EXHIBIT 10.31
EXECUTION COPY
SECOND AMENDED AND RESTATED INVESTOR AGREEMENT
This
SECOND AMENDED AND RESTATED INVESTOR AGREEMENT ("Agreement") is
made
as of this 18th day of March, 2004 by and
among FIBERSTARS, INC., a California
corporation (the "Company"), ADVANCED
LIGHTING TECHNOLOGIES, INC., an Ohio
corporation ("ADLT"), ADLT CLASS 7
LIQUIDATING TRUST, u/a/d January, 2004 (the
"Trust"), and UNISON FIBER OPTIC LIGHTING
SYSTEMS, LLC., a Delaware limited
liability company and a wholly-owned
subsidiary of ADLT ("Unison").
RECITALS
A.
WHEREAS, on January 1, 2000 the Company, ADLT and Unison entered
into a
Restated Investor Agreement (the "Original
Agreement") which contained, among
other things, certain restrictions on the
transfer of Voting Securities (as
defined therein) held by ADLT and
Unison;
B.
WHEREAS, on February 1, 2000, the Company issued to Unison four
warrants, Warrant Nos. 1 through 4, each
for the acquisition of up to
two-hundred fifty thousand (250,000) shares
of the Company's common stock (for
an aggregate of up to one million
(1,000,000) shares of the Company's common
stock) (the "Warrants") subject to the
achievement of certain metrics set forth
therein, the extent of achievement of which
metrics has become the subject of
disagreement between ADLT and the
Company;
C.
WHEREAS, prior to the date hereof, Unison transferred all of
its
interest in the Warrants to ADLT, and,
accordingly, the parties (including
Unison) desire to terminate Unison's
obligations under the Original Agreement;
D.
WHEREAS, ADLT has proposed (i) to exercise and acquire five-hundred
and
eighteen thousand (518,000) shares of
Company common stock under the Warrants by
exercising Warrant No. 2 in full, and
Warrant Nos. 1 and 3, in part (for 208,000
and 60,000 shares, respectively), (ii) to
transfer all of its Voting Securities
(including the 518,000 Company common
shares to be issue as set forth at "(i),"
hereof) to the Trust, an amount equal to
1,541,011 Company common shares, (iii)
to divide and assign such portions of
Warrant No. 1 representing the right to
acquire up to an aggregate of 42,000
Company common shares to two former Unison
employees in satisfaction of certain of its
commitments to the same
(specifically, the right to acquire up to
28,000 Company common shares to a John
Davenport and the right to acquire up to
14,000 Company common shares to a Roger
Beulow), (iv) to divide and assign such
portions of Warrant Nos. 3 and 4
representing the right to acquire up to an
aggregate of 7.5% of the Company
common shares remaining under such Warrants
to two former Unison employees in
satisfaction of certain of its commitments
to the same (specifically, 5% of such
Warrants to a John Davenport and 2.5% of
such Warrants to a Roger Beulow), and
(v) to retain the under the balance of
divided Warrant Nos. 3 and 4 the right to
acquire up to an aggregate of four hundred
and seven thousand (407,000) shares
of Company common stock, subject to the
terms and conditions thereof, and the
Company has agreed to grant its consent to
the above exercise, transfer and/or
assignment, subject to the terms and
conditions hereinafter set forth; and
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WHEREAS,
the parties hereto wish to amend and restate the Original
Agreement to effect the agreements
described in the foregoing recitals and
certain other arrangements hereinafter set
forth.
NOW,
THEREFORE, in consideration of the mutual provisions of this
Amended
and Restated Investor Agreement, the
Company, ADLT, the Trust and Unison agree
as follows:
1.
DEFINITIONS. As used herein, the term:
(a) "affiliate," with respect to a specified person, means a
person
that controls, is controlled by or is under
common control with such specified
person. For purposes of this definition,
"control" when used with respect to any
person means the power to direct the
management and policies of such person,
directly or indirectly, whether through the
ownership of voting securities, by
contract or otherwise; and the terms
"affiliated," "controlling" and
"controlled" have meanings correlative to
the foregoing.
(b)
"Board" means the board of directors of the Company.
(c) "Change in Control" shall mean the occurrence of, any of
the
following:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than ADLT or its
affiliate(s), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 40% or more of the
combined voting power of the Company's then outstanding
securities;
(ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the
Voting Securities outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the
Voting Securities of such surviving entity outstanding
immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in
which no "person" (as hereinabove defined) acquires more than
50% of the combined voting power of the Company's then
outstanding securities shall not constitute a Change in
Control of the Company; or
(iii) the stockholders of the Company approve a plan of
complete liquidation of the company or an agreement for the
sale or disposition by the Company of, or the Company sells or
disposes of, all or substantially all of the Company's assets.
(d) "Directors" means the directors serving on the Board.
(e) "Effective Date" means March 18, 2004.
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(f) "Minimum Interest" means Voting Securities representing
voting
power of not less 7.5% of the voting power
of all then-outstanding Voting
Securities (as determined if all
outstanding Voting Securities were voting
together).
(g) "Plan" means the Fourth Amended Chapter 11 Plan of
Reorganization filed by Saratoga Lighting
Holdings LLC, ADLT and certain other
"debtor" parties thereto with the United
States Bankruptcy Court for the
Northern District of Illinois, Eastern
Division, together with any and
amendments thereto approved by such
court.
(h) "Proposed Change of Control" shall mean the receipt by the
Board
or Company management of a bona fide
proposal by a third party setting forth a
plan of action pursuant to which Voting
Securities representing Voting power of
the Company in excess of 40% of the Company
would be beneficially held, directly
or indirectly, by such third party (by
merger, purchase of assets or purchase of
stock) upon consummation of such plan.
(i) "Rights Agreement" means the Rights Agreement, dated
September
20, 2001, as amended, between the Company
and Mellon Investor Services LLC.
2.
TRANSFER OF VOTING SECURITIES AND DIVISION AND ASSIGNMENT OF
WARRANT
NO. 3. The Company, to the extent it has
not already done so, hereby agrees to
use its best efforts to cause the Rights
Agreement to be amended prior to the
Effective Date to exclude the Trust from
becoming an "Acquiring Person" (as
defined in the Plan) by virtue of the
Transfer (as defined below), it being
understood and agreed that the purpose of
such amendment is to preclude the
Transfer from causing an issuance of
"Rights" (as defined in the Plan) under the
Plan. The Company hereby consents to the
transfer on or after the Effective Date
1,541,011 Fiberstars Common Shares held by
ADLT to the Trust (the "Transfer").
The Transfer shall be effected pursuant to
one or more instruments of assignment
in form and substance reasonably acceptable
to the Company. ADLT hereby
covenants to effect the division and
partial assignments of described at Recital
D, hereof, and the Company hereby consents
to such division and assignment.
Concurrently with the Transfer, the Trust
shall concurrently execute and deliver
to the Company an instrument of assumption
in form and substance reasonably
acceptable to the Company, and which
instrument shall, in any event, provide for
the Trust's agreement to be bound by the
terms and conditions applicable to
Company security holders under the Rights
Agreement, as amended.
3. BOARD
MATTERS. Effective on the Effective Date, all of ADLT's rights
to
nominate persons to the Board shall
terminate and be of no further force or
effect. The Trust hereby acknowledges that
it does not and will not receive any
right to nominate persons to the
Board..
4. UNISON
MATTERS. Effective as of the date hereof, all of Unison's
rights
and obligations under the Original
Agreement shall terminate and be of no
further force or effect.
5.
STANDSTILL AGREEMENT.
(a) Voting Trust, etc. Excluding the Transfer, none of ADLT,
any
affiliated entity and the Trust shall
deposit any securities of the Company
entitled to vote with respect to the
election of any directors of the Company
("Voting Securities") in a voting trust,
or, except as
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otherwise provided herein, subject any
Voting Securities to any arrangement or
agreement with respect to the voting of
such Voting Securities.
(b) Solicitation of Proxies. Without the Company's prior
written
consent, none of ADLT, any affiliated
entity or the Trust shall solicit proxies
with respect to any Voting Securities, nor
shall any of them become, with
respect to the election or removal of any
of the Company's directors, a
"participant" within the meaning of Rule
14a-11 of Regulation 14A under the
Exchange Act; provided, however, that ADLT
shall not be deemed to be a
"participant" under such role by reason of
the membership of its designee on the
Board.
(c) Acts in Concert with Others. Excluding the Transfer, none
of
ADLT, any affiliated entity and the Trust
shall join a partnership, limited
partnership, syndicate or other group, or
otherwise act in concert with any
third person, for the purpose of acquiring,
holding, voting or disposing of
Voting Securities. The foregoing
prohibition shall not prevent ADLT, any
affiliate or the Trust from joining a
partnership, limited partnership,
syndicate or other group not formed or
perpetuated for any such purpose which
acquires, holds or disposes of Voting
Securities, provided that none of ADLT,
any affiliated entity and the Trust is
able, either directly or indirectly, to
vote such Voting Securities.
6. NOTICE
OF VOTING SECURITIES PURCHASES AND SALES; FURTHER ASSURANCES.
From and after the Effective Date, and
until such times as the Trust holds less
than the Minimum Interest, the Trust shall
advise the management of the Company
as to its and its affiliated entities'
plans to acquire or dispose of beneficial
ownership of any Voting Securities, or
rights thereto, reasonably in advance of
any such action. All purchases of Voting
Securities of the Company by ADLT, its
affiliated entities and the Trust shall be
made in compliance with applicable
laws and regulations. Each of the parties
hereto shall cooperate with the other
parties hereto and provide reasonable
assistance as may be required in order to
implement the provisions of this
Agreement.
7. VOTING.
Unless the Company otherwise consents in writing, from and
after the Effective Date and until such
time as the Trust no longer holds at
least the Minimum Interest, the Trust shall
take such action as may be required
so that all of its Voting Securities are
voted with management on all matters,
other than the election of directors, to be
voted on by holders of Voting
Securities in not less than the same
proportion as the votes cast by the other
holders of Voting Securities with respect
to such matters.
8.
RESTRICTIONS ON TRANSFER OF VOTING SECURITIES. Except for the
Transfer,
neither ADLT nor any affiliated entity
shall dispose of beneficial ownership or
voting control of Voting Securities or any
right thereto, except in accordance
with applicable state and federal
securities laws. The Trust shall not dispose
of beneficial ownership or voting control
of Voting Securities or any right
thereto except (i) to the Company or any
person or group approved by the
Company; (ii) to a corporation or other
entity of which the Trust owns not less
than 50% of the voting power entitled to be
cast in the election of directors or
managers, as the case may be (a "Controlled
Enterprise"), so long as such
Controlled Enterprise agrees to hold such
Voting Stock subject to all the
provisions of this Agreement, including
this Section 8, and agrees to transfer
such Voting Securities to the Trust or
another Controlled Enterprise of the
Trust if it ceases to be a Controlled
Enterprise of the Trust; (iii) pursuant to
a bona fide public offering registered
under
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the Securities Act of either Voting
Securities or securities exchangeable or
exercisable for Securities (in which the
Trust obtains more than 10% of the
offering and the Trust does not have the
ability to select the purchasers); (iv)
pursuant to Rule 144 under the Securities
Act (provided that if Rule 144(k) is
available, such transfer nevertheless is
within the volume limits and manner of
sale requirements applicable to non-144(k)
transfers under Rule 144); (v) in
transaction not described in (i), (ii),
(iii), (iv), (vi) or (vii) hereof so
long as such transactions do not, directly
or indirectly, result in any person
or group owning or having the right to
acquire or intent to acquire beneficial
ownership of Voting Securities with
aggregate voting power of 5% or more of the
aggregate voting power of all outstanding
Voting Securities (as determined if
all Voting Securities were voting together)
except during any period that the
effectiveness of a Form S-3 Registration
Statement filed or to be filed pursuant
to Exhibit A covering such Voting
Securities is revoked, withdrawn, suspended
during any "black-out" period or
unreasonably delayed, in which case such
aggregate voting power threshold shall be
10% rather than 5%; (vi) the transfer
of any warrant for Voting Securities issued
by the Company to a person or
persons approved in advance by the Company
to the extent that the exercise or
conversion of such warrant by the Trust
would violate the Hart Scott Rodino Act
or, in the opinion of counsel, would
otherwise be a potential violation of
antitrust law, or (vii) in response to an
offer to purchase or exchange for cash
or other consideration any Voting
Securities that (a) is made by or on behalf of
the Company, or (b) is made by another
person or group and is not opposed by the
Board within the time such Board is
required, pursuant to regulations under the
Exchange Act, to advise Company
stockholders of such Board's position on such
offer. The Trust's obligations pursuant to
this Section 8 shall terminate
effective upon the fi
