Exhibit 10.5


 


 


CONFIDENTIAL TREATMENT
REQUESTED.  CONFIDENTIAL

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED

AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.


 


ADLT DEVELOPMENT AGREEMENT


 


This ADLT Development Agreement (this “ADLT Development Agreement”) is being entered into by and
between Advanced Lighting Technologies, Inc., an Ohio corporation, with
offices at 32000 Aurora Road, Solon, Ohio 44139 and its Affiliates (“ADLT”) and Fiberstars, Inc., a California corporation,
with offices at 32000 Aurora Road, Solon, Ohio 44139 (“FIBERSTARS”).  Each of FIBERSTARS and ADLT is a “Party” and are “Parties” to
this ADLT Development Agreement.


 


RECITALS


 


WHEREAS:


 


(a)                                  The Parties have entered into that certain
Master Services Agreement (the “Master Services Agreement”)
of even date herewith which, among other things, contemplates that the Parties
will enter into several ancillary agreements, including this ADLT Development
Agreement; and


 


(b)                                 The Parties desire that ADLT provide certain
consulting and development services to FIBERSTARS pursuant to the terms and
conditions of this ADLT Development Agreement. 
The initial development services contemplated by this Agreement are for
the Projects as defined below and as further defined and described in Attachment A, attached hereto.


 


NOW, THEREFORE,
in consideration of the premises and the covenants contained herein, intending
to be legally bound, the Parties hereto agree as follows:


 


1.              SCOPE.


 


This ADLT Development Agreement and all attachments
hereto is being entered into and is being made pursuant to that Master Services
Agreement to which this ADLT Development Agreement is attached as Exhibit A
and is incorporated therein by reference. 
Collectively, the Master Services Agreement and its attached Ancillary
Documents (as defined therein), constitute the Agreement.  This ADLT Development Agreement provides the
terms and conditions under which ADLT as the Supplying Party will perform
certain development Services and provide the Custom Deliverables hereunder to
FIBERSTARS as the Purchasing Party, as more fully described in this ADLT
Development Agreement.


 


2.              DEFINITIONS.


 


Capitalized terms used but not otherwise defined in
this ADLT Development Agreement shall have the same meanings as provided in the
Master Services Agreement.  For the
purposes of this ADLT Development Agreement, ADLT, hereinafter shall be the
Supplying Party and FIBERSTARS hereinafter shall be the Purchasing Party.  Unless
otherwise


 





















 


specified, references to
Sections are to Sections of this ADLT Development Agreement.  For purposes of this ADLT Development
Agreement, the following terms shall have the respective meanings indicated
below:


 


2.1.                  “Affiliates” is defined in Section 3.4
of the Master Services Agreement.


 


2.2.                  “Agreement” is defined in Section 1 of
the Master Services Agreement.


 


2.3.                  “ADLT Development Term” is defined in Section 7.1.


 


2.4.                  “Ancillary Document(s)” is defined in Section 1 of the
Master Services Agreement.


 


2.5.                  “Background IP” is defined in Section 15.1
of the Master Services Agreement.


 


2.6.                  “Change Order” is defined in Section 3.10 of the Master
Services Agreement.


 


2.7.                  “Commencement Date” is defined in Section 3.12 of the
Master Services Agreement.


 


2.8.                  “Confidential Information” is defined in Section 3.13 of
the Master Services Agreement.


 


2.9.                  “Custom Deliverable(s)” is defined in Section 3.15 of
the Master Services Agreement.


 


2.10.           “Deliverable(s)”
is defined in Section 3.16 of the Master Services Agreement.


 


2.11.           “Developed IP” means, collectively, all
Custom Deliverables, together with all inventions, original works of
authorship, artwork, photographs, developments, concepts, know-how,
improvements and trade secrets which are made by ADLT (solely or jointly with
others) within the scope of and during the period in which ADLT provides
Services to FIBERSTARS under this ADLT Development Agreement.


 


2.12.           “Fiber Optic Lighting Applications” shall
mean any lighting applications involving remote source lighting and either (i) fiber
optics, or (ii) light pipes, or (iii) other light guides.


 


2.13.           “Filing(s)” is defined in Section 5.5.


 


2.14.           “Intellectual Property
Right(s)” is defined in Section 3.25
of the Master Services Agreement.


 


2.15.           “IP Indemnitor” and “IP Indemnitee” is defined in Section 12.2
of the Master Services Agreement.


 


2.16.           “Master Services Agreement”
is defined in the recitals.


 


2.17.           “Non-Conformance” is defined in Section 3.6.


 


2.18.           “Periodic Payment(s)” are defined and set forth in Attachment B to this ADLT
Development Agreement.


 


2





















 


2.19.           “Project(s)”
is defined in the recitals and is further defined and described in Attachment A
to this ADLT Development Agreement.


 


2.20.           “Purchasing Party” is defined in Section 3.41
of the Master Services Agreement.


 


2.21.           “Quarterly Notice”
is the document delivered to ADLT in substantially the form attached hereto as Attachment C at the beginning
of each calendar quarter after the Quarterly Review by FIBERSTARS (as made
effective upon signature by FIBERSTARS’ authorized representative), which shall
provide, among other things: (i) FIBERSTARS’ authorization to continue the
Services and Custom Deliverables hereunder as scheduled and described in one or
more milestones for the forthcoming calendar quarter; (ii) FIBERSTARS’
confirmation of the Periodic Payments associated with the performance and
delivery of the Services and Custom Deliverables in the forthcoming calendar
quarter pursuant to Section 4.1; or (iii) in the alternative, provide
ADTL notice of termination or suspension of the Services and Custom
Deliverables pursuant to the Section 3.2 and the other terms and
conditions of this ADLT Development Agreement.


 


2.22.           “Quarterly Review”
is defined in Section 3.2.


 


2.23.           “Services”
notwithstanding the definition of Services found in the Master Services
Agreement, as used herein Services are defined in Attachment A
hereto.


 


2.24.           “Statement(s) of Work” or “SOW” is defined in Section 3.45 of the Master Services
Agreement.


 


2.25.           “Specification(s)”
is defined in Section 3.44 of the Master Services Agreement.


 


2.26.           “Supplying
Party” is defined in Section 3.47 of the Master Services
Agreement.


 


2.27.           “Term”
is defined in Section 21 of the Master Services Agreement.


 


2.28.           “Termination by Non-Renewal”
is defined in Section 7.3(c).


 


2.29.           “Termination
for Convenience” is defined in Section 7.2.


 


2.30.           “Termination
for Default” is defined in Section 22.2 of the Master Services
Agreement.


 


3.              OBLIGATIONS OF ADLT.


 


3.1.                  Services and Deliverables. 
During the ADLT Development Term and subject to the terms and conditions
of this ADLT Development Agreement, ADLT will perform the Services described on
the SOW attached hereto as Attachment A (for the purposes of this
ADLT Development Agreement, the “Services”), and
will provide to FIBERSTARS the related Custom Deliverables in connection
therewith, in accordance with the terms and conditions of this ADLT Development
Agreement.  The Services and the related
Custom Deliverables set forth on Attachment A shall be scheduled
and divided into


 


3





















 


monthly and quarterly milestones (as applicable) for
the Projects beginning on the Commencement Date and up through December 31,
2006.  All Deliverables provided
hereunder shall be considered Custom Deliverables under the Agreement.  ADLT shall perform all Services hereunder and
provide the Custom Deliverables in compliance with the Specifications, as set
forth and mutually agreed under a SOW issued hereunder or as amended by a
Change Order.  Notwithstanding anything
herein or in the Master Services Agreement to the contrary, no Change Order
issued under this ADLT Development Agreement, other than termination pursuant
to Section 3.2 hereof, shall be effective unless executed by both Parties’
chief executive officers or by both Parties’ designated and authorized
representatives.


 


3.2.                  Quarterly Reviews; Quarterly Notice to
Continue, Suspend or Terminate.  Not less than fifteen (15) days prior to the
end of each calendar quarter, the Parties shall meet together to review the
results of the Services and the Custom Deliverables delivered by ADLT over the
course of such calendar quarter (“Quarterly Review”).  Within five (5) business days after each
Quarterly Review, in addition to its other rights (including a Termination for
Convenience) FIBERSTARS shall have the right to immediately terminate, suspend
or continue the Services and Custom Deliverables for the forthcoming calendar
quarter by providing ADLT notice in its Quarterly Notice which shall explicitly
indicate and provide, as applicable:


 


(a)                   FIBERSTARS’ termination of this ADLT
Development Agreement;


 


(b)                  FIBERSTARS’ notice of suspension of the
Services and Custom Deliverables which shall include a good faith estimate
regarding the expected date of recommencement; or


 


(c)                   FIBERSTARS’ authorization to continue the
Services and Custom Deliverables hereunder as scheduled and described for the
forthcoming calendar quarter and the corresponding Periodic Payments therewith.


 


In the case of an authorization to continue the
Services and Custom Deliverables (under Section 3.2(c)), the Parties may
by mutual consent amend the Services, Custom Deliverables, Periodic Payments,
scheduled milestone dates, or any other term hereunder by attaching a Change
Order (executed pursuant to Section 3.1) to the Quarterly Notice.


 


Upon receipt of Quarterly Notice providing for
termination under Section 3.2(a), ADLT shall immediately cease all
Services and Custom Deliverables which termination shall be considered a
Termination for Convenience with all Periodic Payment and amounts owed by
FIBERSTARS treated as such under Section 7.3.  In case of a suspension under Section 3.2(b),
ALDT shall immediately cease all Services and Custom Deliverables and
FIBERSTARS shall immediately pay all Periodic Payments or amounts owed to ADLT
as if such suspension was a Termination for Convenience under Section 7.3.


 


3.3.                  Facilities and Personnel.  ADLT
shall furnish all of the facilities, equipment and personnel needed for ADLT to
perform the Services.  To the extent that
the Services and the Custom Deliverables require an interface with FIBERSTARS Equipment
or products


 


4





















 


then FIBERSTARS shall provide such assistance and
technical support, at FIBERSTARS’ own cost, as may be necessary to facilitate
and enable ADLT to perform the Services.


 


3.4.                  Project Management and Routine Progress
Reports.  ADLT will manage the Services to be performed
hereunder.  FIBERSTARS will provide
assistance to ADLT on an as-needed basis and according to the terms of this
ADLT Development Agreement.  In addition
to the Quarterly Review, ADLT will conduct periodic joint status meetings with FIBERSTARS,
which meetings will cover the current status of the Services, indicate the
progress of the work being performed (including any Custom Deliverable in
progress), estimate the time required for completion of the applicable Services
and Custom Deliverables, and identify actual and anticipated problem areas, the
impact thereof on ADLT’s work effort, and the actions being taken and
recommended to be taken to remedy such problems.  On or before the tenth (10th) day
of each month during the ADLT Development Term, ADLT will also provide monthly
written progress reports on the work performed during the preceding month, and
the status of the Services.


 


3.5.                  Technical Input. 
Questions, comments, or other technical communication between ADLT and FIBERSTARS
may be via facsimile, telephone, e-mail, or mail, or such other mutually
acceptable form of communication.  FIBERSTARS
shall designate a person to respond to information requests from ADLT, and such
person shall respond promptly to ADLT.


 


3.6.                  Delivery, Acceptance and Rejection.  ADLT
shall perform the Services and deliver to FIBERSTARS the Custom Deliverables on
the applicable milestone delivery dates scheduled on Attachment A
in accordance with the Specifications. 
Within fifteen (15) days of FIBERSTARS’ receipt of the applicable Custom
Deliverables, ADLT shall provide a written report which shall contain in
reasonable detail ADLT’s evaluation of such Custom Deliverable, including the
status and results from any tests, inspections or evaluations and/or any
problems or other issues or concerns related to such Custom Deliverable and the
development thereof.  FIBERSTARS will
have five (5) business days upon receipt of ADLT’s report to reject the
Custom Deliverable by delivering to ADLT a written statement describing a
failure of the Custom Deliverable to comply in one or more material respects
with the Specifications (a “Non-Conformance”);
if FIBERSTARS has not delivered its notice of Non-Conformance to ADLT after the
fifth (5th) business day of receipt of ADLT’s report, FIBERSTARS
will be deemed to have given its Acceptance to the Custom Deliverable.  In case of rejection, upon receipt of FIBERSTARS’
notice of Non-Conformance, ADLT will correct the specified Non-Conformance so
that it conforms to the Specifications, and redeliver the Custom Deliverable
for FIBERSTARS’ Acceptance.  FIBERSTARS will
provide reasonable information, as requested by ADLT, to assist in correcting
the Non-Conformance.  Upon redelivery of
the Custom Deliverable by ADLT, FIBERSTARS will then have an additional fifteen
(15) business days to determine whether the resubmitted Custom Deliverable meets
the Specifications or to reject such Custom Deliverable, in accordance with the
above described procedures.  All risk of
damage and loss in connection with a Custom Deliverable shall pass to FIBERSTARS
upon delivery of such Custom Deliverable to the address or location specified
by FIBERSTARS.


 


5





















 


3.7.                  LIMITED WARRANTY. 
EXCEPT AS OTHERWISE EXPLICITLY STATED IN SECTION 6, NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THE MASTER SERVICES AGREEMENT, THE SERVICES AND
DEVELOPED IP PROVIDED BY ADLT HEREUNDER ARE PROVIDED ON AN “AS IS” BASIS, WITHOUT WARRANTY.  ADLT DISCLAIMS ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTY OF NON-INFRINGEMENT, AND THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
REGARDING SUCH SERVICES AND DEVELOPED IP.


 


4.              FEES, EXPENSES, ACCOUNTING AND
PAYMENTS.


 


4.1.                  Development Fees.  As
consideration for the Services and Custom Deliverables to be provided by ADLT, FIBERSTARS
shall pay to ADLT the Periodic Payments and other amounts set forth on Attachment B,
at the times scheduled therein.  The
Parties shall schedule the Periodic Payments and other amounts set forth
on Attachment B and the corresponding Services and Custom Deliverables
for the Projects into monthly and quarterly milestones so that the total
Periodic Payments and other amounts owed by FIBERSTARS in any applicable
calendar quarter do not exceed $***, unless otherwise stated in the applicable
Quarterly Notice for such calendar quarter, or as may be authorized in such
other written form as may be mutually agreed upon by the Parties.


 


4.2.                  Expenses.  Notwithstanding anything
contrary in the Master Services Agreement, the Parties may agree in writing to
reimburse certain expenses incurred by ADLT under this ADLT Development
Agreement.


 


4.3.                  Payment.  FIBERSTARS shall pay the
Periodic Payments and other amounts owed to ADLT under Sections 4.1 and 4.2
above pursuant to receipt of an Invoice, except as otherwise specified on Attachment A.  Invoices shall be submitted by ADLT upon
delivery of the Custom Deliverable pursuant to the applicable milestone dates
set forth on Attachment B or as may otherwise agreed by the Parties
in writing.


 


4.4.                  Accounting.  Each of the Parties shall keep
proper documentation of all transactions including payments and expenses
related to this ADLT Development Agreement and shall keep its books, records
and accounts in accordance with generally accepted accounting principles
consistently applied.


 


5.              OWNERSHIP, LICENSES AND
ASSIGNMENT.


 


5.1.                  Ownership of Developed IP.  All
Developed IP belongs exclusively to FIBERSTARS, and is owned exclusively by FIBERSTARS.  All Custom Deliverables and Developed IP made
hereunder are “works made for hire” (to the greatest extent permitted by
applicable law) belonging to ADLT.  ADLT shall
have no right, title or interest in or to any of the Custom Deliverables or
Developed IP except as expressly set forth in this ADLT Development Agreement
and in the Cross License Agreement of even date herewith.


 










***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION


 


6





















 


5.2.                  License to Developed IP.  FIBERSTARS
acknowledges that pursuant to that certain Cross License Agreement of even date
herewith executed between the Parties as a part of the Agreement, FIBERSTARS have
granted to the ADLT certain rights and licenses to the Developed IP.


 


5.3.                  Assignment and Further Assurances.  ADLT
hereby assigns to FIBERSTARS all worldwide right, title and interest that ADLT may
have or acquire in the Custom Deliverables and the Developed IP, subject to ADLT’s
and/or its licensors’ ownership of the Background IP set forth in Section 5.4
below.  Subject to the terms and conditions
of this ADLT Development Agreement, ADLT shall use commercially reasonable
efforts to take such actions as FIBERSTARS may reasonably request required to
vest FIBERSTARS with ownership rights in the Custom Deliverables and the
Developed IP, including without limitation ensuring that any Subcontractors
employed by ADLT in connection with this Agreement, take such actions as may be
required to vest FIBERSTARS with such ownership.  FIBERSTARS will pay all reasonable costs
associated therewith.


 


5.4.                  Ownership of Background IP. 
Notwithstanding any other provision in this ADLT Development Agreement,
ADLT and Fiberstars agree that all Background IP is owned exclusively by ADLT,
subject to the license expressly granted to ADLT in the Cross License
Agreement.


 


5.5.                  Patent Filings.  The
Parties shall cooperate with each other in all Filings.  “Filing” means
the submission of any documentation, application, filing, registration or the
like required to perfect or, with respect to copyright registrations, to enforce,
the FIBERSTARS’ interest in the Developed IP under statutory Intellectual
Property Rights protection mechanisms, including, without limitation, any
communication with any patent or copyright office or other governmental
entities with respect thereto.  FIBERSTARS
shall bear all expenses with respect to all Filings.


 


6.              NON-INFRINGEMENT OF THIRD PARTY
IP.


 


6.1.                  Limited Warranty of Non-Infringement.  In
addition to ADLT’s representations and warranties as a Supplying Party under
the Master Services Agreement, ADLT represents and warrants that to the best of
its knowledge none of the Services, Custom Deliverables, Developed IP or
Background IP provided under this ADLT Development Agreement do or will at any
time infringe upon any of the Intellectual Property Rights or other proprietary
rights of any third party.


 


6.2.                  Limited Indemnity for Infringement.  In
addition to its other obligations to indemnify the IP Indemnitee under the
Master Services Agreement, ADLT shall, at its sole cost, indemnify, hold
harmless and defend FIBERSTARS (with counsel reasonably approved by
FIBERSTARS), and its affiliates, shareholders, directors, officers, employees
and agents from and against any loss, cost, liability or claim by any third
party (including without limitation court costs and reasonable fees of attorneys
and other professionals)


 


7





















 


arising out of or related to the breach of the
foregoing representation and warranty. 
ADLT’s obligations under this Section 6.2 are contingent upon (a) FIBERSTARS
giving prompt written notice to ADLT of any such claim, (b) FIBERSTARS
allowing ADLT to control the defense and any related settlement, and (c) FIBERSTARS
furnishing ADLT with all necessary information and reasonable assistance in the
defense of any such claim.


 


6.3.                  Exclusions.  ADLT shall not be obligated to
indemnify FIBERSTARS under this Section 6.2 to the extent that such third
party claim results from: (i) ADLT’s compliance with designs or
Specifications provided and approved in writing by FIBERSTARS; (ii) use by
FIBERSTARS of the Custom Deliverables in combination with other products not
supplied by or designated by ADLT to the extent that such claim would not have
occurred but for such combination; or (iii) FIBERSTARS’ modifications of
the Custom Deliverables made without the express authorization of ADLT; but,
only to the extent that such claim would have been avoided but for such
modifications.


 


7.              TERM AND TERMINATION.


 


7.1.                  Term.  The term of this ADLT
Development Agreement (“ADLT Development Term”)
shall be for the Term as defined in the Master Services Agreement and shall be
automatically renewed as set forth therein as part of the Agreement, except as
may be terminated by the Parties according to their rights under the Agreement,
including this ADLT Development Agreement, the Master Services Agreement and
the Fiberstars Development Agreement.


 


7.2.                  Termination for Convenience. 
Notwithstanding anything herein or in the Master Services Agreement to
the contrary, in addition to its other rights (including its rights under Section 3.2),
FIBERSTARS shall have the right to specifically terminate this ADLT Development
Agreement for convenience upon ninety (90) days prior written notice of
termination (“Termination for Convenience”).


 


7.3.                  Consequences of Termination. 
Notwithstanding anything herein or in the Master Services Agreement to
the contrary, upon a termination of this ADLT Development Agreement, FIBERSTARS
shall be obligated to pay ADLT:


 


(a)                        In the case of termination due to a material
breach by ADLT of this ADLT Development Agreement or Termination for Default of
the Agreement (for ADLT’s default), the lesser of (a) an amount equal to
the total percentage of the Services and Custom Deliverables completed
hereunder multiplied by the aggregate fees to be paid by FIBERSTARS as set
forth on Attachment B, less amounts previously paid by FIBERSTARS,
or (b) an amount equal to the number of hours worked by ADLT hereunder
multiplied by ADLT’s standard hourly rate, as set forth in Attachment B
or as mutually agreed in writing between the Parties;


 


(b)                       In case of termination by Termination for
Convenience by FIBERSTARS of this ADLT Development Agreement, FIBERSTARS shall
pay to ADLT the greater of (a) an amount equal to the total percentage of
the Services and Custom Deliverables


 


8





















 


completed hereunder multiplied by the aggregate fees
to be paid by FIBERSTARS as set forth in Attachment B, less amounts
previously paid by FIBERSTARS, or (b) an amount equal to the number of
hours worked by ADLT hereunder multiplied by ADLT’s standard hourly rate, as
set forth in Attachment B, or as mutually agreed in writing between
the Parties; or


 


(c)                        In case of a termination by way of notice of
non-renewal, all Periodic Payments owed to ADLT prior to the effective date of
such termination (“Termination by Non-Renewal”).


 


In case of a Termination for Convenience or for
Termination by Non-Renewal, FIBERSTARS also shall be liable to ADLT for all
materials and reasonable out-of-pocket expenses procured or incurred by ADLT (if
not covered under the Periodic Payments) in order to fulfill its obligations
under this ADLT Development Agreement prior to the effective date of
termination; provided, however, ADLT shall use commercially reasonable efforts
to mitigate any further expenses chargeable to FIBERSTARS under this ADLT
Development Agreement and with respect to any termination pursuant to Section 3.2
hereof, FIBERSTARS shall not be liable for such costs and expenses in excess of
US$***.  Notwithstanding anything herein
or in the Agreement to the contrary, upon a Termination for Convenience by
FIBERSTARS of this ADLT Development Agreement, ADLT shall have the right to
immediately terminate the Fiberstars Development Agreement, without penalty or
prejudice; all amounts owed by ADLT under the Fiberstars Development Agreement
shall be treated under Section 7.3 of the Fiberstars Development Agreement
as if such termination was a Termination for Convenience as defined under the
Fiberstars Development Agreement.


 


7.4.                  Obligations upon Termination.  Upon
any termination of this ADLT Development Agreement, including by Termination
for Convenience, the provisions of Sections 2, 3.7, 5, 6, 7.3 and 7.4 shall
remain in full force and effect.  Upon
expiration or termination of this ADLT Development Agreement, each Party will
immediately discontinue use of the other Party’s Confidential Information
provided to it hereunder.  Promptly
thereafter, but in any event not to exceed ten (10) days, each Party will
destroy or deliver to the other Party all copies of materials containing such
Confidential Information and certify such destruction or return in
writing.  In addition, ADLT shall
promptly deliver to FIBERSTARS all Custom Deliverables (as then-completed) and
Developed IP then in FIBERSTARS’ possession, together with copies of the associated
Background IP.


 










*** CONFIDENTIAL MATERIAL
REDACTED AND SEPARATELY FILED WITH THE COMMISSION


 


9





















 


8.              GENERAL PROVISIONS.


 


Made a part of, and incorporated by reference to
this ADLT Development Agreement is the attached Attachments A, B and C.  This ADLT Development Agreement and the
Orders issued hereunder shall be governed by the Master Services Agreement,
including such provisions covering confidentiality, assignment, governing law,
headings, waiver, approval, amendment and other provisions.  Unless otherwise specified hereunder, the
terms of the Master Services Agreement shall take precedence and control.


 


IN WITNESS WHEREOF, the Parties hereto have caused this ADLT Development Agreement to be
executed and delivered and have affixed their corporate seals under the hand of
their duly authorized representative for that purpose.


 


 


	
  FIBERSTARS, INC.

  	
  ADVANCED LIGHTING

  TECHNOLOGIES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
       /s/ John M. Davenport

  	
   

  	
  By:

  	
       /s/ Wayne Vespoli

  	
   

  
	
   

  	
  [signature]

  	
   

  	
   

  	
  [signature]

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   John M.
  Davenport

  	
   

  	
  Name:

  	
  Wayne Vespoli

  	
   

  
	
  Title:

  	
     CEO

  	
   

  	
  Title:

  	
    EVP

  	
   

  
	
  Date:

  	
   September 19, 2005

  	
   

  	
  Date:

  	
  September 19, 2005

  	
   

  
										



 


10





















 


ATTACHMENT A


 


STATEMENT OF WORK


 


This is Attachment A to the ADLT Development
Agreement.  Capitalized terms used but
not defined in this attachment have the same meanings as provided in the Agreement.  Subject to the terms and conditions of the
ADLT Development Agreement, the Services and Custom Deliverables to be
performed for and provided to FIBERSTARS by ADLT shall include the following:


 


Project # 1:  ***


 


***


 


Project # 1 Tasks


 


***


 


Project #2 ***


 


***


 


Project #2 Tasks


 


***


 


(the remainder of this page left blank intentionally)


 


 










***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION 


 


11





















 


Project #3:  ***


 


***


 


Project #3 Tasks


 


***


 


(the remainder of this page left blank intentionally)


 


 










***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION 


 


12





















 


ATTACHMENT B  TO ADLT DEVELOPMENT AGREEMENT


 


MILESTONES AND DEVELOPMENT FEES


 


***


 


 










*** CONFIDENTIAL MATERIAL REDACTED AND
SEPARATELY FILED WITH THE COMMISSION


 


13





















 


ATTACHMENT C


 


QUARTERLY NOTICE


 


This Quarterly Notice is being issued by Fiberstars, Inc.,
a California corporation (“FIBERSTARS”)
pursuant to the Quarterly Review as set forth in Section 3.2 of that
certain ADLT Development Agreement entered into by and between FIBERSTARS and
Advanced Lighting Technologies, Inc. and its Affiliates (“ADLT”) (“ADLT Development Agreement”).  Capitalized terms used but not defined in
this attachment have the same meanings as provided in the ADLT Development
Agreement.


 


Check the following paragraph that
applies:


 


o    FIBERSTARS
hereby consents to the performance and delivery of the Services and Custom
Deliverables related to the milestones as set forth on Attachment A
and the amounts and fees related thereto including such Periodic Payments
stated on Attachment B of the ADLT Development Agreement or as may
otherwise be agreed to the Parties in writing, for the calendar quarter
beginning on             
1, 200   and ending on           [31,]
2005.


 


o    FIBERSTARS
hereby provides written notice of suspension of the performance and delivery of
the Services and Custom Deliverables related to the milestones as set forth on Attachment A
and the amounts and fees related thereto including such Periodic Payments
stated on Attachment B of the ADLT Development Agreement.


 


o    FIBERSTARS
hereby provides written notice of termination of the ADLT Development
Agreement.


 


FIBERSTARS has caused this Quarterly Notice to be
executed and delivered and have affixed its corporate seal under the hand of
its duly authorized representative for that purpose.


 


 


	
  FIBERSTARS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [signature]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
							



 


14