareholders in respect of the Shares,
including, but not limited to, the right to exercise voting rights of such
Shares on each matter submitted to the Company's shareholders for their vote,
consent, waiver, release, or other action and the right to take part in any
corporate or shareholders' action of the Company, whether ordinary or
extraordinary, by proxy or otherwise. The right of the Voting Trustee to
exercise the voting rights of the Shares in accordance with the terms hereof
includes, but
3
<PAGE>
is not limited to, the exercise of voting rights relating to fixing the number
and the election of directors of the Company, the changing of the Company's
capital structure, the amendment of the Company's Articles of Incorporation or
Code of Regulations, the reclassification of the Shares, the purchase of assets
by the Company, and the merger, consolidation, liquidation or dissolution of the
Company. The Voting Trustee shall also have the power to execute and deliver an
irrevocable proxy (the "GE Proxy") with respect to any Shares, including any
Pledged Shares, to General Electric Company, its successors and assigns ("GE"),
or the designee of GE (the "GE Proxyholder").The owners of Voting Trust
Certificates shall not have any right under such Voting Trust Certificates or
under this Agreement or otherwise, to exercise the voting rights of such Shares
or to take part in any corporate or shareholders' action or to do or perform any
act or thing that shareholders of the Company are now or may hereafter become
entitled to do or to perform, for so long as the Shares owned by each such
Shareholder are held by the Voting Trustee, except to receive cash dividends and
distributions when declared and paid and to review the books and records of the
Company during normal business hours. Notwithstanding anything to the contrary,
the Voting Trustee shall not have the right to sell or otherwise transfer any of
the Shares.
(b) Discretion of Voting Trustee. In exercising the voting
------------------------------
rights of the Shares, or in doing any act with respect to the control or
management of the Company or its affairs, or otherwise acting hereunder, the
Voting Trustee shall be free to exercise his full discretion and, if the Voting
Trustee executes and delivers an irrevocable proxy pursuant to subsection (a) of
this Section, the GE Proxyholder shall be free to exercise its full discretion.
Notwithstanding anything to the contrary, the Voting Trustee shall not have the
right to sell or otherwise transfer any of the Shares.
(c) Acting as Director or Officer. The Voting Trustee and
--------------------------------
the GE Proxyholder, or any representative of either of them, may act as a
director, an officer or an employee of the Company and may vote for himself as
such and may have an ownership interest in the Company. The Voting Trustee and
the GE Proxyholder, or any person with whom or which either of them may be
associated, or any entity of which any such person may be a member, or any
corporation of which any such person may be a shareholder, director, or officer,
may contract with the Company or otherwise have a financial interest in any
matter or transaction to which the Company may be a party or in which the
Company may be in any way concerned, as though he were not Voting Trustee or the
GE Proxyholder, but otherwise subject to law.
(d) Compensation. The Voting Trustee shall serve without
------------
compensation. The Voting Trustee shall be reimbursed for all reasonable
expenses, disbursements and advances incurred or made by the Voting Trustee in
performance of his duties hereunder. The owners of the Voting Trust
Certificates agree to reimburse and indemnify the Voting Trustee for all
reasonable claims, expenses, and liabilities incurred
4
<PAGE>
by him in connection with the discharge of his duties under this Agreement. Any
such claims, expenses, or liabilities shall be charged to the Voting Trust
Certificate owners, pro rata, and may be deducted from dividends or other
distributions to them, or may be made a charge payable as a condition to the
delivery of Share Certificates following the surrender to the Voting Trustee of
the Voting Trust Certificates, and the Voting Trustee shall be entitled to a
lien therefor on the Shares, funds, or other property in his possession. The
Voting Trustee shall disclose in reasonable detail on an annual basis, all
reimbursements received for reasonable expenses, disbursements, advances
incurred or made by the Voting Trustee in performance of his duties hereunder.
(e) Immunities of the Voting Trustee. The Voting Trustees
-----------------------------------
shall incur no responsibility in his capacity as voting trustee, as a
shareholder, or otherwise, by reason of any error of judgment or mistake of law
or other mistake, for any act or omission of any agent or attorney, for any
misconstruction of this Agreement, or for any action of any sort taken or
omitted hereunder or believed by him to be in accordance with the provisions and
intent hereof or otherwise, except solely for his own individual willful
misconduct. In the discharge of his duties hereunder, the Voting Trustee shall
be fully protected in acting in reliance upon any instrument, document, or paper
believed by him to be genuine and to have been executed by the proper parties;
and, shall likewise be fully protected in issuing any Voting Trust Certificate
or in taking or refraining from taking any action hereunder in reliance upon any
certificate or certificates purporting to be duly signed, as to the existence or
non-existence of any fact or facts or the performance or non-performance of any
act or acts. and may accept as conclusive any statement made in any such
certificate. The Voting Trustee shall not be required to give bond or security
for the discharge of his duties under this Agreement. The Voting Trustee, may
in his discretion, consult with counsel to be select by him and shall incur no
liability in respect of any action taken on the advice of any such counsel.
(f) Dividends. The record owner of each Voting Trust
---------
Certificate shall be entitled to receive his pro rata share of any dividends
paid or distributed by the Company upon the Shares represented by the Voting
Trust Certificates and all other corporate distributions made by the Company in
respect of such Shares; provided, however, that, if any such dividend or
distribution includes shares of capital stock of the Company with voting rights,
the certificates representing such shares of stock shall be deposited with the
Voting Trustee subject to the terms of this Agreement, and the owner of the
Voting Trust Certificate evidencing the Shares upon which such dividend or
distribution is made shall entitled to receive new Voting Trust Certificates
representing such newly-deposited shares of capital stock with voting rights.
The record date fixed by the Company for the purpose of the payment of
any dividend or for the making of any other distribution shall be the record
date for the purpose of payment distribution to the owners of Voting Trust
Certificates, and whenever
5
<PAGE>
any such record date shall be fixed, the owners of record of Voting Trust
Certificates at the date so fixed shall exclusively be entitled to participate
in the payment or distribution. Upon receipt by the Voting Trustee of any
dividend or other distribution in respect of any Shares held by the Voting
Trustee, the Voting Trustee shall promptly distribute the funds or property so
received by him to the owners of Voting Trust Certificates to whom such funds or
property should have been distributed by the Company if the foregoing provisions
hereof had been observed.
Notwithstanding the foregoing provisions of this Section 5, if the
Company shall reclassify its Shares, reorganize, sell all or substantially all
of its assets with or without dissolution, consolidate with or merge into
another corporation, or if another corporation shall merge into the Company, the
shares of capital stock into which the Shares then on deposit hereunder shall be
reclassified and any shares of capital stock issued in exchange or substitution
for the Shares then on deposit hereunder shall, if they are a non-voting shares,
be distributed in accordance with the provisions of this Agreement directly to
the record owners of outstanding Voting Trust Certificates, issued in respect of
such Shares; or, if they are voting shares, they shall become subject to the
terms and conditions of this Agreement as if such voting shares had been
originally deposited hereunder, and shall be deposited with the Voting Trustee,
and the owner of outstanding Voting Trust Certificates shall be entitled to
receive new Voting Trust Certificates representing such newly deposited shares
of capital stock with voting rights.
(g) Deductions for Distributions. There shall be deducted
------------------------------
and withheld from every distribution of every kind under this Agreement any
taxes, assessments, or other charges that may be required by law to be deducted
or withheld, as well as expenses and charges incurred pursuant to Section 5(e),
to the extent that the expenses and charges remain unpaid or unreimbursed.
6. Resignation of Voting Trustee.
--------------------------------
(a) Resignation of Voting Trustee. The Voting Trustee may at
-----------------------------
any time resign by delivering to (i) the owners of the Voting Trust Certificates
and Pledged Shares and (ii) GE, his resignation in writing, to take effect not
less than ten days after delivery. Such notice of resignation shall specify the
time and manner of delivery of certificates representing Shares following the
surrender and cancellation of the respective Voting Trust Certificates as
described in Section 7(c) below. Promptly following the effectiveness of such
resignation, the Voting Trustee shall transfer any property held by the Voting
Trustee to the successor Voting Trustee.
(b) Death or Disability of Voting Trustee. The rights and
----------------------------------------
duties of the Voting Trustee shall terminate on his death or disability and no
interest in any of the property owned or held hereunder nor any of the rights or
duties of the Voting Trustee
6
<PAGE>
may be transferred by will, devise, succession, or in any manner, except as
provided in this Agreement. The heirs, administrators, and executors of the
Voting Trustee shall, however, have the right and absolute duty to convey any
property held by the Voting Trustee to the successor Voting Trustee, if any, or
to the Shareholders promptly upon termination of this Agreement. For purposes
of this Agreement, disability shall mean the inability of the Voting Trustee to
perform satisfactorily his duties hereunder for a period of 120 days in the
aggregate out of 150 consecutive days as a result of a physical or mental
illness or other disability, which, in the written opinion of a physician of
recognized ability and reputation, makes it highly likely that such illness or
disability will continue for a significant period of time.
(c) Successor Voting Trustee. If, for any reason, the Voting
------------------------
Trustee ceases to be Voting Trustee, a successor Voting Trustee shall be
designated by GE. If GE fails to designate a successor Voting Trustee, of if
such successor fails to accept the rights and duties of the Voting Trustee,
within 45 days of notice of the death, disability, or resignation of the Voting
Trustee, the Shareholders owning a majority of the Shares may designate the
successor Voting Trustee. If the Shareholders fail to so designate a successor
Voting Trustee within 60 days following notice of death, disability or
resignation of the Voting Trustee, any Shareholder may petition any court of
competent jurisdiction in the County of Cuyahoga, State of Ohio for appointment
of a successor Voting Trustee. Upon acceptance of designation as successor
Voting Trustee, the successor Voting Trustee shall have all of the rights and
duties of the Voting Trustee hereunder.
7. Termination.
-----------
(a) Duration. Except as otherwise provided in Sections 7(b)
--------
and (c), this Agreement shall terminate on the earlier of: (i) January 1, 2008;
or (ii) the date upon which all of the Shares are acquired by the Company and/or
any shareholders of the Company that are not a party to this Agreement.
(b) Termination by Voting Trustee. This Agreement may, at
--------------------------------
any time, be terminated by the Voting Trustee with the prior written consent of
GE. Written notice of such termination shall be given by the Voting Trustee to
all of the owners of the outstanding Voting Trust Certificates and Pledged
Shares pursuant to the provisions of Section 8 of this Agreement. Such notice
shall specify the time and manner of delivery of certificates representing
Shares following the surrender and cancellation of the respective Voting Trust
Certificates and Shareholder Proxies as described in Section 7(d) below.
(c) Termination Upon Sale. Upon the transfer for value of
-----------------------
economic beneficial ownership of any Shares to anyone other than a Shareholder,
provided such Shares transferred are either registered or are exempt from
registration
7
<PAGE>
under the Securities Act of 1933, as amended, and such transfer is made in
accordance with any agreements entered into by the Company or the Shareholder
with any underwriters which may restrict the transfer of such Shares for certain
periods of time, such transferred Shares shall no longer be subject to this
Agreement.
(d) Obligations of Voting Trustee Upon Termination. Upon the
----------------------------------------------
termination of this Agreement or transfer of Shares pursuant to subsection (c)
of this Section, the owners of the Voting Trust Certificates shall surrender
their respective Voting Trust Certificates to the Voting Trustee or, upon the
Voting Trustee's death or disability, the Secretary of the Company who shall
deliver to the Company the certificates representing Shares, and the Secretary
of the Company shall then issue or caused to be issued certificates representing
the Shares to the appropriate respective owners of the Voting Trust
Certificates. If, at the expiration of four months after termination of this
Agreement, any Voting Trust Certificate shall not have been surrendered to the
Voting Trustee he may, in his discretion, and if acceptable to the Secretary of
the Company, deliver the certificates representing such Shares to the Secretary
of the Company to be held by the Company for the owners of any such Voting Trust
Certificates to be delivered to such owners upon surrender of their respective
Voting Trust Certificates, whereupon all responsibilities of the Voting Trustee
with respect thereto shall cease; provided, however, if the Voting Trustee shall
have died or become disabled, the shares shall be held by the Company for the
owners of any such Voting Trust Certificates to be delivered to such owners upon
surrender of their respective Voting Trust Certificates whereupon all
responsibilities of the Company with respect thereto shall cease.
Notwithstanding the termination of this Agreement, the Voting Trustee or upon
the Voting Trustee's death or disability, the Secretary shall thereafter have
the power to take or cause to be taken such further and other action as he may
deem necessary or desirable to conclude promptly the duties imposed upon him in
this Agreement; provided however, that after the termination of this Agreement,
he shall have no authority to exercise any voting rights of the Shares.
(e) Pledging of Shares. Any of the Shareholders may pledge
--------------------
any portion of their respective Shares (the "Pledged Shares") to secure loans
("Loans") and such Pledged Shares shall not be subject to the restrictions
contained in this Agreement, provided that any such Shareholder executes and
delivers to the Voting Trustee a duly executed Shareholder Proxy. Upon the
repayment of such Loans and the cancellation of such pledge, the Pledged Shares
shall again be subject to the terms of this Agreement and the restrictions
contained in this Agreement and the Shareholder Proxy shall be terminated. In
connection with the pledging of Shares, the owners of the Voting Trust
Certificates shall surrender their Voting Trust Certificates to the Voting
Trustee or upon the Voting Trustee's death or disability, the Secretary of the
Company, who shall deliver to the Company the certificates representing the
Pledged Shares, and the Secretary of the Company shall issue or cause to be
issued certificates representing the Pledged Shares to the appropriate
respective owners of the Voting Trust Certificates to be delivered to such
owners upon surrender of 'their respective Voting Trust Certificates. Upon
repayment of
8
<PAGE>
the Loans and the cancellation of such pledge and the return of the Pledged
Shares to the Shareholder, such Shareholder shall immediately deliver the
Pledged Shares to the Voting Trustee in accordance with Section 1 of this
Agreement. The Voting Trustee or upon the Voting Trustee's death or disability,
the Secretary shall have the power to take or cause to be taken such further and
other action as he may deem necessary or desirable to conclude promptly the
duties imposed upon him in this Section; provided however, he shall have no
authority to exercise any voting rights of the Shares.
8. Notice.
------
(a) Notice to Owners of Voting Trust Certificates and Pledged
---------------------------------------------------------
Shares. All notices to be given to owners of Voting Trust Certificates and
Pledged Shares may be given by personally delivering or mailing the same to such
record owners at the last addresses furnished in writing by such owners to the
Voting Trustee, and any notice when so delivered or mailed shall be considered
as served on the respective owners of Voting Trust Certificates and Pledged
Shares.
(b) Notice to Voting Trustee. Any notice required or
---------------------------
permitted to be given hereunder to the Voting Trustee shall be given by
personally delivering or mailing the same to Alan J. Ruud, 9201 Washington
Avenue, Racine, Wisconsin 53406 or such other address as shall be in writing by
the Voting Trustee to the owners of Voting Trust Certificates and Pledged
Shares.
9. Payment of Taxes. If at any time any tax is payable by the
------------------
Voting Trustee in respect of the ownership of the Shares held by him or in
respect of any dividends, distributions, or other rights in respect of the
Shares, the tax may be paid out of any assets of the Voting Trust created by
this Agreement or any dividends or distributions received by the Voting Trustee;
provided, however, that the Voting Trustee shall be fully reimbursed by the
Shareholders, on a pro rata basis based upon Share ownership, for any such
payments by the Voting Trustee not satisfied out of the assets of the Trust or
dividends or distributions received by the Voting Trustee.
10. Amendment. If at any time, the Voting Trustee, with the prior
---------
written consent of GE shall deem it desirable to amend this Agreement in any
respect, he shall give notice of such proposed amendment to the owners of the
outstanding Voting Trust Certificates and Pledged Shares. Such amendment shall
become effective upon the written consent of the owners of a majority in
interest of the (i) outstanding Voting Trust Certificates based on the number of
Shares represented by such Voting Trust Certificates and (ii) the Pledged
Shares, or at a meeting of Shareholders. If the Voting Trustee deems it
desirable to have a meeting to approve any proposed amendment, the Voting
Trustee shall give notice, which shall be in writing and be given at least
fifteen (15) days prior to the proposed meeting, shall state that the purpose of
the meeting is to consider the
9
<PAGE>
amendment of this Agreement and shall be accompanied by a copy of the proposed
amendment. If at such meeting the proposed amendment or any modification
thereof shall be approved by the owners of a majority interest of the (i)
outstanding Voting Trust Certificates based on the number of Shares represented
by such Voting Trust Certificates and (ii) the Pledged Shares, a certificate to
that effect shall be made and verified by a Secretary elected at such meeting
and filed with the Voting Trustee. Upon such written consent or approval and
the filing of such written consents or said certificate with the books of record
kept by the Voting Trustee, the proposed amendment or modification thereof shall
become a part of this Agreement with like force and effect as of originally
incorporated herein.
11. Miscellaneous.
--------------
(a) Acceptance by Voting Trustee. The Voting Trustee accepts
----------------------------
the trust hereunder and agrees to perform as trustee upon the terms and
conditions of this Agreement.
(b) Parties to Agreement. This Agreement shall be binding
----------------------
upon and shall operate for the benefit of the Shareholders and the Voting
Trustee and their respective heirs, estates, personal representatives,
successors and permitted assigns, and shall be binding upon any transferee of
Shares or Voting Trust Certificates from a Shareholder. Subject to the terms of
Section 7(c), the name of any permitted transferee of Shares or Voting Trust
Certificates from a Shareholder shall be added or be deemed to be added to the
attached Exhibit A and such persons shall be considered Shareholders for
purposes of this Agreement.
(c) Entire Agreement. This Agreement contains the entire
-----------------
understanding among the parties and supersedes any prior understanding and
agreements between them respecting the within subject matter hereof. There are
no representations, agreements, arrangements, or understandings, oral or
written, between or among the parties hereto relating to the subject matter of
this Agreement which are not fully expressed herein.
(d) Survival. This Agreement shall be binding upon and inure
--------
to the benefit of the heirs, executors, administrators successors, and assigns
of the parties hereto.
(e) Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute one and the same instrument. The
execution by any one party of any counterpart shall be sufficient execution by
that party, whether or not the same counterpart has been executed by any other
party.
10
<PAGE>
(f) Fractional Shares. Whenever necessary, the Voting
------------------
Trustee may issue Voting Trust Certificates for fractional Shares.
(g) Gender; Number. Whenever the context of this Agreement
---------------
requires, the masculine gender includes the neuter or feminine, and the singular
number includes the plural.
(h) Effectiveness of Amended and Restated Agreement. This
--------------------------------------------------
Amended and Restated Voting Trust Agreement shall become effective upon approval
of this Amended and Restated Voting Trust Agreement, in accordance with the
terms of the Agreement as in effect on the date of such approval, whether or not
this Amended and Restated Voting Trust Agreement is executed by an individual
Shareholder.
(i) Governing Law. The validity of this Agreement or any
--------------
part hereof, and the interpretation and enforcement of all provisions hereof,
shall be governed by and construed and enforced in accordance with the laws of
the State of Ohio.
(j) Invalidity. The invalidity of any term or provisions of
----------
this Agreement shall not affect the validity of the remainder of this Agreement
and this Agreement shall be enforced to the greatest extent permitted by law.
(k) Headings. The section headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(l) GE Rights. The obligation to obtain GE's consent in
----------
Sections 7 and 10, and the rights of GE to notice and to designate a successor
Voting Trustee in Section 6 shall be effective on and after the date on which GE
makes an equity investment in the Company in an amount not less than
$20,000,000, and shall terminate as provided in the agreements related to such
equity investment, at all other times such references to GE shall be of no force
and effect.
IN WITNESS WHEREOF, the parties hereto have signed the attached
counterpart signature pages of this Agreement as of the day and year first above
written.
(Agreement and Signature Lines Continue on Following Pages)
11
<PAGE>
This page constitutes a counterpart signature page to the Amended and
Restated Voting Trust Agreement made and entered into by and among Alan J. Ruud,
as voting trustee, and certain Shareholders of Advanced Lighting Technologies,
Inc., an Ohio corporation, on October 1, 1999. The undersigned parties hereby
agree to be bound by the terms thereof.
VOTING TRUSTEE:
/s/ Alan J. Ruud
--------------------------------------
Alan J. Ruud
Date: October 1, 1999
12
<PAGE>
This page constitutes a counterpart signature page to the Amended and
Restated Voting Trust Agreement made and entered into by and among Alan J. Ruud,
as voting trustee, and certain Shareholders of Advanced Lighting Technologies,
Inc., an Ohio corporation, on October 1, 1999. The undersigned parties hereby
agree to be bound by the terms thereof.
SHAREHOLDER:
/s/ Donald Wandler
--------------------------------------
Donald Wandler
Date: October 1, 1999
13
<PAGE>
This page constitutes a counterpart signature page to the Amended and
Restated Voting Trust Agreement made and entered into by and among Alan J. Ruud,
as voting trustee, and certain Shareholders of Advanced Lighting Technologies,
Inc., an Ohio corporation, on October 1, 1999. The undersigned parties hereby
agree to be bound by the terms thereof.
SHAREHOLDER:
/s/ Theodore O. Sokoly
--------------------------------------
Theodore O. Sokoly
Date: October 1, 1999
14
<PAGE>
This page constitutes a counterpart signature page to the Amended and
Restated Voting Trust Agreement made and entered into by and among Alan J. Ruud,
as voting trustee, and certain Shareholders of Advanced Lighting Technologies,
Inc., an Ohio corporation, on October 1, 1999. The undersigned parties hereby
agree to be bound by the terms thereof.
SHAREHOLDER:
/s/ Christopher A. Ruud
--------------------------------------
Christopher A. Ruud
Date: October 1, 1999
15
<PAGE>
This page constitutes a counterpart signature page to the Amended and
Restated Voting Trust Agreement made and entered into by and among Alan J. Ruud,
as voting trustee, and certain Shareholders of Advanced Lighting Technologies,
Inc., an Ohio corporation, on October 1, 1999. The undersigned parties hereby
agree to be bound by the terms thereof.
SHAREHOLDER:
/s/ Cynthia A. Johnson
--------------------------------------
Cynthia A. Johnson
Date: October 1, 1999
16
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
SHAREHOLDERS NUMBER OF SHARES
- ------------------- ----------------
<S> <C>
Theodore O. Sokoly. 142,857
Donald Wandler. . . 571,429
Christopher A. Ruud 428,571
Cynthia A. Johnson. 354,286
</TABLE>
<PAGE>
EXHIBIT B
SHAREHOLDER PROXY
<PAGE>
EXHIBIT C
VOTING TRUST CERTIFICATE
ADVANCED LIGHTING TECHNOLOGIES, INC.
------------------------------------
No. _______________ ____ Shares of
Common Stock
ALAN J. RUUD, the Voting Trustee under an Amended and Restated Voting
Trust Agreement dated January 2, 1998 (the "Agreement"), having received certain
shares of common stock, par value $.001 per share ("Common Stock"), of Advanced
Lighting Technologies, Inc., an Ohio corporation (the "Company") pursuant to the
Agreement, hereby certifies that ____________________ will be entitled to
receive a certificate for _____________ fully paid shares of Common Stock on the
expiration or termination of the Agreement.
IN WITNESS WHEREOF, the Trustee has executed this Certificate this
____ day of _____________________, 1999.
- --------------------------------- -------------------------------------
Alan J. Ruud, Voting Trustee
Name:
----------------------------
- ---------------------------------
Name:
----------------------------
STATE OF WISCONSIN )
) SS:
COUNTY OF RACINE )
The foregoing instrument was acknowledged before me this _____ day of
_________, 1998 by __________________________, an individual, as his free act
and deed.
-------------------------------------
Notary Public
CONTINGENT WARRANT AGREEMENT
THIS CONTINGENT WARRANT AGREEMENT (this "Agreement"), dated as of
September 30, 1999, is among Advanced Lighting Technologies, Inc., an Ohio
corporation (the "Company"), General Electric Company, a New York corporation
("Purchaser"), Wayne R. Hellman ("Hellman"), Hellman, Ltd., an Ohio limited
liability company ("Hellman Ltd."), Wayne R. Hellman, as voting trustee under
Voting Trust Agreement dated October 10, 1995, Alan J. Ruud ("Ruud"), and Alan
J. Ruud, as voting trustee under Voting Trust Agreement dated January 2, 1998.
The parties hereto agree as follows:
SECTION 1
DEFINITIONS
The following terms when used in this Agreement shall, except where
the context otherwise requires, have the following meanings (such definitions to
be equally applicable to the singular and plural forms thereof):
"Accountant's Certificate" shall have the meaning provided in clause
f. of Section 2.2.
"Affiliate" shall mean, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Contingent Warrant Agreement as originally
executed and as amended, modified or supplemented from time to time.
"Appraised Value" shall mean, in respect of any Common Share on any
date herein specified, the fair saleable value of such Common Share (determined
without giving effect to the discount for (i) a minority interest, or (ii) any
lack of liquidity of the Common Share, or (iii) to the fact that the Company may
have no class of equity registered under the Exchange Act) based on the equity
value of Company, as determined by an investment banking or valuation firm
selected in accordance with the following sentences, divided by the number of
Common Shares outstanding on a Fully Diluted Basis as determined in accordance
with GAAP (assuming the payment of the exercise prices for such shares). The
determination of the Appraised Value per Common Share
<PAGE>
shall be made by an investment banking or valuation firm of nationally
recognized standing selected by the Company and acceptable to Purchaser. If the
investment banking or valuation firm selected by Company is not acceptable to
Purchaser and the Company and Purchaser cannot agree on a mutually acceptable
investment banking or valuation firm, then Purchaser and the Company shall each
choose one such investment banking or valuation firm and the respective chosen
firms shall agree on another investment banking or valuation firm which shall
make the determination. The Company shall retain, at its sole cost, such
investment banking or valuation firm as may be necessary for the determination
of Appraised Value required by the terms of this Agreement.
"Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks are required to be closed in the State of New York.
"Common Shares" shall mean the Common Shares, par value $.001, of the
Company.
"Company" shall mean Advanced Lighting Technologies, Inc., an Ohio
corporation.
"Company Beneficial Owner" shall have the meaning provided in Section
2.3.
"Contingent Shares" shall have the meaning provided in Section 2.1.
"Conversion Shares" shall mean the Common Shares to be issued upon the
conversion of Series A Shares.
"Current Market Price" shall mean, in respect of any Common Share on
any date herein specified, if there shall then be a public market for the Common
Shares, the average of the daily market prices for twenty (20) consecutive
Business Days immediately preceeding such date or, if there is no such public
market, the Appraised Value per Common Share. The daily market price for each
such Business Day shall be (i) the last sale price on such day on the principal
stock exchange or NASDAQ-NMS on which such Common Shares are then listed or
admitted to trading, or (ii) if no sale takes place on such day on any such
exchange or NASDAQ-NMS, the average of the last reported closing bid and asked
prices on such day as officially quoted on any such exchange or NASDAQ-NMS, or
(iii) if the Common Shares are not then listed or admitted to trading on any
stock exchange or NASDAQ-NMS, the average of the last reported closing bid and
asked prices on such day in the over-the-counter market, as furnished by the
NASDAQ or the National Quotation Bureau, Inc., or (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the NASD selected mutually by the
Company and Purchaser
2
<PAGE>
or, if they cannot agree upon such selection, as selected by two such members of
the NASD, one of which shall be selected by the Company and one of which shall
be selected by Purchaser.
"EBITDA" shall mean, for any period and without duplication, net
earnings (loss) of the Company and its Subsidiaries determined on a consolidated
basis for such period plus the sum of the following amounts (but only to the
extent included in determining net income (loss) for such period): (i)
depreciation and amortization expense for such period, plus (ii) Interest
Expense for such period, plus (iii) the amount of any reduction pursuant to the
proviso of the definition of Interest Expense in this Section 1, plus (iv)
income tax expense in respect of such period, minus (v) extraordinary gains and
gains from sales of assets for such period, plus (vi) extraordinary losses and
losses from sales of assets for such period. EBITDA shall be determined using
generally accepted accounting principles and practices in effect on the date of
this Agreement.
"EBITDA Ratio" shall mean, for any period of determination, the ratio
of (i) EBITDA to (ii) Interest Expense.
"Excess Hellman Shares Proxy" shall mean the irrevocable proxy granted
by Wayne R. Hellman, individually, Wayne R. Hellman, in his capacity as trustee
of the Hellman Voting Trust, and Hellman Ltd. to Purchaser, the form of which is
attached hereto as Exhibit A, to, among other things, vote the Excess Hellman
Shares.
"Excess Hellman Shares" shall mean that number of Common Shares equal
to the sum of the number of Hellman Option Shares and the Ruud Option Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"First Contingent Warrant" shall have the meaning provided in
subclause (vi) of clause c. of Section 2.2.
"Fully Diluted Basis" means, with respect to any determination or
calculation, that such determination or calculation is performed on a fully
diluted basis (assuming the issuance of all Common Shares issuable under any
then outstanding options, warrants or convertible securities of any kind)
determined in accordance with GAAP for purposes of determining book value or net
income per share.
"GAAP" shall mean generally accepted accounting principles as in
effect on the date hereof and consistently applied and maintained throughout the
period indicated. Whenever any accounting term is used herein which is not
otherwise defined, it shall have the meaning ascribed thereto under GAAP.
3
<PAGE>
"Governmental Body" shall mean any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case to the extent the same has jurisdiction over the
Person or property in question, including, but not limited to, any governmental
authority, agency, board, commission, court, department or instrumentality of
the United States, any State of the United States or any political subdivision
thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any
self-regulatory groups of which the Company, any Subsidiary or Purchaser is a
member or is subject.
"Hellman Ltd." shall mean Hellman Ltd., an Ohio limited liability
company.
"Hellman Option Shares" shall mean Common Shares owned by Wayne R.
Hellman, individually, in an amount equal to fifty percent (50%) of the Total
Option Shares.
"Hellman Option Shares Proxy" shall mean the irrevocable proxy granted
by Wayne R. Hellman, individually, to Purchaser, the form of which is attached
hereto as Exhibit B, to, among other things, vote the Hellman Option Shares.
"Hellman Shares" shall mean, collectively, all Common Shares held, of
record or beneficially, by Wayne R. Hellman, individually, Wayne R. Hellman, in
his capacity as trustee of the Hellman Voting Trust, and Hellman Ltd.
"Hellman Shares Proxy" shall mean the irrevocable proxy granted by
Wayne R. Hellman, individually, Wayne R. Hellman, in his capacity as trustee of
the Hellman Voting Trust, and Hellman Ltd. to Purchaser, the form of which is
attached hereto as Exhibit C, to, among other things, vote the Net Hellman
Shares.
"Hellman Voting Trust" shall mean the Voting Trust Agreement, dated as
of October 10, 1995, as amended, between Wayne R. Hellman, as voting trustee,
and certain shareholders of the Company. As used herein, the term Hellman Voting
Trust shall include any irrevocable proxies granted to Wayne R. Hellman with
respect to shares withdrawn from the Hellman Voting Trust and deposited in
margin accounts by the beneficial holders thereof.
"Interest Expense" shall mean, for any period (a) the total
consolidated interest expense of the Company and its Subsidiaries determined on
a consolidated basis and in any event shall include all interest expense with
respect to any indebtedness in respect of which the Company or any Subsidiary is
wholly or partially liable excluding interest on indebtedness to the Company
from any Subsidiary and interest on indebtedness to any Subsidiary from the
Company; provided, however, the amount of
4
<PAGE>
interest expense determined in accordance with GAAP for any period shall be
reduced by any amortization of deferred financing costs in an amount up to but
not exceeding $125,000 with respect to any single fiscal quarter, minus (b)
gross interest income of the Company and its Subsidiaries determined on a
consolidated basis.
"NASDAQ Approval" shall mean approval of the transactions contemplated
by the Stock Purchase Agreement by the shareholders of the Corporation pursuant
to NASDAQ Rule 4460(i)(D).
"Net Hellman Shares" shall mean the Hellman Shares less that number of
Common Shares that are represented by the Hellman Option Shares Proxy plus the
Ruud Option Shares Proxy.
"Net Ruud Shares" shall mean the Ruud Shares less that number of
Common Shares that are represented by the Ruud Option Shares Proxy.
"Option Agreement" shall mean the Option Agreement, of even date
herewith, among Purchaser, Hellman and Ruud, under which Purchaser is granted an
option to purchase the Hellman Option Shares and the Ruud Option Shares.
"Permitted Issuances" shall mean (i) the issuance or conversion of
options issued pursuant to any stock option plan, employee incentive plan,
employee stock purchase plan or employee retirement and savings plan approved by
the Company's Board of Directors, (ii) the issuance of Conversion Shares,
Contingent Shares or Warrant Shares, and (iii) the issuance of Common Shares to
satisfy obligations in respect of acquisitions of securities or assets of any
Person, provided (A) such contracts were entered into prior to September 30,
1999, and (B) the number of Common Shares subject to this subclause (iii) shall
not exceed 110,000 in the aggregate.
"Person" shall mean any natural person, corporation, firm,
partnership, association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
"Preferred Shares" shall mean the Series A Shares.
"Proceeding" shall have the meaning provided in Section 2.3.
"Purchaser" shall mean General Electric Company, a New York
corporation.
"Required Ratio" shall mean 2 to 1.
5
<PAGE>
"Ruud Option Shares" shall mean Common Shares owned by Alan J. Ruud,
individually, in an amount equal to fifty percent (50%) of the Total Option
Shares.
"Ruud Option Shares Proxy" shall mean the irrevocable proxy granted by
Alan J. Ruud, individually, to Purchaser, the form of which is attached hereto
as Exhibit D, to, among other things, vote the Ruud Option Shares.
"Ruud Shares" shall mean, collectively, all Common Shares held, of
record or beneficially, by Alan J. Ruud, individually, and Alan J. Ruud, in his
capacity as trustee of the Ruud Voting Trust.
"Ruud Shares Proxy" shall mean the irrevocable proxy granted by Alan
J. Ruud, individually, and Alan J. Ruud, in his capacity as trustee of the Ruud
Voting Trust, to Purchaser, the form of which is attached hereto as Exhibit E,
to, among other things, vote the Net Ruud Shares.
"Ruud Voting Trust" shall mean the Voting Trust Agreement, dated as of
January 2, 1998, as amended, between Alan J. Ruud, as voting trustee, and
certain shareholders of the Company. As used herein, the term Ruud Voting Trust
shall include any irrevocable proxies granted to Alan J. Ruud with respect to
shares withdrawn from the Ruud Voting Trust and deposited in margin accounts by
the beneficial holders thereof.
"Second Contingent Warrant" shall have the meaning provided in
subclause (ii) of clause d. of Section 2.2.
"Second Occurrence Failure" shall have the meaning provided in clause
c. of Section 2.2.
"Series A Shares" shall mean shares of Series A Convertible Preferred
Stock, par value $.001, of the Company.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated September 28, 1999, between the Company and Purchaser.
"Subsidiary" of the Company shall mean any other corporation of which
more than 50% of the outstanding shares of capital stock having ordinary voting
power for the election of directors is owned directly or indirectly by the
Company, by the Company and one or more Subsidiaries, or by one or more other
Subsidiaries.
"Third Occurrence Failure" shall have the meaning provided in clause
d. of Section 2.2.
6
<PAGE>
"Total Option Shares" shall mean the number of Common Shares that when
combined with all other Common Shares owned by Purchaser or its Affiliates at
the time of determination will result in Purchaser having twenty-five percent
(25%) of the voting power of the Company's capital stock. The time of
determination of the Total Option Shares shall be the first Business Day
immediately following Purchaser's receipt of the Accountant's Certificate
indicating a Second Occurrence Failure.
"Warrant" shall mean the warrant in the form of Exhibit 1 attached to
the Stock Purchase Agreement.
"Warrant Shares" shall mean Common Shares to be issued upon exercise
of the Warrant.
SECTION 2
THE CONTINGENT WARRANTS AND THE CONTINGENT SHARES
2.1 Authorization of the Contingent Shares; Agreement to Issue
Securities and Provide Financial Accommodation. The Company has authorized the
issuance and sale on the terms and subject to the conditions of this Agreement
of such number of Common Shares as are necessary for the Company to fulfill its
obligations under the provisions of Sections 2.2.c(vi) and 2.2.d(iii) of this
Agreement (the "Contingent Shares"), in the event Purchaser exercises its rights
under either or both of such Sections. This Agreement is and is intended to be
an agreement for the issuance of securities by the Company and the providing of
financial accommodation to the Company within the meaning of Section 365(c)(2)
of Title 11 of the United States Code.
2.2 EBITDA Coverage Ratio; Vesting of Rights Under Warrants; Issuance
of Contingent Warrants; Proxies.
a. The Company shall not permit the average of the Company's
EBITDA Ratio for any two consecutive fiscal quarters, commencing with the
average for the fiscal quarters ending September 30, 1999 and December 31, 1999,
and continuing each fiscal quarter thereafter (each, a "Determination Period"),
to be less than the Required Ratio.
b. Intentionally Omitted.
c. Except as provided in clause e. below and subject to
compliance with the terms of the Ohio Control Share Acquisition Act, if
applicable, upon the second occurrence of the EBITDA Ratio being less than the
Required Ratio for any Determination Period (a "Second Occurrence Failure"):
7
<PAGE>
(i) The Hellman Shares Proxy shall become effective upon
expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 applicable to the acquisition of an option and a proxy
in respect of the Hellman Option Shares and the Ruud Option Shares pursuant to
the Option Agreement, the Hellman Option Shares Proxy and the Ruud Option Shares
Proxy (the "Option Waiting Period") and from and after such date Purchaser may
exercise its rights under the Hellman Shares Proxy, including, without
limitation, its rights to vote the Net Hellman Shares; and
(ii) The Hellman Option Shares Proxy shall become effective
upon expiration of the Option Waiting Period and from and after such date
Purchaser may exercise its rights under the Hellman Option Shares Proxy,
including, without limitation, its rights to vote the Hellman Option Shares; and
(iii) The Ruud Option Shares Proxy shall become effective
upon expiration of the Option Waiting Period and from and after such date
Purchaser may exercise its rights under the Ruud Option Shares Proxy, including,
without limitation, its rights to vote the Ruud Option Shares; and
(iv) Purchaser shall exercise the Warrant; and
(v) Purchaser shall have the right and option to purchase
the Ruud Option Shares and the Hellman Option Shares pursuant to the terms of
the Option Agreement, the form of which is attached hereto as Exhibit F. The
parties acknowledge and agree that in determining the number of Total Option
Shares the Warrant Shares will be counted among the Common Shares owned by
Purchaser. The Option Agreement shall provide, among other things, that the
Options (as defined in the Option Agreement) may be exercised only after all
governmental and regulatory approvals (including, without limitation, any
approvals required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended) necessary in connection with Purchaser's ownership of a 25%
interest in the Company have been obtained and that the Option Period (as
defined in the Option Agreement) shall be extended so that it expires on the
later of: (A) the one-year anniversary of the date of Purchaser's receipt of the
Accountant's Certificate indicating a Second Occurrence Failure and (B) the
close of business on the 30th day following receipt of all necessary
governmental and regulatory approvals necessary in connection with Purchaser's
ownership of a 25% interest in the Company; and
(vi) Subject to NASDAQ Approval, the Company shall issue to
Purchaser a warrant in the form attached hereto as Exhibit 2.2(c) (the "First
Contingent Warrant") granting Purchaser the right to purchase, in accordance
with the terms set forth in such First Contingent Warrant and at the Current
Market Price (determined at the time the event giving rise to the issuance of
the First Contingent Warrant occurred), that number of additional Common Shares
necessary to give Purchaser a majority of the
8
<PAGE>
voting power of the Company's capital stock (assuming for purposes of making
such determination that (A) Purchaser has fully exercised the Warrant, (B)
Purchaser has not transferred, or transferred the right to vote, any Warrant
Shares, Preferred Shares or Conversion Shares, and (C) Purchaser has the power
and authority to vote the Hellman Shares and the Ruud Shares). The First
Contingent Warrant shall be delivered to Purchaser no later than the third
Business Day following the Purchaser's receipt of the Accountant's Certificate
indicating a Second Occurrence Failure.
d. Except as provided in clause e. below and subject to
compliance with the terms of the Ohio Control Share Acquisition Act, if
applicable, upon the third occurrence of the EBITDA Ratio being less than the
Required Ratio for any Determination Period (a "Third Occurrence Failure"):
(i) The Ruud Shares Proxy shall become effective (provided
the Option Waiting Period has lapsed as of such date) and from and after such
date Purchaser may exercise its rights under the Ruud Shares Proxy, including,
without limitation, its rights to vote the Net Ruud Shares; and
(ii) The Excess Hellman Shares Proxy shall become effective
(provided the Option Waiting Period has lapsed as of such date) and from and
after such date Purchaser may exercise its rights under the Excess Hellman
Shares Proxy, including, without limitation, its rights to vote the Excess
Hellman Shares; and
(iii) Subject to NASDAQ Approval, the Company shall issue to
Purchaser a warrant (in addition to any First Contingent Warrant issued to
Purchaser in accordance with Section 2.2.c (vi) hereof) in the form attached
hereto as Exhibit 2.2(d) (the "Second Contingent Warrant") granting Purchaser
the right to purchase, in accordance with the terms set forth in such Second
Contingent Warrant and at the Current Market Price (determined at the time the
event giving rise to the issuance of the Second Contingent Warrant occurred)
that number of additional Common Shares necessary to give Purchaser a majority
of the voting power of the Company's capital stock (taking into account the
Hellman Shares and the Ruud Shares over which the Company has actual voting
control pursuant to the provisions of this Section 2.2 and assuming for the
purpose of making such determination that (A) Purchaser has fully exercised the
Warrant and (B) Purchaser has not transferred, or transferred the right to vote,
any Warrant Shares, Preferred Shares or Conversion Shares). The Second
Contingent Warrant shall be delivered to Purchaser no later than the third
Business Day following the Third Occurrence Failure.
e. If the EBITDA Ratio for any three consecutive fiscal quarters
immediately preceding a failure by the Company to meet the Required Ratio for a
Determination Period, other than the first Determination Period ending December
31, 1999, is at least 2 to 1, then the failure to meet the Required Ratio for
such Determination
9
<PAGE>
Period (the "Most Recent Determination Period") shall not be deemed to be a
"Second Occurrence Failure" or a "Third Occurrence Failure", as the case may be,
for the purposes of this Section 2.2; provided, however, that the EBITDA Ratio
for the last full fiscal quarter included in the Most Recent Determination
Period will be the EBITDA Ratio for the first full fiscal quarter included in
the determination of the Required Ratio for the Determination Period immediately
succeeding the Most Recent Determination Period.
f. The Company shall deliver to Purchaser (i) as soon as
practicable following, but in no event later than the 45th Business Day
following, the end of each fiscal quarter of the Company, commencing with the
fiscal quarter ending December 31, 1999, an "agreed upon procedures" letter of
the Company's independent certified public accountants in the form of Exhibit
2.2f(i) setting forth the calculation of the EBITDA Ratio (together with such
supporting information as Purchaser may reasonably request to verify the EBITDA
Ratio) for the most recently completed Determination Period, and (ii) as soon as
practicable following, but in no event later than the 90th Business Day
following the end of each fiscal year of the Company, commencing with the fiscal
year ending June 30, 2000, a certificate of the Company's independent certified
public accountants in the form of Exhibit 2.2f(ii) setting forth the calculation
of the EBITDA Ratio (together with such supporting information as Purchaser may
reasonably request to verify the EBITDA Ratio) for such fiscal year and for the
most recently completed Determination Period and certifying that such
calculations are true and correct (each such letter and certificate is referred
to as an "Accountant's Certificate").
2.3 Purchaser's Rights in the Event of Governmental Proceeding. If any
action or proceeding (a "Proceeding") before any Governmental Body or agency is
pending or threatened against the Company or any beneficial owner of 5% or more
of any class of equity securities of the Company (a "Company Beneficial Owner"),
including, without limitation, any Proceeding (i) seeking to adjudicate the
Company or any Company Beneficial Owner a bankrupt or insolvent or seeking the
appointment of a receiver, trustee, custodian or other similar official for it,
him or her or for any substantial part of its, his or her assets, or (ii) in
which the Company or any Company Beneficial Owner shall seek protection or
relief under any law relating to bankruptcy, insolvency, relief or protection of
debtors, and such Proceeding, directly or indirectly, prevents Purchaser from
exercising or realizing any of its rights under clauses c. or d. of Section 2.2
of this Agreement, then, automatically and without further action on the part of
the Company or Purchaser, Purchaser shall be entitled to simultaneously exercise
or realize its rights under clauses c. and d. of Section 2.2 of this Agreement
to the same extent as if there had occurred a Second Occurrence Failure and a
Third Occurrence Failure.
10
<PAGE>
SECTION 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1 Investment. At the time of any Second Occurrence Failure or a
Third Occurrence Failure, and at the time of any exercise by Purchaser of any of
its purchase rights under the First Contingent Warrant or the Second Contingent
Warrant, Purchaser will be acquiring, respectively, the First Contingent Warrant
and the Second Contingent Warrant, and the Contingent Shares, for investment for
Purchaser's own account, not as a nominee or agent and not with the view to, or
for resale in connection with, any distribution thereof. Purchaser understands
that none of the Contingent Shares have been, nor will they be (other than in
accordance with the terms of the Registration Rights Agreement referred to in
Section 4.1(g)(ii) of the Stock Purchase Agreement), registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act that depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of Purchaser's
representations as expressed herein.
SECTION 4
CONDITIONS TO OBLIGATIONS OF THE COMPANY
4.1 Conditions to Obligations of the Company. The obligations of the
Company to issue the First Contingent Warrant and the Second Contingent Warrant
are subject to the satisfaction of each of the following conditions precedent,
to the extent applicable, on or before the applicable Second Occurrence Failure
and Third Occurrence Failure, respectively, unless waived by the Company in
writing:
a. Representations True. All of the representations and
warranties made by Purchaser to the Company in this Agreement shall be true and
correct when made and, in all material respects, as of the applicable Second
Occurrence Failure and Third Occurrence Failure, respectively.
b. Regulatory Approvals. Purchaser and the Company shall have
received all governmental and other approvals required under any applicable
laws, statutes, orders, rules, regulations or policies, or any guidelines
promulgated thereunder, including, without limitation, under the
Hart-Scott-Rodino Antitrust Improvements Act, as amended.
11
<PAGE>
SECTION 5
MISCELLANEOUS
5.1 Expenses. The Company will pay, or reimburse Purchaser and hold
Purchaser harmless against liability for the payment of, all stamp and other
taxes which may be payable in respect of the execution and delivery of this
Agreement, the issuance of the First Contingent Warrant or the Second Contingent
Warrant and the issuance, purchase and delivery of Contingent Shares.
5.2 Binding Agreement; Assignment. The provisions of this Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto. Purchaser shall not have the right to assign this
Agreement or any of its rights and obligations hereunder, except to any
Affiliate of Purchaser, without the consent of the Company.
5.3 Notices. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended (which shall include delivery by Federal Express or similar service) or
three (3) business days after being deposited, postage prepaid, certified or
registered mail, return receipt requested, in the United States mail bearing the
address shown in this Agreement for, or such other address as may be designated
in writing hereafter by, such party:
a. If to Purchaser:
GE Lighting
1975 Noble Rd.
Cleveland, OH 44112
Attention: President and Chief Executive Officer
Facsimile: (216) 266-8699
with a copy to:
GE Lighting
1975 Noble Rd.
Cleveland, OH 44112
Attention: General Counsel
Facsimile: (216) 266-3856
12
<PAGE>
b. If to the Company:
Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
Attention: CEO
with a copy to:
Cowden, Humphrey & Sarlson Co., L.P.A.
1414 Terminal Tower
Cleveland, Ohio 44113
Attention: James S. Hogg, Esq.
Facsimile: (216) 241-2881
5.4 Waiver. No delay on the part of any party hereto with respect to
the exercise of any right, power, privilege, or remedy under this Agreement
shall operate as a waiver thereof, nor shall any exercise or partial exercise of
any such right, power, privilege, or remedy preclude any further exercise
thereof or the exercise of any other right, power, privilege, or remedy. No
modification or waiver by either party hereto of any provision of this
Agreement, or consent to any departure by the other party therefrom, shall be
effective in any event unless in writing as set forth in Section 5.3, and then
only in the specific instance and for the purpose for which given.
Notwithstanding the foregoing, each party hereto shall have the right to waive
compliance by the other party with any of the provisions hereof, or to modify
such provisions to a less restrictive obligation of the other party on such
terms as such party shall determine, with or without prior notice to the other
party.
5.5 Remedies. The rights, powers, privileges, and remedies hereunder
are cumulative and not exclusive of any other right, power, privilege, or remedy
the parties hereto would otherwise have.
5.6 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between Purchaser and the Company with respect to the subject
matter hereof, and supersedes all prior agreements and understandings relating
to the subject matter hereof.
5.7 Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law.
13
<PAGE>
5.8 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
5.9 Severability. 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 of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
5.10 Cross-References. References in this Agreement to any section
are, unless otherwise specified, to such section of this Agreement.
5.11 Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
5.12 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective unless such modification, amendment or waiver is approved in writing
by the Company and Purchaser. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement.
5.13 Term. This Agreement shall commence on the date hereof and end on
the eleventh anniversary of the date hereof.
5.14 Right to Purchase. Except for Permitted Issuances, if at any time
after a Third Occurrence Failure the Company authorizes the issuance or sale of
any equity securities or securities containing options or rights to acquire any
shares of equity securities of the Company (any such securities or debt, the
"Offered Securities"), then, subject to NASDAQ Approval, the Company shall first
offer to sell the Offered Securities to Purchaser by written notice to Purchaser
(the "Company Notice"). Purchaser may elect to purchase Purchaser's pro rata
share (determined by the ratio of Purchaser's then existing holdings of Common
Shares and Common Share equivalents (including, without limitation, Conversion
Shares) to the total holdings of all shareholders of the Company on a fully
diluted basis (assuming exercise of the Warrant immediately prior to the date of
the applicable purchase in accordance with the terms of the Warrant) of the
Offered Securities at the price and on the terms specified in the Company Notice
by delivering written notice of such election to the Company within 20 days
after delivery of the Company Notice. Upon the expiration of the offering period
described above, the Company shall be entitled to sell such of the Offered
Securities which the Purchaser has not elected to purchase during the 90 days
following such expiration on terms and
14
<PAGE>
conditions no more favorable to the purchasers thereof than those offered to the
Purchaser. Any Offered Securities offered or sold by the Company after such
90-day period must be reoffered to the Purchaser pursuant to the terms of this
Section 5.14. The rights of Purchaser under this Section 5.14 shall terminate
upon expiration of the term of this Agreement as set forth in Section 5.13
hereof.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be executed in the name and on behalf of each of them by one of their
respective officers, thereunto duly authorized, as of the date first above
written.
THE COMPANY:
ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Wayne Hellman
Name: Wayne Hellman
Title: Chairman & CEO
/s/ Wayne Hellman
-------------------
Wayne R. Hellman
/s/ Wayne Hellman
-------------------
Wayne R. Hellman, as voting trustee under Voting
Trust Agreement dated October 10, 1995, as amended
Hellman Ltd.
By: /s/ Wayne Hellman
Its: Managing Member
15
<PAGE>
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
/s/ Alan J. Ruud
-------------------
Alan J. Ruud, as voting trustee under Voting Trust
Agreement dated January 2, 1998, as amended
PURCHASER:
GENERAL ELECTRIC COMPANY
By: /s/ Mike S. Zafirovski
-------------------------------
Name: Mike S. Zafirovski
Title: President and CEO, GE Lighting
16
RUUD OPTION SHARES
IRREVOCABLE PROXY
The undersigned hereby appoints GENERAL ELECTRIC COMPANY, a New York corporation
("GE"), attorney and proxy of the undersigned, with full power of substitution,
with respect to the Ruud Option Shares (as defined in the Contingent Warrant
Agreement of even date herewith between Advanced Lighting Technologies, Inc., an
Ohio corporation (the "Company"), and GE (the "Contingent Warrant Agreement")),
to exercise and enjoy the right to vote the Ruud Option Shares and to
participate in and consent or refuse to consent to any and all corporate or
shareholders' actions of any character, all in its sole and absolute discretion.
The undersigned shall retain the exclusive right to receive and retain any
distributions of property (except common or preferred shares of the Company)
made by the Company in the form of dividends with respect to the Ruud Option
Shares or upon the liquidation, dissolution or winding up of the Company. The
matters regarding which GE shall be entitled to vote in its sole and absolute
discretion shall include, by way of example but not limitation, any sale of
substantially all of the assets of, or any liquidation of, the Company; any
increase or decrease in the authorized or outstanding number of shares of any
class of shares of the Company; any merger or consolidation involving the
Company; any acquisition by the Company of any other business or of
substantially all of the assets thereof; any election of directors of the
Company; any amendment to the articles of incorporation or code of regulations
of the Company; or any recapitalization or reorganization of the Company. The
proxy granted hereunder shall be effective upon expiration of the Option Waiting
Period (as defined in Section 2.2(c)(i) of the Contingent Warrant Agreement) and
shall end on the earlier of: (i) the Redemption Date (as defined in Second
Amended and Restated Articles of Incorporation of the Company, as amended), if
during the three (3) year period immediately preceding the Redemption Date GE
shall not have received an Accountant's Certificate (as defined in the
Contingent Warrant Agreement) indicating an occurrence of the EBITDA Ratio (as
defined in the Contingent Warrant Agreement) being less than the Required Ratio
(as defined in the Contingent Warrant Agreement) for any Determination Period
(as defined in the Contingent Warrant Agreement), or (ii) eleven (11) years
after the date GE has received the Accountant's Certificate indicating a Second
Occurrence Failure (as defined in the Contingent Warrant Agreement). The proxy
granted hereunder shall be irrevocable and shall be coupled with an interest and
shall be binding and enforceable on and against the heirs, personal
representatives, successors, and assigns of the undersigned, and the proxy shall
not be revoked or terminated by the death, disability, bankruptcy, or
incompetency of the undersigned, or his respective successors and assigns. In
the event of any conflict between the provisions of this document and the
provisions of the Contingent Warrant Agreement, the provisions of this document
shall govern. This document shall be governed by the laws of the State of Ohio.
<PAGE>
The undersigned hereby executes and grants this proxy as of the _______ day of
__________, 1999.
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
2
<PAGE>
RUUD SHARES
IRREVOCABLE PROXY
The undersigned each hereby appoint GENERAL ELECTRIC COMPANY, a New York
corporation ("GE"), attorney and proxy of each of the undersigned, with full
power of substitution, with respect to the Net Ruud Shares (as defined in the
Contingent Warrant Agreement of even date herewith between Advanced Lighting
Technologies, Inc., an Ohio corporation (the "Company"), and GE (the "Contingent
Warrant Agreement")), to exercise and enjoy the right to vote the Net Ruud
Shares and to participate in and consent or refuse to consent to any and all
corporate or shareholders' actions of any character, all in its sole and
absolute discretion. The undersigned shall retain the exclusive right to receive
and retain any distributions of property (except common or preferred shares of
the Company) made by the Company in the form of dividends with respect to the
Net Ruud Shares or upon the liquidation, dissolution or winding up of the
Company. The matters regarding which GE shall be entitled to vote in its sole
and absolute discretion shall include, by way of example but not limitation, any
sale of substantially all of the assets of, or any liquidation of, the Company;
any increase or decrease in the authorized or outstanding number of shares of
any class of shares of the Company; any merger or consolidation involving the
Company; any acquisition by the Company of any other business or of
substantially all of the assets thereof; any election of directors of the
Company; any amendment to the articles of incorporation or code of regulations
of the Company; or any recapitalization or reorganization of the Company. The
proxy granted hereunder shall be effective from and after the later of (i) the
date of expiration of the Option Waiting Period (as defined in Section 2.2(c)(i)
of the Contingent Warrant Agreement), or (ii) the date of receipt by GE of the
Accountant's Certificate (as defined in the Contingent Warrant Agreement)
indicating a Third Occurrence Failure (as defined in the Contingent Warrant
Agreement), and shall terminate on the date of termination of the Hellman Shares
Proxy (as defined in the Contingent Warrant Agreement). The proxy granted
hereunder shall be irrevocable and shall be coupled with an interest and shall
be binding and enforceable on and against the respective heirs, personal
representatives, successors, and assigns of each of the undersigned, and the
proxy shall not be revoked or terminated by the death, disability, bankruptcy,
incompetency, dissolution or termination of any of the undersigned, or their
respective successors and assigns. In the event of any conflict between the
provisions of this document and the provisions of the Contingent Warrant
Agreement, the provisions of this document shall govern. This document shall be
governed by the laws of the State of Ohio.
<PAGE>
The undersigned hereby execute and grant this proxy as of the _______ day of
__________, 1999.
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
/s/ Alan J. Ruud
-------------------
Alan J. Ruud, as voting trustee under the Voting
Trust Agreement dated January 2, 1998, as
amended
2
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), dated as of September 30,
1999, is among General Electric Company, a New York corporation ("Purchaser"),
Wayne R. Hellman ("Hellman"), and Alan J. Ruud ("Ruud"). Hellman and Ruud are
hereinafter sometimes collectively referred to the "Shareholders".
RECITALS:
A. The Shareholders are shareholders of Advanced Lighting
Technologies, Inc., an Ohio corporation (the "Company").
B. The Company and Purchaser are parties to a Stock Purchase
Agreement, dated September 28, 1999, under which the Company has agreed, among
other things, to sell and Purchaser has agreed to purchase 761,250 shares of
preferred stock of the Company (the "Stock Purchase Agreement").
C. The Company, Purchaser, the Shareholders and certain trusts
controlled by the Shareholders are parties to a Contingent Warrant Agreement of
even date herewith (the "Contingent Warrant Agreement"), under which the Company
has agreed to issue to Purchaser warrants to purchase Common Shares of the
Company upon the happening of certain events and the Shareholders have agreed to
grant Purchaser proxies to vote and options to purchase certain shares of common
stock of the Company held by the Shareholders.
D. It is a condition to Purchaser's consummating the transactions
contemplated by the Stock Purchase Agreement that the Shareholders enter into
this Agreement and grant the options contemplated hereby on the terms and
subject to the conditions contained herein.
NOW, THEREFORE, based upon the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
The following terms when used in this Agreement shall, except where
the context otherwise requires, have the following meanings (such definitions to
be equally applicable to the singular and plural forms thereof):
"Accountant's Certificate" shall have the meaning ascribed thereto in
clause f. of Section 2.2 of the Contingent Warrant Agreement.
<PAGE>
"Affiliate" shall mean, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Option Agreement as originally executed
and as amended, modified or supplemented from time to time.
"Appraised Value" shall mean, in respect of any Common Share on any
date herein specified, the fair saleable value of such Common Share (determined
without giving effect to the discount for (i) a minority interest, or (ii) any
lack of liquidity of the Common Share, or (iii) to the fact that the Company may
have no class of equity registered under the Exchange Act) based on the equity
value of Company, as determined by an investment banking or valuation firm
selected in accordance with the following sentences, divided by the number of
Common Shares outstanding on a Fully Diluted Basis as determined in accordance
with GAAP (assuming the payment of the exercise prices for such shares). The
determination of the Appraised Value per Common Share shall be made by an
investment banking or valuation firm of nationally recognized standing selected
by Purchaser and acceptable to the Shareholders. If the investment banking or
valuation firm selected by Purchaser is not acceptable to the Shareholders and
the Purchaser and the Shareholders cannot agree on a mutually acceptable
investment banking or valuation firm, then Purchaser and the Shareholders,
collectively, shall each choose one such investment banking or valuation firm
and the respective chosen firms shall agree on another investment banking or
valuation firm which shall make the determination. The Shareholders shall
retain, at their sole cost, such investment banking or valuation firm as may be
necessary for the determination of Appraised Value required by the terms of this
Agreement.
"Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks are required to be closed in the State of New York.
"Common Shares" shall mean the Common Shares, par value $.001, of the
Company.
"Company" shall mean Advanced Lighting Technologies, Inc., an Ohio
corporation.
2
<PAGE>
"Contingent Warrant Agreement" shall mean the Contingent Warrant
Agreement, of event date herewith, among the Company, Purchaser, the
Shareholders and certain trusts controlled by the Shareholders.
"Current Market Price" shall mean, in respect of any Common Share on
any date herein specified, if there shall then be a public market for the Common
Shares, the average of the daily market prices for twenty (20) consecutive
Business Days immediately preceding such date or, if there is no such public
market, the Appraised Value per Common Share. The daily market price for each
such Business Day shall be (i) the last sale price on such day on the principal
stock exchange or NASDAQ-NMS on which such Common Shares are then listed or
admitted to trading, or (ii) if no sale takes place on such day on any such
exchange or NASDAQ-NMS, the average of the last reported closing bid and asked
prices on such day as officially quoted on any such exchange or NASDAQ-NMS, or
(iii) if the Common Shares are not then listed or admitted to trading on any
stock exchange or NASDAQ-NMS, the average of the last reported closing bid and
asked prices on such day in the over-the-counter market, as furnished by the
NASDAQ or the National Quotation Bureau, Inc., or (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the NASD selected mutually by
Purchaser and the Shareholders or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
Purchaser and one of which shall be selected by the Shareholders.
"Determination Period" shall mean any two consecutive fiscal quarters,
commencing with the fiscal quarters ending September 30, 1999 and December 31,
1999, and continuing each fiscal quarter thereafter.
"EBITDA" shall mean, for any period and without duplication, net
earnings (loss) of the Company and its Subsidiaries determined on a consolidated
basis for such period plus the sum of the following amounts (but only to the
extent included in determining net income (loss) for such period): (i)
depreciation and amortization expense for such period, plus (ii) Interest
Expense for such period, plus (iii) the amount of any reduction pursuant to the
proviso of the definition of Interest Expense in this Section 1, plus (iv)
income tax expense in respect of such period, minus (v) extraordinary gains and
gains from sales of assets for such period, plus (vi) extraordinary losses and
losses from sales of assets for such period. EBITDA shall be determined using
generally accepted accounting principles and practices in effect on the date of
this Agreement.
"EBITDA Ratio" shall mean, for any period of determination, the ratio
of (i) EBITDA to (ii) Interest Expense.
3
<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fully Diluted Basis" means, with respect to any determination or
calculation, that such determination or calculation is performed on a fully
diluted basis (assuming the issuance of all Common Shares issuable under any
then outstanding options, warrants or convertible securities of any kind)
determined in accordance with GAAP for purposes of determining book value or net
income per share.
"GAAP" shall mean generally accepted accounting principles as in
effect on the date hereof and consistently applied and maintained throughout the
period indicated. Whenever any accounting term is used herein which is not
otherwise defined, it shall have the meaning ascribed thereto under GAAP.
"Hellman" shall mean Wayne R. Hellman.
"Hellman Option" shall have the meaning provided in Section 2.1.
"Hellman Option Shares" shall mean Common Shares owned by Hellman,
individually, in an amount equal to fifty percent (50%) of the Total Option
Shares.
"Interest Expense" shall mean, for any period (a) the total
consolidated interest expense of the Company and its Subsidiaries determined on
a consolidated basis and in any event shall include all interest expense with
respect to any indebtedness in respect of which the Company or any Subsidiary is
wholly or partially liable excluding interest on indebtedness to the Company
from any Subsidiary and interest on indebtedness to any Subsidiary from the
Company; provided, however, the amount of interest expense determined in
accordance with GAAP for any period shall be reduced by any amortization of
deferred financing costs in an amount up to but not exceeding $125,000 with
respect to any single fiscal quarter, minus (b) gross interest income of the
Company and its Subsidiaries determined on a consolidated basis.
"Option Closing" shall have the meaning provided in Section 2.5.
"Option Notice" shall have the meaning provided in Section 2.5.
"Option Period" shall have the meaning provided in Section 2.3.
"Option Purchase Price" shall have the meaning provided in Section
2.4.
"Options" shall have the meaning provided in Section 2.2.
4
<PAGE>
"Person" shall mean any natural person, corporation, firm,
partnership, association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
"Purchaser" shall mean General Electric Company, a New York
corporation.
"Required Ratio" shall mean 2 to 1.
"Ruud" shall mean Alan J. Ruud.
"Ruud Option" shall have the meaning provided in Section 2.2.
"Ruud Option Shares" shall mean Common Shares owned by Ruud,
individually, in an amount equal to fifty percent (50%) of the Total Option
Shares.
"Second Occurrence Failure" shall mean the second occurrence of the
Company's EBITDA Ratio being less than the Required Ratio for any Determination
Period.
"Shareholders" shall mean Hellman and Ruud, collectively.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated September 28, 1999, between the Company and Purchaser.
"Subsidiary" of the Company shall mean any other corporation of which
more than 50% of the outstanding shares of capital stock having ordinary voting
power for the election of directors is owned directly or indirectly by the
Company, by the Company and one or more Subsidiaries, or by one or more other
Subsidiaries.
"Total Option Shares" shall mean the number of Common Shares that when
combined with all other Common Shares owned by Purchaser or its Affiliates at
the time of determination will result in Purchaser having twenty-five percent
(25%) of the voting power of the Company's capital stock. The time of
determination of the Total Option Shares shall be the first Business Day
immediately following Purchaser's receipt of the Accountant's Certificate
indicating a Second Occurrence Failure.
ARTICLE II. OPTION AGREEMENT
Section 2.1. Grant of Hellman Option. Hellman does hereby grant to
Purchaser, or Purchaser's nominee, the exclusive and irrevocable right,
privilege and option (the "Hellman Option") to purchase at any time or from time
to time during the Option Period, upon the terms and conditions set forth
herein, all but not less than all of the Hellman Option Shares (such Hellman
5
<PAGE>
Option Shares being subject to adjustment from time to time to take into account
any action taken by the Company in respect of its Common Shares, including,
without limitation, stock splits, dividends, combinations and
reclassifications), or any securities into which the Hellman Option Shares
hereafter may be converted.
Section 2.2. Grant of Ruud Option. Ruud does hereby grant to
Purchaser, or Purchaser's nominee, the exclusive and irrevocable right,
privilege and option (the "Ruud Option") to purchase at any time or from time to
time during the Option Period, upon the terms and conditions set forth herein,
all but not less than all of the Ruud Option Shares (such Ruud Option Shares
being subject to adjustment from time to time to take into account any action
taken by the Company in respect of its Common Shares, including, without
limitation, stock splits, dividends, combinations and reclassifications), or any
securities into which the Ruud Option Shares hereafter may be converted. The
Hellman Option and the Ruud Option are hereinafter sometimes collectively
referred to as the "Options".
Section 2.3. Option Period. The Options are granted on the date hereof
and may be exercised by Purchaser from and after the date Purchaser has received
the Accountant's Certificate indicating a Second Occurrence Failure and ending
on the date that is the later of (i) the one (1) year anniversary of the date of
Purchaser's receipt of the Accountant's Certificate indicating a Second
Occurrence Failure, and (ii) the close of business on the 30th day following
receipt of all governmental and regulatory approvals (including, without
limitation, any approvals required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended) necessary in connection with Purchaser's
ownership of a twenty-five percent (25%) interest in the Company (the "Option
Period").
Section 2.4. Purchase Price. The purchase price of the Hellman Option
Shares and the Ruud Option Shares shall be the Current Market Price of such
shares at the time of the Second Occurrence Failure.
Section 2.5. Exercise of the Options. Purchaser may exercise the
Options at any time during the Option Period by delivery to Hellman, with
respect to the exercise of the Hellman Option, and to Ruud, with respect to the
exercise of the Ruud Option, of written notice thereof at the notice address for
Hellman and Ruud, respectively, set forth in Section 4.4 hereof (an "Option
Notice"). The Hellman Option and the Ruud Option must both be exercised if
either is exercised. The closing (an "Option Closing") of the purchase and sale
of the Hellman Option Shares or the Ruud Option Shares, as the case may be,
shall occur as soon as practicable after the delivery of the Option Notice
pertaining to such shares but in no event later than ten (10) days from the date
of delivery of that Option Notice. The obligation of Purchaser to consummate the
purchase of any of the Hellman Option Shares or the Ruud Option Shares at any
Option Closing is conditioned upon the receipt by the Company and the
6
<PAGE>
Shareholders of all governmental and regulatory approvals required for the
ownership of the Hellman Option Shares or the Ruud Option Shares, as the case
may be. At an Option Closing, certificates representing the Hellman Option
Shares or the Ruud Option Shares, as the case may be, shall be delivered,
together with stock powers duly executed in blank, to the Purchaser free and
clear of any and all claims, liens, charges, pledges or encumbrances and the
Purchaser shall deliver to Hellman and Ruud, as the case may be, their
respective allocable portion of the Option Purchase Price. Hellman and Ruud
shall pay any and all transfer and similar taxes imposed in connection with the
sale of the Hellman Option Shares and the Ruud Option Shares to Purchaser.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Shareholders jointly and severally represent and warrant to
Purchaser as follows:
Section 3.1. Capacity; Binding Obligation. Each Shareholder has the
capacity to enter into this Agreement, to perform its obligations hereunder, and
to consummate the transactions contemplated hereby. This Agreement constitutes
(or will constitute when executed and delivered) a legal, valid, and binding
obligation of each Shareholder, enforceable against each Shareholder in
accordance with its terms. Neither the execution, delivery, and performance of
this Agreement, nor the sale of the Hellman Option Shares or the Ruud Option
Shares will violate any provision of any law, any order of any court or other
agency of government, the Second Amended and Restated Articles of Incorporation
of the Company, as amended, the Code of Regulations of the Company or any
agreement or instrument to which either Shareholder is a party or by which
either Shareholder is bound, or be in conflict with, result in a breach of, or
constitute (with notice or lapse of time, or both) a default under any such
agreement or instrument.
Section 3.2. Securities. As of the date hereof, the Hellman Option
Shares and the Ruud Option Shares are duly authorized, validly issued, fully
paid and nonassessable. As of the date hereof, except as disclosed in writing to
the Purchaser, the Hellman Option Shares and the Ruud Option Shares are owned by
Hellman and Ruud, respectively, free and clear of all liens, encumbrances and
restrictions on transfer, other than restrictions contained in this Agreement,
the Contingent Warrant Agreement and under applicable state and federal
securities laws. Following the sale of the Hellman Option Shares or the Ruud
Option Shares or both to Purchaser in accordance with this Agreement, such
shares will be duly authorized, validly issued, fully paid and nonassessable and
will be owned by Purchaser free and clear of all liens, encumbrances and
restrictions on transfer, other than restrictions under applicable state and
federal securities laws.
7
<PAGE>
ARTICLE IV. MISCELLANEOUS
Section 4.1. Binding Effect. The Options granted herein shall be
binding upon and inure to the benefit of the parties hereto and their respective
executors, heirs, administrators, successors and assigns.
Section 4.2. No Outside Representations. This Agreement shall be
deemed to contain all of the terms and conditions agreed upon by the parties, it
being understood that there are no outside representations or oral agreements of
the parties other than those contained in the Contingent Warrant Agreement.
Section 4.3. Assignment. Purchaser shall not have the right to assign
this Agreement or any of its rights and obligations hereunder, except to any
Affiliate of Purchaser, without the consent of the Company.
Section 4.4. Notices. All notices given hereunder shall be in writing
and deemed given when mailed by registered or certified mail, return receipt
requested, postage prepaid, or sent by Federal Express or other similar
overnight service, addressed to the party to whom directed at the address set
forth below, or to such other address as may from time to time be designated by
notice given in the manner provided in this Section 4.4 or when delivered
personally.
Purchaser: GE Lighting
1975 Noble Rd.
Cleveland, OH 44112
Attention: President and Chief
Executive Officer
With a copy to: GE Lighting
1975 Noble Rd.
Cleveland, OH 44112
Attention: General Counsel
The Shareholders: Wayne R. Hellman
c/o Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
8
<PAGE>
With a copy to: Cowden, Humphrey & Sarlson Co., L.P.A.
1414 Terminal Tower
Cleveland, Ohio 44113
Attention: James S. Hogg, Esq.
Facsimile: (216) 241-2881
and: Alan J. Ruud
c/o Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
With a copy to: Cowden, Humphrey & Sarlson Co., L.P.A.
1414 Terminal Tower
Cleveland, Ohio 44113
Attention: James S. Hogg, Esq.
Facsimile: (216) 241-2881
Section 4.5. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 4.6. Prudential Letter. At the time of execution of this
Agreement, the Shareholders shall deliver to Purchaser a letter executed by a
duly authorized officer of Prudential Securities substantially in the form of
Exhibit A attached hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
PURCHASER:
GENERAL ELECTRIC COMPANY
By: /s/ Mike S. Zafirovski
------------------------------
Name: Mike S. Zafirovski
Title: President and CEO, GE Lighting
9
<PAGE>
THE SHAREHOLDERS:
/s/ Wayne R. Hellman
-----------------------
Wayne R. Hellman
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
10
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This Right of First Refusal and Co-Sale Agreement (this "Agreement")
is made and entered into as of September 30, 1999, by and among Wayne R. Hellman
("Hellman"), Hellman, Ltd., an Ohio limited liability company ("Hellman Ltd."),
Alan J. Rudd ("Ruud") and General Electric Company, a New York corporation
("GE").
RECITALS:
A. Pursuant to a Stock Purchase Agreement (the "Stock Purchase
Agreement") dated September 28, 1999, between Advanced Lighting Technologies,
Inc., an Ohio corporation ("ALT"), and GE, GE has agreed to purchase seven
hundred sixty-one thousand two hundred fifty (761,250) shares of Series A
Convertible Preferred Stock, par value $.001 (the "Series A Shares"), of ALT.
B. It is a condition to the obligations of GE under the Stock Purchase
Agreement that the parties hereto execute this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants
contained herein, the parties agree as follows:
1. Definitions.
"Family Group" shall mean an individual's parents, children or
siblings and trusts for the benefit of such individual or such individual's
parents, children or siblings.
"Offer Notice" shall have the meaning provided in Section 2.
"Sale Notice" shall have the meaning provided in Section 3.
"Series A Shares" shall have the meaning ascribed thereto in Recital A
of this Agreement.
"Shares" shall mean any and all Common Shares, Preferred Shares, other
equity securities of the Company and rights, options or warrants exercisable,
exchangeable or convertible into equity securities of the Company owned, of
record or beneficially, by a Stockholder.
"Stockholder" shall mean any of Hellman, Hellman Ltd. or Ruud and
"Stockholders" shall mean Hellman, Hellman Ltd. and Ruud.
<PAGE>
Transfer" shall mean a pledge, mortgage or other encumberance on any
Shares or any sale, transfer assignment or other disposition of any interest in
any Shares.
"Transferring Stockholder" shall mean any Stockholder that determines
to sell, transfer, assign or otherwise dispose of any interest, whether owned
beneficially or of record, in any Shares.
2. Right of First Refusal--Proposed Transfer by Stockholders. With
respect to any proposed Transfer of more than 1,000 Shares (whether in one
transaction or in a series of related transactions) by any single Stockholder,
the Transferring Stockholder shall first provide GE a right to purchase such
Shares by written notice (an "Offer Notice") to GE. The Offer Notice shall
disclose in reasonable detail the identity of the prospective transferee(s) or
that it is to be an open market sale, the proposed number of Shares to be
transferred and the proposed terms and conditions of the Transfer. GE may elect
to purchase all or any portion of the Shares specified in the Offer Notice at
the price and on the terms specified therein or at the market price, for any
open market sale, by delivering written notice of such election to the
Transferring Stockholder within (i) 48 hours after delivery of the Offer Notice
in the case of any open market sale and (ii) 20 days after delivery of the Offer
Notice in the case of any sale that is not an open market sale. If GE elects to
exercise its right to purchase all or a portion of the Shares, the closing of
the sale of the Shares shall be consummated within 30 days after GE delivers
written notice of such election to the Transferring Stockholder, subject to any
extension necessary to comply with any applicable regulatory requirements. To
the extent that GE has not elected to purchase all of the Transferring
Stockholder's Shares being offered, the Transferring Stockholder may, within (i)
10 days after the delivery of the Offer Notice in the case of any open market
sale and (ii) 120 days after the delivery of the Offer Notice in the case of any
sale that is not an open market sale, transfer any remaining offered Shares to
the transferee(s) identified in the Offer Notice at a price not less than the
price per share specified in the Offer Notice or at the market price, for any
open market sale, and on other terms no more favorable to such transferee(s)
than offered to GE in the Offer Notice. For the purposes of this Section 2,
Hellman and Hellman Ltd. shall be treated as a single Stockholder.
3. Right of Co-Sale. If any single Stockholder determines to Transfer
a total of more than 1,000 Shares other than in an open market sale (whether in
one transaction or in a series of related transactions) with respect to any
Shares not transferred to GE pursuant to Section 2 (the "Remaining Shares"),
such Transferring Stockholder shall offer to GE the option to participate in the
contemplated Transfer by written notice (a "Sale Notice") to GE, specifying in
reasonable detail the identity of the prospective transferee(s), the number of
Remaining Shares, and the terms and conditions of the contemplated Transfer. GE
may elect to participate in the contemplated Transfer by delivering written
notice to the Transferring Stockholder within 30 days after delivery of the Sale
Notice. The Transferring Stockholder shall use best efforts to obtain the
2
<PAGE>
agreement of the prospective transferee(s) to the participation of GE in any
contemplated Transfer and to the inclusion of a transfer of Series A Shares in
the contemplated Transfer, and the Transferring Stockholder shall not transfer
any of its Shares to the prospective transferee(s) if the prospective
transferee(s) declines to allow the participation of GE or the inclusion of the
Shares held by GE. For the purposes of this Section 3, Hellman and Hellman Ltd.
shall be treated as a single Stockholder.
4. Transfers Not Subject to Agreement. The restrictions contained in
Section 2 and in Section 3 shall not apply with respect to any Transfer in the
case of either Stockholder to or among another Stockholder or to or among such
Stockholder's Family Group; provided that the restrictions contained in Section
2 and in Section 3 shall continue to be applicable to the Shares after any such
Transfer; and further provided that the transferees of such Shares shall have
agreed in writing to be bound by the provisions of this Agreement affecting the
Shares so transferred.
5. Miscellaneous.
(a) Amendment and Waiver. Except as otherwise provided in this
Agreement, no modification, amendment or waiver of any provision of this
Agreement will be effective unless such modification, amendment or waiver is
approved in writing by GE. The failure of GE to enforce any of the provisions of
this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of GE thereafter to enforce each and every provision
of this Agreement in accordance with its terms.
(b) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Entire Agreement. Except as otherwise expressly set forth in this
Agreement, this Agreement embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
(d) Successors and Assigns. Except as otherwise provided in this
Agreement, this Agreement will bind and inure to the benefit of and be
enforceable by GE and its successors and assigns, and the Stockholders and their
respective representatives, successors and assigns.
3
<PAGE>
(e) Counterparts. This Agreement may be executed in separate
counterparts, each of which, when executed, will be an original and all of which
taken together will constitute one and the same agreement.
(f) Remedies. Each Stockholder acknowledges and agrees that, in the
event such Stockholder should fail to perform the Stockholder's obligations
under this Agreement, the remedy at law available to any party hereto aggrieved
by such failure would be inadequate and that, in addition to any other rights or
remedies such aggrieved party may have at law or in equity, the aggrieved party
shall be entitled to specific performance of the provisions of this Agreement or
an injunction against any breach thereof, without the necessity of proof of
actual damage. Accordingly, with respect to any action or proceeding brought by
such aggrieved party to enforce the provisions hereof against such Stockholder,
each such Stockholder hereby waives the claim or defense that such aggrieved
party now has or hereafter shall have an adequate remedy at law and such
Stockholder hereby agrees not to assert such claim or defense in any such action
or proceeding. This provision shall not be construed as precluding such
aggrieved party from exercising any other rights, privileges or remedies to
which such party may be entitled, all of which rights, remedies and privileges
shall be deemed cumulative and none of which shall be deemed exclusive. Except
as otherwise expressly provided in this Agreement or otherwise agreed to in
writing executed by such aggrieved party, no course of dealing on the part of,
nor any omission or delay by, such aggrieved party shall operate as a waiver of
any such right, remedy or privilege, nor shall any single or partial exercise or
waiver of any such right, privilege or remedy preclude any other or further
exercise thereof or of any other right, privilege or remedy available to such
aggrieved party.
(g) Indemnification. Each Stockholder, and such Stockholder's
representatives, successors and assigns, shall defend, indemnify and hold
harmless GE, its representatives, successors and assigns (the "Indemnified
Parties") from and against any and all liabilities, obligations, claims, costs,
damages and expenses, including without limitation reasonable attorneys' fees
and additional tax liabilities and interest and penalties, incurred by any of
the Indemnified Parties as a result of the failure of performance of, or the
breach by, such indemnifying Stockholder of any of such Stockholder's
obligations contained in this Agreement.
(h) Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered or mailed first-class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the recipient at the address indicated on the records of ALT and to
any subsequent holder of Shares subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given
4
<PAGE>
hereunder when delivered personally, three days after deposit in the U.S. mail
and one day after deposit with a reputable overnight courier service.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law.
(j) Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
(k) Prudential Letter. At the time of execution of this Agreement, the
Stockholders shall deliver to Purchaser a letter executed by a duly authorized
officer of Prudential Securities substantially in the form of Exhibit A attached
hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
/s/ Alan J. Ruud
-------------------
Alan J. Ruud
/s/ Wayne R. Hellman
-----------------------
Wayne R. Hellman
HELLMAN, LTD.
By: /s/ Wayne Hellman
------------------------
Title: Managing Member
GENERAL ELECTRIC COMPANY
By: /s/ Mike S. Zafirovski
------------------------------
Title: Mike S. Zafirovski
5
