Document:

<PAGE>

                                                                    EXHIBIT 10.4

                     SEVERANCE AND NONCOMPETITION AGREEMENT

      THIS SEVERANCE AND NONCOMPETTION AGREEMENT is entered into and effective
as of July 27, 2005, among, ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio
corporation ("ADLT"), and WAYNE J. VESPOLI ("EMPLOYEE");

                                   WITNESSETH:

      WHEREAS, ADLT and Employee desire to reach agreement on compensation, if
any, which will be due Employee at the time of Employee's termination of service
ADLT or any of its affiliates; and

      WHEREAS, ADLT requires, as a condition of such agreement and Employee's
continued employment by ADLT, an agreement with respect to certain competitive
activities following Employee's termination of service,

            NOW, THEREFORE, in consideration of the mutual promises herein
      contained, the parties agree as follows:

1.    SEVERANCE PAYMENTS.

      Subject to the provisions of this Agreement, upon Employee's Termination,
      other than a Termination for "cause" or a Termination resulting from
      Employee's resignation without "good reason," each as defined below,
      Employee shall be entitled to receive severance payments equal to
      Employee's then-current base salary for the one-year period commencing on
      the effective date of such Termination, payable in the same amounts and at
      the same intervals as such base salary would have otherwise been paid if
      such Termination had not occurred.

2.    OTHER BENEFITS.

      During the term of any severance payments pursuant to Section 1 of this
      Agreement, Employee shall be entitled to such medical and hospitalization
      benefits, as are provided executive officers of ADLT and its subsidiaries
      and at the same cost, if any, charged to such executive officers.

3.    CERTAIN DEFINITIONS.

      (a)   For purposes hereof, the term "Termination" shall mean the cessation
            of employment of Employee by ADLT or any of its affiliates.

      (b)   For purposes hereof, the term "cause" shall mean:

                                                                     Page 1 of 6

<PAGE>

            (i)   Employee's committing an act constituting a misdemeanor
                  involving fraud, dishonesty, or theft or a felony;

            (ii)  Employee's engaging in habitual or repeated alcohol or drug
                  abuse;

            (iii) Employee's disregarding the instructions of the Board of
                  Directors of ADLT;

            (iv)  Employee's neglecting duties (other than by reason of
                  disability or death), with five (5) business days notice to
                  cure;

            (v)   Employee shall fail to devote his full business time to his
                  employment and perform diligently such duties as are, or may
                  be, required by the Board of Directors of ADLT or their
                  designee consistent with Employee's duties and authority at
                  the date of this Agreement or such other duties as may be
                  mutually agreed, with five (5) business days notice to cure;
                  provided such duties are within the bounds of reasonableness
                  and acceptable business standards;

            (vi)  Employee shall, without the prior written approval of the
                  Board of Directors of ADLT, directly or indirectly, render
                  services of a business, professional or commercial nature to
                  any other person or firm, whether for compensation or
                  otherwise, other than in the performance of duties naturally
                  inherent in the businesses of ADLT or any subsidiary or
                  affiliate of ADLT, with five (5) business days notice to cure;
                  provided, however, Employee may continue to render services to
                  and participate in philanthropic and charitable causes, in
                  each case, in a manner and to the extent consistent with his
                  past practice;

            (vii) Employee shall fail to comply with all policies and procedures
                  of ADLT, including but not limited to, all terms and
                  conditions set forth in any employee handbook and any other
                  memoranda pertaining to ADLT's policies, procedures, rules and
                  regulations, with five (5) business days notice to cure; or

            (viii) Employee's willful misconduct or gross negligence.

      (c)   For purposes hereof, the term "good reason" shall mean, without the
            express written consent of Employee, a material reduction of
            Employee's duties, authority, compensation, benefits or
            responsibilities.

      (d)   In the event of Employee's death or permanent disability (as defined
            herein below), Employee's service shall be deemed terminated for
            cause and Employee or his estate, as the case may be, shall be
            entitled to no further salary or other compensation provided for
            herein except as to that portion of any unpaid salary accrued or
            earned by Employee up to and including the date of death or
            permanent disability, and any benefits under any insurance policies
            or other plans.

      (e)   "Permanent disability" means the inability of Employee to perform
            satisfactorily his usual or customary occupation for a period of 120
            days in the aggregate out of 150 consecutive days as a result of a
            physical or mental illness or other disability which in the written
            opinion of a physician of recognized ability and reputation, is
            likely to continue for a significant period of time.

                                                                     Page 2 of 6

<PAGE>

4.    COVENANTS REGARDING NON-COMPETITION AND CONFIDENTIAL INFORMATION.

      (a)   Non-Competition.

            (i)   Recognizing that Employee will have been involved as an
                  executive officer of ADLT and that ADLT and its affiliates,
                  are engaged in the supply of products and/or services in every
                  state of the United States and internationally, therefore,
                  upon Termination, whether such Termination is initiated by
                  ADLT or Employee, for any reason, he agrees that he will not,
                  for a period of ONE (1) YEAR immediately following such
                  Termination, engage, in the United States or in any country
                  where ADLT or any of its subsidiaries or affiliates conduct
                  business, either directly or indirectly on behalf of himself
                  or on behalf of an another, as an employee, consultant,
                  director, partner or shareholder (other than with respect to
                  holding up to one percent (1%) of a publicly traded
                  corporation) of any corporation, limited liability company,
                  partnership or other business entity, in any business of the
                  type and character or in competition with the business carried
                  on by ADLT or any of its subsidiaries or affiliates (as
                  conducted on the date of such Termination).

            (ii)  Employee will not, for a period of ONE (1) YEAR immediately
                  following the Termination, whether such Termination is
                  initiated by ADLT or Employee, either directly or indirectly
                  or on behalf of another, as an employee, consultant, director,
                  partner or shareholder (other than with respect to holding up
                  to one percent (1%) of a publicly traded corporation) of any
                  corporation, limited liability company, partnership or other
                  business entity, recruit, hire or otherwise entice any
                  employee(s) of ADLT or its subsidiaries or affiliates, to
                  terminate his or her employment with ADLT or to accept
                  employment with anyone or any entity other than ADLT.

            (iii) Employee will not, for a period of ONE (1) YEAR immediately
                  following the Termination, whether such Termination is
                  initiated by ADLT or Employee, either directly or indirectly
                  or on behalf of another, as an employee, consultant, director,
                  partner or shareholder (other than with respect to holding up
                  to one percent (1%) of a publicly traded corporation) of any
                  corporation, limited liability company, partnership or other
                  business entity, solicit, do business with or employ any
                  current or former employee of ADLT, or any of its subsidiaries
                  or affiliates, or any customer or client of ADLT in connection
                  with any business of the type and character or in competition
                  with the business carried on by ADLT or any of its
                  subsidiaries or affiliates (as conducted on the date of the
                  Termination).

            (iv)  Employee will not, directly or indirectly, disclose, divulge,
                  discuss or copy to or for any person or entity, or otherwise
                  use or suffer to be used in any manner or for any purpose,
                  except for the benefit of ADLT or any of its subsidiaries or
                  affiliates, any ideas, methods, customer lists or other
                  customer

                                                                     Page 3 of 6

<PAGE>

                  information, business plans, product research or engineering
                  data or other trade secrets, intellectual property, or any
                  other confidential or proprietary information of ADLT or any
                  of its subsidiaries or affiliates, it being acknowledged by
                  Employee that all such information regarding the business of
                  ADLT or its subsidiaries or affiliates conceived, suggested,
                  developed, compiled or obtained by or furnished to Employee
                  while Employee shall have been employed by or associated with
                  ADLT or its subsidiaries or affiliates is confidential
                  information and ADLT's or its subsidiaries' or affiliates'
                  exclusive property. Employee's obligations under this Section
                  4(a)(iv) will not apply to any information which (A) is known
                  to the public other than as a result of Employee's acts or
                  omissions, (B) is approved for release, in writing, by ADLT,
                  (C) was available, or becomes available, to Employee on a
                  non-confidential basis independent of its disclosure to
                  Employee by ADLT, but only if the source of such information
                  is not bound by the provisions of this Agreement or otherwise
                  prohibited by a contractual, legal or fiduciary obligation
                  from disclosing Confidential Information to Employee or
                  Employee's Representatives or (D) Employee is required, in the
                  opinion of legal counsel, to disclose by law, regulation, or
                  governmental or court order, provided that ADLT is given, to
                  the extent that it is practicable, reasonable advance notice
                  of any court proceeding and an opportunity to contest
                  disclosure or obtain an appropriate protective order, at no
                  cost to Employee but with Employee's reasonable cooperation.
                  The Employee shall have the burden of proof as to whether any
                  of the foregoing exceptions apply to any disclosure or
                  proposed disclosure of Confidential Information.

      (b)   Employee expressly agrees and understands that the remedy at law for
            any breach by him of this Section 4 will be inadequate and that the
            damages flowing from such breach are not readily susceptible to
            being measured in monetary terms. Accordingly, it is acknowledged
            that upon adequate proof of Employee's violation of any legally
            enforceable provision of this Section 4, ADLT shall be entitled to
            immediate injunctive relief and may obtain a temporary order
            restraining any threatened or further breach. Nothing in this
            Section 4 shall be deemed to limit ADLT's remedies at law or in
            equity for any breach by Employee of any of the provisions of this
            Section 4 which may be pursued or availed of by ADLT or any of its
            affiliates including but not limited to ADLT. Employee and ADLT have
            carefully read and considered the provisions of this Section 7 and,
            having done so, agree that the restrictions set forth are fair and
            reasonable and are reasonably required for the protection of the
            interests of ADLT. In the event that any provision of this Section 4
            shall be held to be unenforceable because of the duration of such
            provision or area covered thereby, Employee and ADLT expressly agree
            that any court making such determination shall have the power to
            reduce the duration and/or area of such provision and, in its
            reduced form, said provision shall then be enforceable.

      (b)   In the event Employee shall violate any legally enforceable
            provision of this Section 4 as to which there is a specific time
            period during which he is prohibited from taking

                                                                     Page 4 of 6

<PAGE>

            certain actions or from engaging in certain activities as set forth
            in such provision then, in such event, such violation shall toll the
            running of such time period from the date of such violation until
            such violation shall cease.

5.    SEVERABLE PROVISIONS.

      The provisions of this Agreement are severable and if any one or more
      provisions may be determined to be illegal or otherwise unenforceable, in
      whole or in part, the remaining provisions and any partially unenforceable
      provision to the extent enforceable in any jurisdiction shall,
      nevertheless, be binding and enforceable.

6.    ARBITRATION.

      Any controversy or claim arising out of or relating to this Agreement, or
      the breach thereof, shall be settled by arbitration by a single arbitrator
      in the City of Solon, State of Ohio, in accordance with the Rules of the
      American Arbitration Association, and judgment upon the award rendered by
      the Arbitrator may be entered in any court having jurisdiction thereof.
      The Arbitrator shall be deemed to possess the powers to issue mandatory
      orders and restraining orders in connection with such arbitration;
      provided, however, that nothing in this Section 6 shall be construed so as
      to deny ADLT the right and power to seek and obtain injunctive relief in a
      court of equity for any breach or threatened breach of Employee of any of
      his covenants contained in Section 4 hereof.

7.    WAIVER.

      The failure of either party to enforce any provision or provisions of this
      Agreement shall not in any way be construed as a waiver of any such
      provision or provisions as to any future violations thereof, nor prevent
      that party thereafter from enforcing each and every other provision of
      this Agreement. The rights granted the parties herein are cumulative and
      the waiver of any single remedy shall not constitute a waiver of such
      party's right to assert all other legal remedies available to it under the
      circumstances.

8.    MISCELLANEOUS.

      This Agreement supersedes all prior agreements and understandings between
      the parties and may not be modified or terminated orally. No modification,
      termination or attempted waiver shall be valid unless in writing and
      signed by the party against whom the same it is sought to be enforced,.

9.    GOVERNING LAW.

      This Agreement shall be governed by and construed according to the laws of
      the State of Ohio.

                                                                     Page 5 of 6

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.

WITNESS:                                        ADVANCED LIGHTING
                                                TECHNOLOGIES, INC.

By: _________________________________           By: /s/ Sabu Krishnan
                                                    ----------------------------
Name: _______________________________           Name: Sabu Krishnan
                                                Its: Chief Operating Officer

By: _________________________________           /s/ Wayne J. Vespoli
                                                --------------------------------
Name: _______________________________           WAYNE J. VESPOLI

                                                                     Page 6 of 6<PAGE>

                                                                    EXHIBIT 10.5

                      ADVANCED LIGHTING TECHNOLOGIES, INC.

                         Common Stock Purchase Agreement

      THIS AGREEMENT is dated as of July 27, 2005, between ADVANCED LIGHTING
TECHNOLOGIES, INC. (the "Company"), and Wayne R. Hellman ("Purchaser").

                              W I T N E S S E T H:

      WHEREAS, the Company has given Purchaser an award attached hereto as Annex
1 (the "Award") pursuant to the Company's 2005 Equity Incentive Plan (the
"Plan") and

      WHEREAS, the Award permits the Purchaser to purchase up to 22.136 shares
within 30 days of the Date of Grant specified in the Award; and

      WHEREAS, pursuant to the Award, Purchaser desires to purchase shares of
the Company as herein described, on the terms and conditions set forth in this
Agreement, the Award and the Plan. Certain capitalized terms used in this
Agreement are defined in the Plan.

      NOW, THEREFORE, it is agreed between the parties as follows:

      1.    PURCHASE OF SHARES.

      Pursuant to the terms of the Award, Purchaser hereby agrees to purchase
from the Company and the Company agrees to sell and issue to Purchaser 22.136
shares [cannot exceed number of Shares above] of the Company's common stock (the
"Stock") for the Purchase Price Per Share specified in the Award payable by
personal check, cashier's check or money order. Payment shall be delivered at
the Closing, as such term is hereinafter defined. The closing hereunder (the
"Closing") shall occur at the offices of the Company on August 1, 2005, or such
other time and place as may be designated by the Company (the "Closing Date").

      2.    REPURCHASE OR FORFEITURE OF UNVESTED STOCK.

      All unvested shares of the Stock purchased by the Purchaser pursuant to
this Agreement (sometimes referred to as the "Unvested Stock") shall be subject
to the following forfeiture or mandatory repurchase requirement (the "Unvested
Stock Requirement"):

      In the event the Purchaser ceases to be an Employee of the Company as
defined in the Plan, i.e. terminates service with the Company ("Service") for
any reason, other than a Permitted Reason, all Unvested Stock shall immediately
be forfeited and cancelled without consideration to the Purchaser of any kind.

      If Purchaser ceases to be an Employee of the Company for a Permitted
Reason, the Company shall purchase the Unvested Stock as hereinafter provided.
If any Unvested Stock is subject to a vesting requirement which must be met by a
date certain (the "Vesting Deadline"), and such vesting requirement is not met
on or prior to such date, the Company shall purchase

<PAGE>

such Unvested Stock as hereinafter provided. Purchaser understands that the
Stock is being sold in order to induce Purchaser to become and/or remain
associated with the Company and to work diligently for the success of the
Company and that the unvested Stock will vest in accordance with the schedule
set forth in the Award. Accordingly, the Company shall be required within 60
days after the (i) termination of Service for a Permitted Reason or (ii) the
Vesting Deadline, as the case may be, to purchase from the Purchaser (A) all
shares of Stock purchased hereunder which have not vested on the date of
termination of Service in accordance with the terms of such vesting schedule in
the Award or (B) all shares of Unvested Stock which could no longer vest after a
Vesting Deadline, as the case may be; provided further, however, if at the time
there shall exist any Company Payment Condition, the Company may defer the
payment for the purchase until such time as the Company Payment Condition no
longer exists. The purchase price for such Unvested Stock shall be the Purchase
Price Per Share paid by Purchaser for such shares pursuant to the Award (the
"Purchase Price"). The purchase price shall be paid by check and/or by
cancellation of any indebtedness of Purchaser to the Company. The Company's
rights under this paragraph shall be freely assignable, in whole or in part,
and, following such assignment, such rights will not be limited by any Company
Payment Condition.

      Nothing in this Agreement shall be construed as a right by Purchaser to be
employed by Company, or a parent or subsidiary of Company.

      3.    ESCROW OF STOCK.

      As security for Purchaser's faithful performance of the terms of this
Agreement and to ensure the availability for delivery of Purchaser's shares upon
repurchase by the Company, Purchaser agrees at the Closing hereunder, to deliver
to and deposit with the Escrow Agent named in the Joint Escrow Instructions
attached hereto as Exhibit C, the certificate or certificates evidencing the
Unvested Stock and four Assignments Separate from Certificate duly executed
(with date and number of shares in blank) in the form attached hereto as Exhibit
D. Such documents are to be held by the Escrow Agent and delivered by the Escrow
Agent pursuant to the Joint Escrow Instructions, which instructions shall also
be delivered to the Escrow Agent at the Closing hereunder.

      Within 30 days after the vesting of a portion of an Award (as defined in
the Award), if Purchaser so requests, the Escrow Agent will deliver to Purchaser
certificates (including any voting trust certificates) representing so many
shares of Stock as are no longer subject to the Unvested Stock Requirement (less
such shares as have been previously delivered).

      4.    ADJUSTMENT OF SHARES.

      Subject to the provisions of the Articles of Incorporation of the Company,
if, from time to time during the term of the Unvested Stock Requirement:

            (a) there is any stock dividend or liquidating dividend of cash
            and/or property, stock split or other change in the character or
            amount of any of the outstanding securities of the Company, or

                                       2
<PAGE>

            (b) there is any consolidation, merger or sale of all or
            substantially all, of the assets of the Company,

then, in such event, any and all new, substituted or additional securities or
other property to which Purchaser is entitled by reason of Purchaser's ownership
of the shares shall be immediately subject to such Unvested Stock Requirement
with the same force and effect as the shares from time to time subject to the
Unvested Stock Requirement. While the total Purchase Price shall remain the same
after each such event, the Purchase Price Per Share of Unvested Stock shall be
appropriately and equitably adjusted as determined by the Board of Directors of
the Company.

      5.    THIRD PARTY TRANSFER RESTRICTIONS.

            5.1   Prior to a Major Event. (a) Vested Shares. Prior to the
                  occurrence of a Major Event, the Purchaser may not transfer
                  vested Shares, other than by a Permitted Transfer or otherwise
                  with the prior written consent of the Company.

                  (b) Unvested Shares. The Purchaser may not transfer unvested
                  Shares, other than by a Permitted Transfer.

            5.2   After a Major Event. (a) Vested Shares. In the event the
                  Purchaser proposes to sell, pledge or otherwise transfer to a
                  party other than a Permitted Transferee, pursuant to a bona
                  fide purchase offer, any vested Shares acquired under the Plan
                  or any interest in such Shares at any time after the
                  occurrence of a Major Event and prior to the Initial Public
                  Offering, the Company shall have the "Right of First Refusal"
                  with respect to all (and not less than all) of such Shares.
                  The Purchaser must give a written "Transfer Notice" to the
                  Company describing fully the proposed transfer, including the
                  number of Shares proposed to be transferred, the proposed
                  transfer price and the name and address of the proposed
                  transferee and including a copy of the bona fide purchase
                  offer. The Transfer Notice shall be signed both by the
                  Purchaser and by the proposed transferee and must constitute a
                  binding commitment of both parties to the transfer of the
                  Shares. Such right of First Refusal with respect to vested
                  Shares shall terminate upon the sale of Common Stock by the
                  Company pursuant to an Initial Public Offering.

                  The Company and its assignees shall have the right to purchase
                  all, and not less than all, of the Shares on the terms
                  described in the Transfer Notice (subject, however, to any
                  change in such terms permitted in the next paragraph) by
                  delivery of a Notice of Exercise of the Right of First Refusal
                  within 30 days after the date when the Transfer Notice was
                  received by the Company.

                                       3
<PAGE>

                  If the Company fails to exercise its Right of First Refusal
                  within 30 days after the date when it received the Transfer
                  Notice, the Purchaser may, not later than 60 days following
                  receipt of the Transfer Notice by the Company, conclude a
                  transfer of the Shares subject to the Transfer Notice on the
                  terms and conditions described in the Transfer Notice. Any
                  proposed transfer on terms and conditions different from those
                  described in the Transfer Notice, as well as any subsequent
                  proposed transfer by the Purchaser, shall again be subject to
                  the Right of First Refusal and shall require compliance with
                  the procedure described in the paragraph above. If the Company
                  exercises its Right of First Refusal, the Purchaser and the
                  Company (or its assignees) shall consummate the sale of the
                  Shares on the terms set forth in the Transfer Notice;
                  provided, however, that the purchase price for such shares
                  shall be the lesser of the price described in such Transfer
                  Notice or Fair Market Value and, provided further, however, if
                  at the time of the exercise of such Right of First Refusal
                  there shall exist any Company Payment Condition, the Company
                  may defer the payment for the purchase until such time as the
                  Company Payment Condition no longer exists.

                  The Company's Right of First Refusal shall inure to the
                  benefit of its successors and assigns and shall be binding
                  upon any transferee of the Shares. The Company's rights under
                  this Subsection shall be freely assignable, in whole or in
                  part.

                  (b) Unvested Shares. Prior to a termination of Service, the
                  Purchaser may not transfer Unvested Shares, other than
                  pursuant to a Permitted Transfer.

            5.3   Termination of Service.

                  (a) Prior to a Major Event. (i) Termination for Other than a
                  Permitted Reason. Following the Purchaser's termination of
                  Service for other than a Permitted Reason, as defined in
                  Section 5.3(b) below, the Company shall have the right, but
                  not the obligation, to purchase all or any portion of the
                  vested Shares of the Purchaser at any time within 12 months
                  following such termination of Service. Such purchase will be
                  at the Fair Market Value of such Shares at the time of the
                  exercise of such right. To exercise such right, Company shall
                  give the Purchaser written notice of the sale in the same
                  manner and with the same effect as a Compelled Sale, pursuant
                  to Section 5.4; provided, however, if at the time of the
                  exercise of such right there shall exist any Company Payment
                  Condition, the Company may defer the payment for the purchase
                  until such time as the Company Payment Condition no longer
                  exists. After any such termination of Service, all unvested
                  Shares of the Purchaser shall be forfeited by the Purchaser
                  and shall be cancelled without payment of any kind.

                                       4
<PAGE>

                  (ii) Termination of Service for A Permitted Reason. (A)
                  Following a termination of Service (I) by the Company for any
                  reason other than "cause," (II) by the Purchaser by
                  resignation with "good reason," (III) death or
                  (IV)"disability," each as defined in the Purchaser's
                  employment contract, or, if the Purchaser does not have such a
                  contract, as defined on Annex 2 to this Agreement (a
                  "Permitted Reason"), the Company shall have the right to
                  purchase all or any portion of the vested Shares of the
                  Purchaser at any time within 12 months following such
                  termination of Service. If such Company purchase would occur
                  before (a) the Purchaser has held the Shares six months or (b)
                  the date which is six months following the vesting of the
                  Shares to be purchased, the repurchase shall occur six months
                  and one day after the later of the purchase of the Shares by
                  the Purchaser or vesting, as the case may be, and for the then
                  current Fair Market Value. Such purchase will be at the Fair
                  Market Value of such Shares at the time of the exercise of
                  such right. To exercise such right, Company shall give the
                  Purchaser written notice of the sale in the same manner and
                  with the same effect as a Compelled Sale, pursuant to Section
                  5.4; provided, however, if at the time of the exercise of such
                  right there shall exist any Company Payment Condition, the
                  Company may defer the payment for the purchase until such time
                  as the Company Payment Condition no longer exists. The Company
                  will purchase all unvested Shares of such Purchaser within 60
                  days of the Purchaser's such termination of Service; provided,
                  however, if at the time of the exercise of such right there
                  shall exist any Company Payment Condition, the Company may
                  defer the payment for the purchase until such time as the
                  Company Payment Condition no longer exists.

                  (B) Following any such termination of Service for a Permitted
                  Reason, such Purchaser shall have the right to compel the
                  purchase (a "Vested Put") of that number of vested Shares of
                  Purchaser, at the Fair Market Value at the time of exercise of
                  such right, necessary to make the aggregate consideration, for
                  all unvested Shares purchased pursuant to Subsection
                  5.3(a)(ii)(A) and the vested Shares to be purchased pursuant
                  the Vested Put, would be equal to the total consideration
                  initially paid by such Purchaser for such vested and unvested
                  Shares; provided however, that if the purchase of all such
                  vested and unvested Shares at the prices specified results in
                  aggregate consideration which is less than such total
                  consideration, all vested Shares shall be purchased pursuant
                  to the Vested Put at Fair Market Value. If such Company
                  purchase would occur before (a) the Purchaser has held the
                  Shares six months or (b) the date which is six months
                  following the vesting of the Shares to be purchased, the
                  repurchase shall occur six months and one day after the later
                  of the purchase of the Shares by the Purchaser or vesting, as
                  the case may be, and for the then current Fair Market Value.
                  Such right shall be exercised within twelve (12) months
                  following such termination of Service and the purchase by the
                  Company shall take place within 60 days of such exercise;

                                       5
<PAGE>

                  provided, however, if at the time of the exercise of such
                  right there shall exist any Company Payment Condition, the
                  Company may defer the payment for the purchase until such time
                  as the Company Payment Condition no longer exists.

                  (iii) Company's Rights Assignable. The Company's rights under
                  this Section shall be freely assignable, in whole or in part,
                  and, following such assignment, such rights will not be
                  limited by any Company Payment Condition.

                  (b) After a Major Event. The Company shall not have any
                  obligation to purchase vested Shares following the Purchaser's
                  termination of Service for any reason after the occurrence of
                  a Major Event.

            5.4   Right to Compel Sale.

                  (a) Compelled Sale. If members of the Saratoga Group propose a
                  Change of Control Transaction, then Saratoga shall have the
                  right (whether the Change of Control results from the sale of
                  all, or some lesser portion, of the Saratoga Group's Shares)
                  to require the Purchaser (or his Permitted Transferee) to sell
                  all, or a Pro Rata Portion, of his Shares to the prospective
                  purchaser of the Saratoga Shares (if such right is exercised,
                  a "Compelled Sale"). If the prospective purchaser in the
                  Change of Control Transaction proposed by the Saratoga Group
                  is to acquire Shares of the Saratoga Group, but Saratoga does
                  not elect to cause a Compelled Sale pursuant to the foregoing
                  sentence, the Purchaser (or such Permitted Transferee) shall
                  have the right to elect to sell to the prospective purchaser,
                  as part of the Change of Control Transaction, the Pro Rata
                  Portion of the Purchaser's (or such Permitted Transferee's)
                  Shares (if such right is exercised, a "Co-Sale"). The
                  consideration to be received by the Purchaser (or such
                  Permitted Transferee) for each Share in the Compelled Sale or
                  Co-Sale shall be the same consideration per Share to be
                  received by the Saratoga Group, and the terms and conditions
                  of such sale by the Purchaser (or such Permitted Transferee)
                  shall be the same as those upon which the Saratoga Group sell
                  their Shares, except that the Purchaser (or such other party)
                  shall not be bound by the terms of any indemnity, hold-back or
                  escrow given to the purchaser in connection with such sale to
                  the extent that such indemnity is not limited in value with
                  respect to the Purchaser (or such Permitted Transferee) to at
                  most the aggregate consideration to be received for his Shares
                  in such sale.

                  (b) Notice and Sale Procedures. (i) The Company shall provide
                  written notice to the Purchaser (or his Permitted Transferee)
                  of any proposed Change of Control Transaction, which notice (a
                  "Control Transaction Notice") shall (A) set forth the
                  consideration per Share to be paid by the prospective
                  purchaser and (B) state whether Saratoga is electing pursuant

                                       6
<PAGE>

                  to Section 5.4(a) to cause a Compelled Sale. If Saratoga does
                  not elect to cause a Compelled Sale and the Purchaser (or such
                  Permitted Transferee) desires to cause a Co-Sale pursuant to
                  Section 5.4(a), the Purchaser (or such Permitted Transferee)
                  must give written notice of his election to cause such Co-Sale
                  (a "Co-Sale Notice") to Saratoga (or the representative of
                  Saratoga as may be designated in the Control Transaction
                  Notice) within ten (10) days following the date of the Control
                  Transaction Notice. Within ten (10) days following the date of
                  the Control Transaction Notice in which Saratoga has elected
                  to cause a Compelled Sale, the Purchaser (or Permitted
                  Transferee) shall deliver to Saratoga (or such designated
                  representative), or in the case of a Co-Sale, the Co-Sale
                  Notice shall be accompanied by, the certificates representing
                  the Shares held by the Purchaser (or Permitted Transferee) to
                  be sold in such Compelled Sale or Co-Sale, together with a
                  suitably executed blank stock power and all other documents
                  required to be executed in connection with such Change of
                  Control Transaction. In the event that the Purchaser (or
                  Permitted Transferee) should fail to deliver such certificates
                  and other documents as aforesaid, the Company shall cause the
                  books and records of the Company to show that such Shares are
                  bound by the provisions of this Section 5.4 and that such
                  Shares shall be transferred only to the purchaser identified
                  in the Change of Control Notice upon surrender for transfer by
                  the Purchaser (or any other party) thereof.

                  (b) If, within one hundred twenty (120) days after the
                  Saratoga Group gives the notice they have not completed the
                  sale of Shares described in the notice, the Saratoga Group
                  shall return to the Purchaser (or such Permitted Transferee)
                  all certificates representing Shares that the Purchaser (or
                  such Permitted Transferee) delivered for sale pursuant hereto,
                  together with any such other documents delivered by the
                  Purchaser.

                  (c) Promptly after the consummation of the sale of the Shares
                  of the Saratoga Group and Purchaser (or Permitted Transferee)
                  pursuant to this Section, the Saratoga Group shall remit to
                  the Purchaser (or Permitted Transferee) the total sales price
                  of the Shares of the Purchaser (or Permitted Transferee) sold
                  pursuant thereto, and shall furnish such other evidence of the
                  completion and time of completion of such sale or other
                  disposition and the terms thereof as may be reasonably
                  requested by the Purchaser (or Permitted Transferee).

      6.    PURCHASER'S RIGHTS UPON REPURCHASE.

      At such time as the Company makes available, the consideration for the
Stock to be repurchased in accordance with the provisions of Sections 2 and 5 of
this Agreement, then from and after such time the person from whom such shares
are to be repurchased shall no longer have any rights as a holder of such shares
(other than the right to receive payment of such

                                       7
<PAGE>

consideration in accordance with this Agreement). Such shares shall be deemed to
have been repurchased in accordance with the applicable provisions hereof,
whether or not the certificate(s) therefor have been delivered as required by
this Agreement.

      7.    TRANSFER BY PURCHASER TO CERTAIN TRUSTS.

      Purchaser shall have the right to transfer all or any portion of
Purchaser's interest in the shares issued under this Agreement which have been
delivered to Purchaser under the provisions of Section 3 of this Agreement, to a
trust established by Purchaser for the benefit of Purchaser, Purchaser's spouse
or Purchaser's children, without being subject to the provisions of Section 5
hereof, provided that the trustee on behalf of the trust shall agree in writing
to be bound by the terms and conditions of this Agreement. The transferee shall
execute a copy of Exhibit E attached hereto and file the same with the Secretary
of the Company.

      8.    LEGEND ON SHARES.

      All certificates representing the Stock purchased under this Agreement
shall, where applicable, have endorsed thereon the legends set forth in the
Award and any other legends required by applicable securities laws.

      9.    PURCHASER'S INVESTMENT REPRESENTATIONS.

      This Agreement is made with Purchaser in reliance upon Purchaser's
representation to the Company, which by Purchaser's acceptance hereof Purchaser
confirms, that the Stock which Purchaser will receive will be acquired with
Purchaser's own funds for investment for an indefinite period for Purchaser's
own account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and that Purchaser has no present intention of
selling, granting participation in, or otherwise distributing the same, but
subject, nevertheless, to any requirement of law that the disposition of
Purchaser's property shall at all times be within Purchaser's control. By
executing this Agreement, Purchaser further represents that Purchaser does not
have any contract, understanding or agreement with any person to sell, transfer,
or grant participation, to such person or to any third person, with respect to
any of the Stock.

      Purchaser understands that the Stock will not be registered or qualified
under federal or state securities laws on the ground that the sale provided for
in this Agreement is exempt from registration or qualification under federal or
state securities laws and that the Company's reliance on such exemption is
predicated on Purchaser's representations set forth herein.

      Purchaser agrees that in no event will Purchaser make a disposition of any
of the Stock (including a disposition under Section 7 of this Agreement), unless
and until (i) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition and (ii) Purchaser shall have
furnished the Company with an opinion of counsel satisfactory to the Company to
the effect that (A) such disposition will not require registration or
qualification of such Stock under federal or state securities laws or (B)
appropriate action necessary for compliance with the

                                       8
<PAGE>

federal or state securities laws has been taken or (iii) the Company shall have
waived, expressly and in writing, its rights under clauses (i) and (ii) of this
section.

      With respect to a transaction occurring prior to such date as the Plan and
Stock thereunder are covered by a valid Form S-8 or similar federal registration
statement, this subsection shall apply unless the transaction is covered by Rule
701 under the Securities Act of 1933, as amended (the "Securities Act") or
another exemption. In connection with the investment representations made
herein, Purchaser represents that Purchaser is able to fend for himself or
herself in the transactions contemplated by this Agreement, has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of Purchaser's investment, has the ability to bear the
economic risks of Purchaser's investment and has been furnished with and has had
access to such information as would be made available in the form of a
registration statement together with such additional information as is necessary
to verify the accuracy of the information supplied and to have all questions
answered by the Company.

      Purchaser understands that if a registration statement covering the Stock
(or a filing pursuant to the exemption from registration under Regulation A of
the Securities Act) under the Securities Act is not in effect when Purchaser
desires to sell the Stock, Purchaser may be required to hold the Stock for an
indeterminate period. Purchaser also acknowledges that Purchaser understands
that any sale of the Stock which might be made by Purchaser in reliance upon
Rule 144 under the Securities Act may be made only in limited amounts in
accordance with the terms and conditions of that Rule.

      10.   NO DUTY TO TRANSFER IN VIOLATION HEREUNDER.

      The Company shall not be required (a) to transfer on its books any shares
of Stock of the Company which shall have been sold or transferred in violation
of any of the provisions set forth in this Agreement or (b) to treat as owner of
such shares or to accord the right to vote as such owner or to pay dividends to
any transferee to whom such shares shall have been so transferred.

      11.   RIGHTS OF PURCHASER.

      Except as otherwise provided herein, Purchaser shall, during the term of
this Agreement, exercise all rights and privileges of a stockholder of the
Company with respect to the Stock.

      12.   SECTION 83(b) ELECTIONS.

      Purchaser hereby acknowledges that he or she has been informed that unless
an election is filed by the Purchaser with the Internal Revenue Service and, if
necessary, the proper state taxing authorities, within 30 days of the purchase
of the Shares (and attached to Purchaser's individual income tax return for that
year), electing pursuant to Section 83(b) of the Internal Revenue Code of 1986,
as amended (the "Code") to be taxed currently on any difference between the
purchase price of the Shares and their fair market value on the date of
purchase, there will be a recognition of taxable income to the Purchaser,
measured by the excess, if any, of the fair market value of the Shares, at the
time the Company's Unvested Stock Requirement

                                       9
<PAGE>

lapses over the purchase price for the Shares. Purchaser represents that
Purchaser has consulted any tax consultant(s) that Purchaser deems advisable in
connection with the purchase of the Shares or the filing of the Election under
Section 83(b). A form of Election under Section 83(b) is attached hereto as
Exhibit B for reference.

PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE
COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON HIS OR HER
BEHALF.

      13.   OTHER NECESSARY ACTIONS.

      The parties agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.

      14.   NOTICE.

      Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon the earliest of personal delivery,
receipt or the third full day following deposit in the United States Post Office
with postage and fees prepaid, addressed to the other party hereto at the
address last known or at such other address as such party may designate by 10
days' advance written notice to the other party hereto.

      15.   SUCCESSORS AND ASSIGNS.

      This Agreement shall inure to the benefit of the successors and assigns of
the Company and, subject to the restrictions on transfer herein set forth, be
binding upon Purchaser and Purchaser's heirs, executors, administrators,
successors and assigns. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of a like or different nature.

      16.   APPLICABLE LAW.

      This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Ohio, as such laws are applied to contracts entered into
and performed in such state.

      17.   NO FEDERAL OR OTHER STATE REGISTRATION.

      THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAW OF ANY
STATE AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART
OF THE CONSIDERATION THEREFOR PRIOR TO SUCH REGISTRATION OR QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM SUCH REGISTRATION OR
QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS

                                       10
<PAGE>

AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH REGISTRATION OR QUALIFICATION
BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

      18.   NO ORAL MODIFICATION.

      No modification of this Agreement shall be valid unless made in writing
and signed by the parties hereto.

      19.   TERMINATION.

      This Agreement shall terminate and be of no further force and effect if
the Closing Date has not occurred on or before the 30th day following the Grant
Date, unless the failure is due to a default by the Company or the designation
by the Board of Directors of the Company, in writing, of a later date as the
Closing Date.

      20.   ENTIRE AGREEMENT.

      This Agreement and the Award constitute the entire complete and final
agreement between the parties hereto with regard to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

ADVANCED LIGHTING                                    PURCHASER
  TECHNOLOGIES, INC.

By:         /s/ Wayne J. Vespoli                        /s/ Wayne R. Hellman
     ------------------------------------            ---------------------------
Title:               EVP                                  Wayne R. Hellman

                                       11
<PAGE>

                                                                         ANNEX 1

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE
OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
                           2005 EQUITY INCENTIVE PLAN

                                      AWARD

      ADVANCED LIGHTING TECHNOLOGIES, INC. (the "Company"), hereby grants this
Award to purchase, within 30 days of the Grant Date specified below, shares of
its common stock ("Shares") to the Participant named below. The terms and
conditions of the Award are set forth in this cover sheet, the Stock Purchase
Agreement to be entered into between the Company and the Participant including
the attachments (the "Purchase Agreement") and in the Company's 2005 Equity
Incentive Plan (the "Plan").

Grant Date:  July 27, 2005

Name of Participant:  Wayne R. Hellman

Participant's Social Security Number:
                                      _________________________________________

Number of Shares Covered by Award:  22.136

Purchase Price Per Share:  $1,000.00

                           Company:
                                          ______________________________________
                                          (Signature)

                           Title:
                                          ______________________________________

                                       12
<PAGE>

                                                                         ANNEX 2

                               CERTAIN DEFINITIONS

         (FOR USE FOR GRANTS TO EMPLOYEES WITHOUT EMPLOYMENT AGREMENTS)

      For purposes hereof, the term "cause" shall mean:

            Employee's committing an act constituting a misdemeanor involving
            fraud, dishonesty, or theft or a felony;

            Employee's engaging in habitual or repeated alcohol or drug abuse;

            Employee's disregarding the instructions of the Board of Directors
            of ADLT;

            Employee's neglecting duties (other than by reason of disability or
            death), with five (5) business days notice to cure;

            Employee shall fail to devote his full business time to his
            employment and perform diligently such duties as are, or may be,
            required by the Board of Directors of ADLT or their designee
            consistent with Employee's duties and authority at the date of this
            Agreement or such other duties as may be mutually agreed, with five
            (5) business days notice to cure; provided such duties are within
            the bounds of reasonableness and acceptable business standards;

            Employee shall, without the prior written consent of ADLT, which
            shall not be unreasonably withheld, directly or indirectly, render
            services of a business, professional or commercial nature to any
            other person or firm, whether for compensation or otherwise, other
            than in the performance of duties naturally inherent in the
            businesses of ADLT or any subsidiary or affiliate of ADLT, with five
            (5) business days notice to cure; provided, however, Employee may
            continue to render services to and participate in philanthropic and
            charitable causes, in each case, in a manner and to the extent
            consistent with his past practice;

            Employee shall fail to comply with all policies and procedures of
            ADLT, including but not limited to, all terms and conditions set
            forth in any employee handbook and any other memoranda pertaining to
            ADLT's policies, procedures, rules and regulations, with five (5)
            business days notice to cure; or

            Employee's willful misconduct or gross negligence.

                                       13
<PAGE>

                                                                         ANNEX 2
                                                                          PAGE 2

For purposes hereof, the term "good reason" shall mean: without Employee's
written consent, a material reduction of Employee's duties, authority,
compensation, benefits or responsibilities.

For purposes hereof, the term "disability" shall mean: the inability of Employee
to perform satisfactorily his usual or customary occupation for a period of 120
days in the aggregate out of 150 consecutive days as a result of a physical or
mental illness or other disability which in the written opinion of a physician
of recognized ability and reputation, is likely to continue for a significant
period of time.

                                       14
<PAGE>

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
                           2005 EQUITY INCENTIVE PLAN

                                      AWARD

VESTING           Your shares will vest, and no longer be subject to the
                  Unvested Stock Agreement pursuant to the Purchase Agreement,
                  as follows:

                  25% of the Shares covered by the Award will vest and no longer
                  be subject to the Unvested Stock Requirement provided that the
                  Company achieves Cumulative Adjusted EBITDA for any 4
                  consecutive fiscal quarters, ending on or before June 30,
                  2007, equal to or greater than $32,977,000; 25% of the Shares
                  covered by the Award will vest and no longer be subject to the
                  Unvested Stock Requirement provided that the Company achieves
                  Cumulative Adjusted EBITDA for any 8 consecutive fiscal
                  quarters, ending on or before June 30, 2008, equal to or
                  greater than $71,075,000; 25% of the Shares covered by the
                  Award will vest and no longer be subject to the Unvested Stock
                  Requirement provided that the Company achieves Cumulative
                  Adjusted EBITDA for any 12 consecutive fiscal quarters, ending
                  on or before June 30, 2009, equal to or greater than
                  $113,140,000; and 25% of the Shares covered by the Award will
                  vest and no longer be subject to the Unvested Stock
                  Requirement provided that the Company achieves Cumulative
                  Adjusted EBITDA for any 16 consecutive fiscal quarters, ending
                  on or before June 30, 2010, equal to or greater than
                  $159,147,000; provided, however, if the Company enters into a
                  significant corporate transaction (such as an acquisition,
                  divestiture or merger) which could reasonably be expected to
                  affect Cumulative Adjusted EBITDA, the amount of Cumulative
                  Adjusted EBITDA required for vesting on any date shall be
                  adjusted, by the Board of Directors of the Company, to reflect
                  the EBITDA expected to be added or lost as a result of such
                  transaction.

                  Notwithstanding the foregoing, in the event of a Change in
                  Control or an Initial Public Offering (each as defined in the
                  Plan) of the Company, your unexpired shares will immediately
                  vest, provided the aggregate cash amounts received by Saratoga
                  in respect of its Company stock and from such transaction
                  prior to June 30, 2009 are not less than $90,000,000. If a
                  Change of Control or Initial Public Offering occurs in a
                  transaction which does not result in aggregate cash amounts of
                  at least $90,000,000 being received by Saratoga on or prior to
                  the closing of such transaction, and Saratoga receives or
                  retains securities of the Company or its

                                       15
<PAGE>

                  successors or assigns at or after the closing of such
                  transaction, Saratoga shall provide an escrow of a portion of
                  such securities or other arrangement to assure the
                  participants of the economic benefits of vesting if the
                  aggregate cash amounts received in respect of its Company
                  stock, in such transaction and on liquidation of the
                  securities received or retained by Saratoga results in
                  aggregate amounts received by Saratoga of at least $90,000,000
                  by June 30, 2009.

                  No additional Shares will vest after your employment with the
                  Company or any Affiliate of the Company (including any
                  approved leaves of absence) ("Service") has terminated for any
                  reason.

VOTING CONTROL    Prior to the occurrence of a Major Event (as defined in the
                  Plan), the Shares purchased shall be transferred into a voting
                  trust or similar arrangement ("Voting Trust").  Pursuant to
                  the terms of the Voting Trust, the Participant shall be the
                  beneficiary but Saratoga Lighting Holdings LLC shall vote all
                  shares in the Voting Trust until the occurrence of a Major
                  Event, at which time the Voting Trust shall terminate.

RETENTION RIGHTS  YOU ACKNOWLEDGE AND AGREE THAT THE VESTING OF SHARES PURSUANT
                  TO THIS AWARD IS EARNED ONLY BY CONTINUING CONSULTANCY OR
                  EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF
                  BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES
                  HEREUNDER). YOU FURTHER ACKNOWLEDGE AND AGREE THAT NOTHING IN
                  THIS AWARD, NOR IN THE PLAN SHALL CONFER UPON YOU ANY RIGHT
                  WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY
                  THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH YOUR RIGHT
                  OR THE COMPANY'S RIGHT TO TERMINATE YOUR EMPLOYMENT OR
                  CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

LEGENDS           All certificates representing the Shares issued pursuant to
                  this Award and Purchase Agreement shall, where applicable,
                  have endorsed thereon the following legends:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  CERTAIN RESTRICTIONS ON TRANSFER AND REPURCHASE REQUIREMENTS
                  AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
                  REGISTERED HOLDER, OR SUCH HOLDER'S

                                       16
<PAGE>

                  PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN
                  TRANSFER RESTRICTIONS AND CERTAIN REPURCHASE REQUIREMENTS ON
                  THE COMPANY (OR ITS ASSIGNS) UPON THE SALE OF THE SHARES OR
                  UPON TERMINATION OF SERVICE WITH THE COMPANY. A COPY OF SUCH
                  AGREEMENTS IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY
                  AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF
                  THE COMPANY BY THE HOLDER OF SHARES REPRESENTED BY THIS
                  CERTIFICATE.

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE SECURITIES
                  LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF
                  REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
                  OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS
                  PROVIDED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY
                  AND ITS COUNSEL, THAT REGISTRATION AND QUALIFICATION UNDER
                  FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED."

THE PLAN AND
OTHER AGREEMENTS  The text of the Plan is incorporated in this Award by
                  reference.

                  Certain capitalized terms used in this Agreement are defined
                  in the Plan.

                  THIS AWARD, THE PURCHASE AGREEMENT INCLUDING ITS ATTACHMENTS,
                  AND THE PLAN CONSTITUTE THE ENTIRE UNDERSTANDING BETWEEN YOU
                  AND THE COMPANY REGARDING THE SHARES WHICH ARE SUBJECT TO THIS
                  AWARD. ANY PRIOR AGREEMENTS, COMMITMENTS OR NEGOTIATIONS
                  CONCERNING SUCH SHARES ARE SUPERSEDED.

CERTAIN
DEFINITIONS       For the purposes of this Award, "Adjusted EBITDA" shall mean
                  "Income from Operations" (a) plus "Amortization of Intangible
                  Assets" plus "Depreciation", (b) plus "Income from
                  Investments", or minus "Loss from Investments" to the extent
                  such Income or Loss from Investments relates to the Company's
                  investment in AAPL, all of the above as reported in the
                  Company's financial statements, (c) plus the amount recorded
                  in the Company's financial statements for the following items:
                  (i)  Amounts payable to the Saratoga Group pursuant to the
                  Management Services Agreement ("Management Services
                  Agreement") between Saratoga Management Company LLC and the
                  Company, (ii)

                                       17
<PAGE>

                  amounts recorded as expense related to "Additonal Bonuses"
                  described in Wayne Hellman's employment contract, the
                  after-tax proceeds of which are applied to repayment of Wayne
                  Hellman's loan from the Company, and (iii) amounts in respect
                  of fees and expenses, prior to an Initial Public Offering, in
                  connection with the services of any non-management Director,
                  and (d) plus any one-time expense item, or minus any one time
                  income item, as explicitly designated by the Board of
                  Directors.

                  For the purposes of this Award, "Cumulative Adjusted EBITDA"
                  shall mean Adjusted EBITDA over the relevant number of
                  consecutive quarters, accrued on a cumulative basis (taken as
                  one accounting period).

                                       18
<PAGE>

                                    EXHIBIT A

                                   TAX SUMMARY

      Set forth below is a brief summary as of the date of the right of some of
the federal tax consequences of purchase and disposition of the Shares.

      THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. PARTICIPANTS SHOULD CONSULT A TAX ADVISER BEFORE
PURCHASING OR DISPOSING OF THE SHARES.

      PURCHASE OF SHARES PRIOR TO VESTING BY CERTAIN PARTICIPANTS

      The Stock Purchase Agreement gives Participants the right to purchase
certain shares which are subject to repurchase by the Company at cost prior to
"vesting." In these situations, an election may be filed by the Participant with
the Internal Revenue Service within 30 days of the purchase of the Shares,
electing pursuant to Section 83(b) of the Code to be taxed currently on the
bargain purchase element on the date of purchase for alternative minimum tax
purposes. EVEN WHERE THERE IS NO BARGAIN ELEMENT FAILURE TO FILE THE 83(b)
ELECTION WILL RESULT IN ALTERNATIVE MINIMUM TAXABLE INCOME MEASURED AND
RECOGNIZED BY PARTICIPANT AT THE TIME OR TIMES ON WHICH THE COMPANY'S REPURCHASE
REQUIREMENT LAPSES. Participant is strongly encouraged to seek the advice of his
or her tax consultants in connection with the purchase of the Shares and the
advisability of filing of the election under Section 83(b) and similar tax
provisions. A form of Election under Section 83(b) is attached to the Stock
Purchase Agreement as Exhibit B for reference.

      THE TAX CONSEQUENCES OF THE PURCHASE AND SALE OF COMMON SHARES AND THE
TERMINATION OF COMPANY REPURCHASE RIGHTS FOR UNVESTED SHARES, MAY DIFFER
DEPENDING UPON THE CIRCUMSTANCES OF EACH PARTICIPANT, THE TERMS OF THE AWARD AND
THE TIMING OF ANY EXERCISE OR SALE. PARTICIPANTS ARE ADVISED TO SEEK INDEPENDENT
TAX ADVICE TO MAKE SURE THEY UNDERSTAND THE INCOME TAX CONSEQUENCES OF ANY
AWARD.

                                       19
<PAGE>

                                    EXHIBIT B

                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986

      The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer's receipt of the property described below:

1.    The name, address, taxpayer identification number and taxable year of the
      undersigned are as follows:

NAME: TAXPAYER: ____________________________ SPOUSE: ___________________________

ADDRESS: _______________________________________________________________________

IDENTIFICATION NO.: TAXPAYER: ___________________ SPOUSE: ______________________

TAXABLE YEAR: ________________

2.    The property with respect to which the election is made is described as
      follows: _____ shares (the "Shares") of the Common Stock of Advanced
      Lighting Technologies, Inc. (the "Company").

3.    The date on which the property was transferred is:______, 20___.

4.    The property is subject to the following restrictions:

      The Shares may not be transferred and are subject to forfeiture under the
      terms of an agreement between the taxpayer and the Company. These
      restrictions lapse upon the satisfaction of certain conditions contained
      in such agreement.

5.    The fair market value at the time of transfer, determined without regard
      to any restriction other than a restriction which by its terms will never
      lapse, of such property is: $______.

6.    The amount (if any) paid for such property is: $________________________.

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

                                       20
<PAGE>

The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.

Dated: _______________________, 20___           ________________________________
                                                Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated: _______________________, 20___           ________________________________
                                                Spouse of Taxpayer

                                       21
<PAGE>

                                    EXHIBIT C

                            JOINT ESCROW INSTRUCTIONS

                                 August 1, 2005

Secretary
ADVANCED LIGHTING TECHNOLOGIES, INC.

Dear Sir or Madam:

      As Escrow Agent for both ADVANCED LIGHTING TECHNOLOGIES, INC. (the
"Company"), and Wayne R. Hellman ("Purchaser"), you are hereby authorized and
directed to hold the documents and Common Stock certificates delivered to you
pursuant to the terms of that certain Common Stock Purchase Agreement (the
"Agreement") of even date herewith, to which a copy of these Joint Escrow
Instructions is attached as Exhibit C to the Agreement, in accordance with the
following instructions:

1. In the event the Company is required to purchase Shares pursuant to the
Unvested Stock Requirement set forth in the Agreement, the Company shall give to
Purchaser and you a written notice as provided in the Agreement. Purchaser and
the Company hereby irrevocably authorize and direct you to close the transaction
contemplated by such notice, including prompt delivery of stock certificates.

2. At the closing, you are directed (a) to date the stock assignment form or
forms necessary for the transfer in question, (b) to fill in the number of
shares being transferred, and (c) to deliver same, together with the certificate
or certificates evidencing the shares to be transferred, to the Company against
the simultaneous delivery to you of the purchase price (by certified or bank
cashier's check) for the number of shares being purchased pursuant to the
Unvested Stock Requirement.

3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares to be held by you hereunder and any additions and
substitutions to said shares as defined in the Agreement. Purchaser does hereby
irrevocably constitute and appoint you as Purchaser's attorney-in-fact and agent
for the term of this escrow to execute with respect to such securities all
documents necessary or appropriate to make such securities negotiable and to
complete any transaction herein contemplated. Subject to the provisions of this
Paragraph 3, Purchaser shall exercise all rights and privileges, including but
not limited to, the right to vote and to receive dividends (if any), of a
stockholder of the Company while the shares are held by you.

4. In accordance with the terms of Section 5 of the Agreement, you may from time
to time deliver to Purchaser a certificate or certificates representing so many
shares as are no longer subject to the Unvested Stock Requirement.

                                       22
<PAGE>

5. This escrow shall terminate upon the release of all shares held under the
terms and provisions hereof.

6. If at the time of termination of this escrow you should have in your
possession any documents, securities or other property belonging to Purchaser,
you shall deliver all of same to Purchaser and shall be discharged from all
further obligations hereunder.

7. Your duties hereunder may be altered, amended, modified or revoked only by a
writing signed by all of the parties hereto.

8. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact of Purchaser while acting in good faith and
in the exercise of your own good judgment, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.

9. You are hereby expressly authorized to disregard any and all warnings given
by any of the parties hereto or by any other person or corporation, excepting
only orders or process of courts of law, and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you obey
or comply with any such order, judgment or decree of any court, you shall not be
liable to any of the parties hereto or to any other person, firm or corporation
by reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.

10. You shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.

11. You shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.

12. You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations
hereunder and may rely upon the advice of such counsel.

13. Your responsibilities as Escrow Agent hereunder shall terminate if you shall
cease to be Secretary of the Company or if you shall resign by written notice of
each party. In the event of any such termination, the Company shall appoint any
officer of the Company as successor Escrow Agent.

                                       23
<PAGE>

14. If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

15. It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the securities held by
you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

16. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled.

17. By signing these Joint Escrow Instructions, you become a party hereto only
for the purpose of said Joint Escrow Instructions; you do not become a party to
the Agreement.

18. This instrument shall be governed by and construed in accordance with the
laws of the State of Ohio.

      This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

                                 Very truly yours,

                                 ADVANCED LIGHTING TECHNOLOGIES, INC.

                                 By: ___________________________________________

ESCROW AGENT:                                 PURCHASER:

_________________________________             __________________________________

                                       24
<PAGE>

                                    EXHIBIT D

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
      unto ________________ Twenty-Two and One Hundred Thirty-Six
      One-Thousandths (22.136) shares of the Common Stock of ADVANCED LIGHTING
      TECHNOLOGIES, INC. (the "Company"), standing in
      _____________________________ name on the books of the Company represented
      by Certificate No.________ herewith and hereby irrevocably constitutes and
      appoints _____________________________ Attorney to transfer said stock on
      the books of the Company with full power of substitution in the premises.

Dated: ___________________________, 20___

                                                 _______________________________
                                                      Wayne R. Hellman

                                       25
<PAGE>

                                    EXHIBIT E

                   ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND
                    BY THE COMMON STOCK PURCHASE AGREEMENT OF
                      ADVANCED LIGHTING TECHNOLOGIES, INC.

      The undersigned, as transferee of shares of ADVANCED LIGHTING
TECHNOLOGIES, INC., hereby acknowledges that he or she has read and reviewed the
terms of the Common Stock Purchase Agreement of ADVANCED LIGHTING TECHNOLOGIES,
INC. and hereby agrees to be bound by the terms and conditions thereof, as if
the undersigned had executed said Agreement as an original party thereto.

Dated: ________________________, 20___

By: ________________________________________

                                       26

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]