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"), Xxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxxx, Ltd., an Ohio limited
liability company ("Xxxxxxx Ltd."), Xxxxx X. Xxxxxxx, as voting trustee under
Voting Trust Agreement dated October 10, 1995, Xxxx X. Xxxx ("Ruud"), and Xxxx
X. Xxxx, 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
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
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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 Xxxxxxx Shares Proxy" shall mean the irrevocable proxy granted
by Xxxxx X. Xxxxxxx, individually, Xxxxx X. Xxxxxxx, in his capacity as trustee
of the Xxxxxxx Voting Trust, and Xxxxxxx Ltd. to Purchaser, the form of which is
attached hereto as Exhibit A, to, among other things, vote the Excess Xxxxxxx
Shares.
"Excess Xxxxxxx Shares" shall mean that number of Common Shares equal
to the sum of the number of Xxxxxxx 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.
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"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.
"Xxxxxxx Ltd." shall mean Xxxxxxx Ltd., an Ohio limited liability
company.
"Xxxxxxx Option Shares" shall mean Common Shares owned by Xxxxx X.
Xxxxxxx, individually, in an amount equal to fifty percent (50%) of the Total
Option Shares.
"Xxxxxxx Option Shares Proxy" shall mean the irrevocable proxy granted
by Xxxxx X. Xxxxxxx, individually, to Purchaser, the form of which is attached
hereto as Exhibit B, to, among other things, vote the Xxxxxxx Option Shares.
"Xxxxxxx Shares" shall mean, collectively, all Common Shares held, of
record or beneficially, by Xxxxx X. Xxxxxxx, individually, Xxxxx X. Xxxxxxx, in
his capacity as trustee of the Xxxxxxx Voting Trust, and Xxxxxxx Ltd.
"Xxxxxxx Shares Proxy" shall mean the irrevocable proxy granted by
Xxxxx X. Xxxxxxx, individually, Xxxxx X. Xxxxxxx, in his capacity as trustee of
the Xxxxxxx Voting Trust, and Xxxxxxx Ltd. to Purchaser, the form of which is
attached hereto as Exhibit C, to, among other things, vote the Net Xxxxxxx
Shares.
"Xxxxxxx Voting Trust" shall mean the Voting Trust Agreement, dated as
of October 10, 1995, as amended, between Xxxxx X. Xxxxxxx, as voting trustee,
and certain shareholders of the Company. As used herein, the term Xxxxxxx Voting
Trust shall include any irrevocable proxies granted to Xxxxx X. Xxxxxxx with
respect to shares withdrawn from the Xxxxxxx 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
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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 Xxxxxxx Shares" shall mean the Xxxxxxx Shares less that number of
Common Shares that are represented by the Xxxxxxx 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, Xxxxxxx and Xxxx, under which Purchaser is granted an
option to purchase the Xxxxxxx 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.
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"Ruud Option Shares" shall mean Common Shares owned by Xxxx X. Xxxx,
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
Xxxx X. Xxxx, 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 Xxxx X. Xxxx, individually, and Xxxx X. Xxxx, in his
capacity as trustee of the Ruud Voting Trust.
"Ruud Shares Proxy" shall mean the irrevocable proxy granted by Xxxx
X. Xxxx, individually, and Xxxx X. Xxxx, 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 Xxxx X. Xxxx, as voting trustee, and
certain shareholders of the Company. As used herein, the term Ruud Voting Trust
shall include any irrevocable proxies granted to Xxxx X. Xxxx 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.
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"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"):
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(i) The Xxxxxxx Shares Proxy shall become effective upon
expiration of the waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 applicable to the acquisition of an option and a proxy
in respect of the Xxxxxxx Option Shares and the Ruud Option Shares pursuant to
the Option Agreement, the Xxxxxxx 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 Xxxxxxx Shares Proxy, including, without
limitation, its rights to vote the Net Xxxxxxx Shares; and
(ii) The Xxxxxxx 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 Xxxxxxx Option Shares Proxy,
including, without limitation, its rights to vote the Xxxxxxx 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 Xxxxxxx 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 Xxxx-Xxxxx-Xxxxxx 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
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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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx
Shares Proxy, including, without limitation, its rights to vote the Excess
Xxxxxxx 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
Xxxxxxx 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
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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.
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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
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, as amended.
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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
0000 Xxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: President and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
GE Lighting
0000 Xxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
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b. If to the Company:
Advanced Lighting Technologies, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: CEO
with a copy to:
Xxxxxx, Xxxxxxxx & Sarlson Co., L.P.A.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
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.
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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
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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/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Chairman & CEO
/s/ Xxxxx Xxxxxxx
-------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxxx
-------------------
Xxxxx X. Xxxxxxx, as voting trustee under Voting
Trust Agreement dated October 10, 1995, as amended
Xxxxxxx Ltd.
By: /s/ Xxxxx Xxxxxxx
Its: Managing Member
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/s/ Xxxx X. Xxxx
-------------------
Xxxx X. Xxxx
/s/ Xxxx X. Xxxx
-------------------
Xxxx X. Xxxx, as voting trustee under Voting Trust
Agreement dated January 2, 1998, as amended
PURCHASER:
GENERAL ELECTRIC COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: President and CEO, GE Lighting
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