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 Xxxxx X. Xxxxxxx
("Xxxxxxx"), Xxxxxxx, Ltd., an Ohio limited liability company ("Xxxxxxx Ltd."),
Xxxx X. Xxxx ("Xxxx") 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 Xxxxxxx, Xxxxxxx Ltd. or Ruud and
"Stockholders" shall mean Xxxxxxx, Xxxxxxx Ltd. and Ruud.
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,
Xxxxxxx and Xxxxxxx 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
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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, Xxxxxxx and Xxxxxxx 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.
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(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
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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/ Xxxx X. Xxxx
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Xxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
XXXXXXX, LTD.
By: /s/ Xxxxx Xxxxxxx
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Title: Managing Member
GENERAL ELECTRIC COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
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Title: Xxxx X. Xxxxxxxxxx
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