EXHIBIT 2.2
FIRST AMENDMENT TO STOCK REDEMPTION
AND PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK REDEMPTION AND PURCHASE AGREEMENT (this
"First Amendment") is entered into as of the 12th day of December, 2001 by and
among Advanced Lighting Technologies, Inc., an Ohio corporation ("ADLT"), Ruud
Lighting, Inc., a Wisconsin corporation ("RLI"), Xxxx X. and Xxxxx Xxxx (the
"Ruuds"), Xxxxxxxx X. Xxxxxx ("Sokoly"), Xxxxxxxxxxx X. Xxxx and Xxxxxxx X.
Xxxxxxx (the Ruuds, Xxxxxx, Xxxxxxxxxxx X. Xxxx and Xxxxxxx X. Xxxxxxx are
sometimes referred to herein individually as a "Buyer" and collectively as the
"Buyers").
RECITALS
A. ADLT, RLI and the Buyers entered into that certain Stock Redemption
and Purchase Agreement dated as of November 14, 2001 (the "Redemption
Agreement"), pursuant to which RLI agreed to redeem from ADLT the Redeemed
Shares and the Buyers agreed to purchase from ADLT the Purchased Shares.
B. ADLT, RLI and the Buyers desire to amend certain provisions of the
Redemption Agreement.
C. Capitalized terms not otherwise defined in this First Amendment
shall have the meanings ascribed to them in the Redemption Agreement.
AGREEMENT
In consideration of the recitals and the mutual agreements set forth
below, the parties agree as follows:
1. AMENDMENT TO SECTION 1.4 OF THE REDEMPTION AGREEMENT. Section 1.4 of
the Redemption Agreement is amended by adding the following subsection:
(d) The parties acknowledge and agree that the books and records of
RLI, Xxxxxx Lighting and Ruud Italy (collectively, the "Ruud Consolidated
Group") were closed, effective at 12:01 a.m. on Monday, December 3, 2001 (the
"Cut-off Time"), and that all earnings and payments made to the Ruud
Consolidated Group and all liabilities incurred by the Ruud Consolidated Group
since the Cut-Off Time are made after the effective date of Closing.
Accordingly, the aggregate amount of all authorized checks and payroll drawn by
the Ruud Consolidated Group on ADLT's accounts (including PNC Account No.
8011369184; and Bank One Account No. 620835249) since the Cut-Off Time will
increase Consolidated Adjusted Closing Net Working Capital on a
dollar-for-
dollar basis; and any wire transfers, bank card deposits and other deposits made
to ADLT bank accounts (including PNC Account No. 8011369184; and Bank One
Account No. 620835249) since the Cut-Off Time for the direct or indirect benefit
of ADLT shall decrease Consolidated Adjusted Closing Net Working Capital on a
dollar-for-dollar basis, by the aggregate amount of such receipts or
collections. From and after the Cut-Off Time, none of ADLT's officers,
directors, agents, or employees will, directly or indirectly, incur any
liabilities or assume any obligations in the name of any entity contained in the
Ruud Consolidated Group without the prior consent of Xxxx Xxxx; provided,
however, that the foregoing covenant shall not apply to liabilities incurred or
obligations assumed by Xxxx Xxxx or executive officers of RLI.
By way of example, if RLI pays $100,000 of its accounts payable by
issuing checks from the checking account between the Cut-Off Time and the
Closing, Consolidated Adjusted Closing Net Working Capital shall be increased by
$100,000 for purposes of the adjustments called for by this section 1.4.
Likewise, if RLI receives or collects $100,000 of accounts receivable between
the Cut-Off Time and the Closing, Consolidated Adjusted Closing Net Working
Capital shall be increased by $100,000 for purposes of the adjustments called
for by this section 1.4.
2. AMENDMENT TO DEFINED TERMS. The following references to Closing Date
set forth in the Redemption Agreement are deleted and replaced with the defined
term "Cut-Off Time"
(a) The last three references to Closing Date in the first
paragraph of section 1.4(a) of the Redemption Agreement;
(b) The references to Closing Date set forth in sections
3.22(e)(v) and 3.23(e)(v) of the Redemption Agreement;
(c) The reference to Closing Date set forth in section 5.7(d)
of the Redemption Agreement;
(d) All of the references to Closing Date set forth in Article
7-Tax Matters of the Redemption Agreement.
3. AMENDMENT TO SECTION 1.5 OF THE REDEMPTION AGREEMENT. Section 1.5 of
the Redemption Agreement is amended to delete and replace the date of "December
7, 2001" contained in the third and fifth line of section 1.5 with the date
"December 11, 2001."
4. AMENDMENT TO SECTION 5.7 OF THE REDEMPTION AGREEMENT. Section 5.7 of
the Redemption Agreement is amended by adding the following subsections:
(h) EXISTING INVENTORY WARRANTY. ADLT covenants and agrees that it will
provide its standard warranty with respect to presently existing stock
of inventory
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held by RLI and its affiliates, on a basis consistent with the warranty
obligations of ADLT (and its affiliates) under the Component Purchase
Agreement, a copy of which is attached as Exhibit E(1) to the
Redemption Agreement.
(i) FOREIGN SUBSIDIARIES. On the date of Closing, or thereafter if
necessary, ADLT shall, without cost or expense to RLI, execute, deliver
and, if necessary, file or cause to be executed, delivered and, if
necessary, filed such further instruments of transfer and conveyance
and take such other action as RLI may reasonably require to transfer
all of the registered capital shares of Xxxxxxx Societa S.r.l. to RLI
and Xxxx Xxxx as contemplated by section 5.7(b).
(j) CORPORATE STATUS OF XXXXXX LIGHTING, INC. The parties acknowledge
and agree that Xxxxxx Lighting is not presently qualified and in good
standing under the laws of the State of Rhode Island. Therefore, on the
date of Closing, or thereafter if necessary, ADLT shall, without cost
or expense to RLI, execute, deliver and, if necessary, file or cause to
be executed, delivered and, if necessary, filed such further
instruments and take such other action (including the payment of
monies) as RLI may reasonably require so as to enable the Secretary of
State of the State of Rhode Island (and any relevant taxing authority)
to issue certificates of good standing and/or tax clearance, as
applicable.
5. AMENDMENT TO SECTION 9.3(B) OF THE REDEMPTION AGREEMENT. Section
9.3(b) of the Redemption Agreement is deleted in its entirety and replaced with
the following:
(b) Without regard to section 9.4 below, ADLT shall indemnify, defend,
save and hold RLI, Xxxxxx Lighting, Ruud Italy and the Buyers harmless
from and against any and all costs and expenses, including reasonable
attorneys' fees, interest, penalties, additional Taxes and all
reasonable amounts paid in investigation, defense or settlement of any
of the foregoing (collectively, "Tax Damages") incurred by any of the
Buyers or RLI or Xxxxxx Lighting or Ruud Italy directly or indirectly,
in connection with or arising out of, or resulting from, any proceeding
by the Internal Revenue Service, Wisconsin Department of Revenue or
other taxing authority resulting from a claim that the Tax Liability of
RLI, Xxxxxx Lighting and/or their Affiliates includes an amount
attributable to income earned, sales made or other activities which
occurred prior to Closing, but only to the extent such Tax Damages
exceed the accruals for Taxes on the Closing Balance Sheet.
6. ADDITION OF SECTION 9.3(F) TO THE REDEMPTION AGREEMENT. The
following is added as Section 9.3(f) of the Redemption Agreement:
(f) Without regard to section 9.4 below, ADLT shall indemnify, defend,
save and hold RLI, Xxxxxx Lighting, Ruud Italy and the Buyers harmless
from and against any and all costs and expenses, including reasonable
attorneys' fees,
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interest, penalties, additional Taxes, charges, delinquent fees and all
reasonable amounts paid in investigation, defense or settlement of any
of the foregoing (collectively, "Noncompliance Damages") incurred by
any of the Buyers or RLI or Xxxxxx Lighting or Ruud Italy directly or
indirectly, in connection with or arising out of, or resulting from,
any proceeding by the Secretary of State of the State of Rhode Island,
the Internal Revenue Service, Rhode Island Department of Revenue or
other governmental or taxing authority which arise from or relate to
the fact that Xxxxxx Lighting is not validly existing and in good
standing under the laws of the State of Rhode Island.
7. AMENDMENT TO SECTION 9.4 OF THE REDEMPTION AGREEMENT. Section 9.4 of
the Redemption Agreement is deleted in its entirety and replaced with the
following:
9.4 MINIMUM AND MAXIMUM INDEMNIFICATION CLAIM. With respect only to
indemnification claims made pursuant to sections 9.2(a) and 9.3(a)(i)
above and except for claims for (a) Losses which are made in the case
of fraud and intentional misrepresentations, (b) Tax Damages, (c) Title
Damages, (d) Covered Liability Damages, (e) Real Estate Damages or (f)
Noncompliance Damages, the provision for indemnity for Losses shall
only be effective and no Buyer shall be required to provide such
indemnity to the ADLT Indemnitees, and ADLT shall not be required to
provide such indemnity to the Buyers' Indemnitees, hereunder unless the
claim(s) of indemnification of the ADLT Indemnitees, or Buyers'
Indemnitees, as the case may be, shall exceed in the aggregate
$1,000,000 (the "Basket"). With respect only to indemnification claims
made pursuant to sections 9.2(a) and 9.3(a)(i) above and except for
claims (a) for Losses which are made in the case of fraud and
intentional misrepresentations, (b) Tax Damages, (c) Title Damages, (d)
Covered Liability Damages, (e) Real Estate Damages or (f) Noncompliance
Damages, in the event the ADLT Indemnitees' claims, or the Buyers'
Indemnitees' claims, as the case may be, shall exceed the Basket, then
the ADLT Indemnitees shall have the right to be indemnified for Losses,
or the Buyers' Indemnitees shall have the right to be indemnified for
Losses, as the case may be, but only for amounts in excess of the
Basket and, in all cases, subject to the further limitation that the
Buyers shall in no event be liable for Losses in excess of $5,000,000
(the "Cap"). With respect only to indemnification claims made pursuant
to sections 9.2(a) and 9.3(a)(i) above and except for claims for (a)
Losses which are made in the case of fraud and intentional
misrepresentations, (b) Tax Damages, (c) Title Damages, (d) Covered
Liability Damages, (e) Real Estate Damages or (f) Noncompliance
Damages, none of the ADLT Indemnitees, or the Buyers' Indemnitees, as
the case may be, shall have any claim against any Buyers, or ADLT, as
the case may be, for any Losses up to the amount of the Basket and the
Buyers shall have no liabilities to the ADLT Indemnitees for Losses in
excess of the Cap.
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8. MODIFICATION OF THE REDEMPTION AGREEMENT. Except as specifically
modified by this First Amendment, the terms and conditions of the Redemption
Agreement shall remain unchanged and in full force and effect.
9. COUNTERPARTS. This First Amendment may be executed by facsimile and
in two or more counterparts, each of which shall be deemed to be an original but
all of which together shall be deemed to be one and the same instrument.
[signatures on the following page]
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
ADVANCED LIGHTING TECHNOLOGIES, INC.
BY /s/ XXXXX X. XXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
RUUD LIGHTING, INC.
BY /s/ XXXX X. XXXX
------------------------------------------
Xxxx X. Xxxx, Chief Executive Officer
BUYERS:
/s/ XXXX X. XXXX
--------------------------------------------
Xxxx X. Xxxx
/s/ XXXXX X. XXXX
--------------------------------------------
Xxxxx Xxxx
/s/ XXXXXXXX X. XXXXXX
--------------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ XXXXXXXXXXX X. XXXX
--------------------------------------------
Xxxxxxxxxxx X. Xxxx
/s/ XXXXXXX X. XXXXXXX
--------------------------------------------
Xxxxxxx X. Xxxxxxx
SIGNATURE PAGE TO FIRST AMENDMENT TO
STOCK REDEMPTION AND PURCHASE AGREEMENT
