Exhibit A
RESTRICTED SHARE PURCHASE AGREEMENT
AGREEMENT, made as of the 31st day of December, 2002, by and between
Ford Motor Company, a Delaware corporation ("Seller"), each of the private
investment vehicles whose name, address and form and state or jurisdiction of
organization are set forth on Exhibit A-1 hereto (collectively the "Private
Investment Funds") and each of the publicly-held entities registered as
investment companies under the Investment Company Act of 1940 whose name,
address and form and state of organization are set forth on Exhibit A-2 hereto
(collectively the "Mutual Funds"). The Private Investment Funds and the Mutual
Funds are hereinafter collectively called the "Purchasers" and individually
called a "Purchaser".
R E C I T A L S:
- - - - - - - -
A. Seller is the holder of record and beneficial owner of 927,301 shares of
the Common Stock, par value $.01 per share ("Common Stock") of Ceradyne, Inc., a
Delaware company (the "Company") (such shares of Common Stock being hereinafter
called the "Purchased Shares");
B. The Purchased Shares are "restricted securities" as defined in paragraph
(a)(3)(i) of Rule 144 ("Restricted Securities") under the Securities Act of 1933
(the "Act"), having been acquired by Seller from the Company without
registration under the Act in a transaction not involving any public offering;
and
C. Seller wishes to sell and transfer the Purchased Shares to the
Purchasers, and the Purchasers wish to purchase and acquire the Purchased Shares
from Seller, for the price and subject to and upon the terms and conditions set
forth in this Agreement, in an unregistered private transaction which will
result in the Purchased Shares continuing to be Restricted Securities in the
hands of the Purchasers for purposes of the Act.
NOW, THEREFORE, the parties hereby agree as follows:
1. Agreement to Sell and Purchase. Subject to and upon the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell the
Purchased Shares to the Purchasers, and the Purchasers hereby agree to purchase
the Purchased Shares from Seller, for a price of $7.00 per share or an aggregate
purchase price of $6,491,107 (the "Purchase Price"). At the Closing provided for
in Paragraph 6 hereof (the "Closing"), each of the Purchasers shall purchase the
number of Purchased Shares and pay the portion of the Purchase Price set forth
opposite such Purchaser's name on Exhibit B hereto. However, upon written notice
given to Seller and American Stock Transfer & Trust Company, the Transfer Agent
for the Company's Common Stock (the "Transfer Agent"), at least three business
days before the date fixed for the Closing, the Purchasers may amend Exhibit B
to reallocate among themselves the number of Purchased Shares to be purchased
and the portion of the Purchase Price to be paid by each Purchaser; provided,
however, that the Purchasers may not allocate additional Purchased Shares to any
Purchaser organized in a jurisdiction outside the United States without Seller's
consent. Any written notice amending Exhibit B shall be signed on behalf of the
Private Investment Funds by Xxxx X. Xxxxxxxxxx or Xxxx X. Xxxxxxxx and on behalf
of the Mutual Funds by Xxxxx X.X. Xxxxx or Xxxxxxx X. Xxxxxxxxx.
2. Representations and Warranties of Seller. Seller represents and warrants
to the Purchasers, as follows:
(a) (i) Seller is the beneficial owner of the Purchased Shares, free and
clear of any liens, encumbrances, rights, claims, equities or
interests in favor of any third party.
(ii) Seller is the holder of record of 680,983 of the Purchased Shares
and holds an assignment separate from certificate duly executed by the
nominee for Seller's Custodian with respect to 246,318 Purchased
Shares held of record for Seller's benefit; and Seller's delivery of
such assignment separate from certificate at the Closing as provided
in Paragraph 6 will be effective to permit transfer of such 246,318
Purchased Shares into name or names of one or more of the Purchasers
on the books of the Company.
(b) Seller has corporate power and authority, and the person signing this
Agreement on its behalf is duly authorized to obligate Seller, to sell
the Purchased Shares to the Purchasers pursuant to this Agreement.
(c) Seller has the unrestricted right to sell the Purchased Shares to the
Purchasers pursuant to this Agreement, subject only to approval by the
Company's Transfer Agent of the provisions hereof and the documents
delivered hereunder relating to compliance with the Act.
(d) Each of the foregoing representations and warranties is true and
complete as of the date of this Agreement and will be true and
complete at the time of the consummation of the purchase and sale of
the Purchased Shares at the Closing provided for in Paragraph 6
hereof.
(e) Neither Seller nor any person authorized to act on its behalf has
employed any broker, finder or placement agent or incurred any
liability for any brokerage, finder's or placement agent's fees or
commissions in connection with the transaction contemplated by this
Agreement.
Seller agrees that it will indemnify, defend, and save harmless each
Purchaser and each of their respective directors, officers, agents, and
employees, and each person that directly or indirectly controls each Purchaser,
from any and all liabilities, claims, demands, suits, and proceedings arising
out of any material misstatements in any of the representations or warranties of
Seller set forth in Paragraph 2 hereof.
3. Representations and Warranties of Each Purchaser. Each Purchaser
represents and warrants to the Seller, as follows:
(a) Such Purchaser has corporate or other power and authority, and the
person signing this Agreement on its behalf is duly authorized to
obligate such Purchaser, to purchase the number of Purchased Shares to
be purchased by it from Seller pursuant to this Agreement.
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(b) Such Purchaser is acquiring the Purchased Shared to be purchased by it
pursuant to this Agreement for investment purposes for its own
account, and not as nominee or agent, and not with a view to the
resale or distribution of all or any of such Purchased Shares or any
interest therein; and such Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell,
transfer or grant a participating interest in any of such Purchased
Shares.
(c) Such Purchaser is an "accredited investor" within the meaning of Rule
501(a) of Regulation D under the Act and is prepared to hold the
Purchased Shares purchased by it pursuant to this Agreement for an
indefinite period of time.
(d) Such Purchaser was formed more than one year ago, and was not formed
for the specific purpose of acquiring Common Stock of the Company. No
person (as defined in the first sentence of Section 2(a)(2) of the
Act) has invested or will invest additional funds or others assets in,
or has incurred or will incur additional obligations to, or change its
status as a security holder of, such Purchaser, for the purpose or as
a result of such Purchaser's acquisition of any of the Purchased
Shares.
(e) The entities and persons making the investment decision to acquire
Purchased Shares on behalf of such Purchaser (the "Investment Decision
Makers") are experienced and qualified investment professionals who
are able to evaluate the merits and risks of investing in Purchased
Shares, and are named on Exhibit A-3, along with their positions
and/or offices with, and whether they are securities holders of, such
Purchaser. Such persons are duly authorized on behalf of such
Purchaser to make the investment decision for such Purchaser. Except
for such Investment Decision Makers, none of the security holders of
such Purchaser has any authority to, or will engage or participate in,
any investment decision regarding the purchase of any of the Purchased
Shares by such Purchaser.
(f) Such Purchaser, including its Investment Decision Makers, have had
access to all periodic reports and other filings made by the Company
with the Securities and Exchange Commission within the past three
years; and have had an opportunity to review such reports and filings,
and to consult with the professional financial advisers, accountants
and counsel for such Purchaser.
(g) Seller has made no representation to such Purchaser regarding the
Company, and specifically has made no representation to such Purchaser
regarding the business, prospects, financial condition, or value of
the Company. Such Purchaser is aware that an investment in the Company
is subject to substantial risk, and that the Purchased Shares being
acquired by such Purchaser may eventually prove to be worth
substantially less or
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more than the amount being paid to Seller. Such Purchaser was not sold
any of the Purchased Shares by means of any general solicitation.
(h) Such Purchaser understands that the Purchased Shares have not been
registered under the Act, and cannot be sold or offered for sale in
the absence of an effective registration statement under the Act,
unless an exemption from registration is available and established.
Such Purchaser understands that a stop transfer order may be placed on
the Purchased Shares by the Transfer Agent.
(i) Each of the foregoing representations and warranties is true and
complete as of the date of this Agreement and will be true and
complete at the time of the consummation of the purchase and sale of
the Purchased Shares at the Closing provided for in Paragraph 6
hereof.
(j) Neither such Purchaser nor any person authorized to act on its behalf
has employed any broker, finder or placement agent or incurred any
liability for any brokerage, finder's or placement agent's fees or
commissions in connection with the transaction contemplated by this
Agreement.
Each Purchaser agrees that it will indemnify, defend, and save harmless the
Seller, each of its directors, officers, agents, and employees, and each person
that directly or indirectly controls the Seller, from any and all liabilities,
claims, demands, suits, and proceedings arising out of any material
misstatements in any of the representations or warranties of such Purchaser set
forth in Paragraph 3 hereof.
4. Additional Representations. Each of the Mutual Fund Purchasers hereby
represents that it comes within the definition of "accredited investor" set
forth in Section 501(a)(1) of Regulation D under the Act. Each of the Private
Investment Fund Purchasers hereby represents that it comes within the definition
of "accredited investors" set forth in Section 501(a)(3) of Regulation D under
the Act. Each of the Purchasers has assets in excess of $5,000,000 as of the
date hereof, except for Xxxxxxx Small-Cap Growth Fund, which has assets in
excess of $3,500,000 as of the date hereof. Seller and each Purchaser organized
in a jurisdiction outside the United States of America hereby acknowledge and
confirm that all negotiations conducted between them or on behalf of either of
them and the other which relate to Seller's sale and such Purchaser's purchase
of Purchased Shares pursuant to this Agreement occurred solely within the United
States of America.
5. Condition to Closing. The consummation of the purchase and sale of the
Purchased Shares provided for in this Agreement shall be subject to approval by
the Transfer Agent of the provisions hereof and the documents delivered
hereunder relating to compliance with the Act. Seller agrees to deliver or cause
to be delivered to the Transfer Agent the documents listed on Exhibit C-1
hereto, each of which is customarily required by the Transfer Agent from a
seller of shares of the Company's Common Stock constituting Restricted
Securities, and each Purchaser agrees to deliver or cause to be delivered to the
Transfer Agent the documents listed on Exhibit C-2 hereto, each of which is
customarily required by the Transfer Agent from a purchaser of the Company's
Common Stock constituting Restricted Securities.
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6. Closing. The Closing shall take place at the office of the Transfer
Agent on a date fixed by the parties hereto, which shall be no less than one
week nor more than two weeks after the Transfer Agent has given each party
written notice to the effect that it has approved the provisions hereof and the
documents delivered hereunder relating to compliance with the Act and is
prepared to deliver to each Purchaser one or more stock certificates
representing the Purchased Shares purchased by such Purchaser, each bearing the
restrictive legend set forth in Paragraph 7. At the Closing, the following
actions shall be taken and be deemed to have occurred simultaneously: (a) Seller
shall deliver to the Transfer Agent the stock certificates currently
representing the Purchased Shares, together with such assignments separate from
certificate as shall be effective to permit the transfer on the books of the
Company into the name of each Purchaser of the number of Purchased Shares
purchased by such Purchaser pursuant to this Agreement, (b) such Purchaser shall
deliver to the Seller a certified or bank cashier's check, or immediately
available funds by wire transfer, for the portion of the Purchase Price payable
by such Purchaser for such Purchased Shares and (c) the Transfer Agent shall
deliver to such Purchaser one or more stock certificates representing such
Purchased Shares, each bearing the restrictive legend set forth in Paragraph 7.
7. Restrictive Legend. The stock certificates currently representing the
Purchased Shares bear the following restrictive legend and such legend shall be
endorsed on each stock certificate delivered to the Purchasers to represent the
Purchased Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER ANY APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS THEREUNDER. THESE
SECURITIES MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT OR PERMIT RELATED THERETO OR UNLESS AN EXEMPTION FROM
REGISTRATION AND/OR QUALIFICATION IS AVAILABLE AND AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER IS PROVIDED TO THE
ISSUER TO THE EFFECT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
NECESSARY UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS."
8. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
transferees by operation of law.
9. Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and communications of the parties, whether
written or oral, in connection herewith. The parties acknowledge that by
execution of this agreement, they do not intend to create rights in or impose
obligations on any person or entity other than themselves, and, except as
provided herein with respect to the Transfer Agent, no third party shall be
justified in relying upon any provision of this Agreement.
10. Modifications; Counterparts; Notices, Etc. No provision of this
agreement shall be waived, modified or amended except by an instrument in
writing signed by the parties hereto. This Agreement may be executed in any
number of counterparts which together shall constitute
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one and the same agreement. All notices, demands, consents, and other
communications required or permitted to be given pursuant to this agreement
shall be in writing and shall be sent by a recognized overnight delivery
service, addressed to the party or parties for whom intended (a) if to a
Purchaser, at its address set forth on Exhibit A-1 or Exhibit A-2 hereto, or (b)
if to Seller, to the address set forth on the signature page hereto, and shall
be deemed effective upon receipt by such party or parties. Any party may change
its address by like notice.
11. Choice of Law. This agreement shall be construed in accordance with and
governed by the internal laws of the State of New York without regard to the
conflicts of law provisions thereof (other than section 5-1401 of the New York
General Obligations Law).
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year first above written.
SELLER:
------
FORD MOTOR COMPANY
By: /s/Xxxxxx Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-fact
Address:
Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Secretary
PURCHASERS:
----------
XXXXXXX EMERGING GROWTH PARTNERS, L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX CONTRARIAN FUND, L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
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XXXXXXX EMERGING GROWTH PARTNERS (CAYMANS), L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX CAPITAL PARTNERS II, L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX CAPITAL PARTNERS II
(BERMUDA), L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX CAPITAL PARTNERS III, L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX CAPITAL PARTNERS III A, L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
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XXXXXXX CAPITAL PARTNERS III
(BERMUDA), L.P.
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXXX GROWTH FUND
By: /s/Xxxxx X. X. Xxxxx
---------------------------
Name: Xxxxx X. X. Xxxxx
Title: Executive Vice President & Portfolio
Manager
XXXXXXX SMALL-CAP GROWTH FUND
By: /s/Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President & Portfolio
Manager
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EXHIBIT A-1
-----------
Organization State of
Private Investment Fund Name Address Type Formation
----------------------------------------------------------- ----------------- ------------------ ----------------
Xxxxxxx Emerging Growth Partners, L.P. A L.P. Delaware
Xxxxxxx Contrarian Fund, L.P. A L.P. Delaware
Xxxxxxx Emerging Growth Partners (Caymans), L.P. B L.P. Cayman Islands
Xxxxxxx Capital Partners II, L.P. A L.P. Delaware
Xxxxxxx Capital Partners II (Bermuda), L.P. C L.P. Bermuda
Xxxxxxx Capital Partners III, L.P. A L.P. Delaware
Xxxxxxx Capital Partners III A, L.P. A L.P. Delaware
Xxxxxxx Capital Partners III (Bermuda), L.P. C L.P. Bermuda
Addresses
---------
A 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
B Hemisphere Fund Managers Limited
0xx Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
C Hemisphere Management Limited
Xxxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx, XX00
X-0
EXHIBIT A-2
-----------
Organization State of
Mutual Fund Name Address Type Formation
----------------------------------------------------------- ----------------- ------------------ ----------------
Xxxxxxx Growth Fund A Corporation Maryland
Xxxxxxx Small-Cap Growth Fund A Corporation Maryland
Addresses
A 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
X-0
XXXXXXX X-0
-----------
Investment in
Fund Name Investment Decision Maker* ENTITY Investment Decision Maker* INDIVIDUALS Underlying Fund
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Needham Emerging Growth Xxxxxxx Management Partners, L.P. Xxxxxx X. Xxxxxxx, General Partner YES
Partners, L.P. Xxxxx X. Xxxxxxxxxxx, General Partner YES
Xxxx X. Xxxxxxxxxx, General Partner YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Needham Contrarian Fund, X.X. Xxxxxxx Management Partners, L.P. Xxxxxx X. Xxxxxxx, General Partner YES
Xxxxx X. Xxxxxxxxxxx, General Partner YES
Xxxx X. Xxxxxxxxxx, General Partner YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Needham Emerging Growth Xxxxxxx Management Partners, L.P. Xxxxxx X. Xxxxxxx, General Partner NO
Partners (Caymans), L.P. Xxxxx X. Xxxxxxxxxxx, General Partner NO
Xxxx X. Xxxxxxxxxx, General Partner NO
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Capital Partners II, Xxxxxxx Capital Management LLC Xxxxxx X. Xxxxxxx, Member YES
L.P. Xxxx X. Xxxxxxxxxx, Member YES
Xxxx X. Prior, Jr., Member YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Capital Partners III, Xxxxxxx Capital Management LLC Xxxxxx X. Xxxxxxx, Member YES
L.P. Xxxx X. Xxxxxxxxxx, Member YES
Xxxx X. Prior, Jr., Member YES
Xxxxxx X. Xxxxxxxx, Memb YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Capital Partners III A, Xxxxxxx Capital Management LLC Xxxxxx X. Xxxxxxx, Member YES
L.P Xxxx X. Xxxxxxxxxx, Member YES
Xxxx X. Prior, Jr., Member YES
Xxxxxx X. Xxxxxxxx, Member YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Capital Partners II Xxxxxxx Capital Management Xxxxxx X. Xxxxxxx, Member YES
(Bermuda), L.P. (Bermuda), LLC Xxxx X. Xxxxxxxxxx, Member YES
Xxxx X. Prior, Jr., Member YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Capital Partners III Xxxxxxx Capital Management Xxxxxx X. Xxxxxxx, Member YES
(Bermuda), L.P. (Bermuda), LLC Xxxx X. Xxxxxxxxxx, Member YES
Xxxx X. Prior, Jr., Member YES
Xxxxxx X. Xxxxxxxx, Member YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Growth Fund Xxxxxxx Investment Management, LLC Xxxxx X.X. Xxxxx, Executive Vice-President YES
--------------------------------- ----------------------------------- ------------------------------------------------ ----------
Xxxxxxx Small-Cap Growth Xxxxxxx Investment Management, LLC Xxxxxxx X. Xxxxxxxxx, Executive Vice-President YES
Fund
--------------------------------- ----------------------------------- ------------------------------------------------- ---------
* As such term is defined in Section 3(e) of the Restricted Share Purchase
Agreement.
A-3
EXHIBIT B
---------
Shares to be Purchase Price
Purchaser Name Purchased Paid
----------------------------------------------------------------------- ---------------- ------------------
Xxxxxxx Emerging Growth Partners, L.P. 200,000 $ 1,400,000.00
Xxxxxxx Contrarian Fund, L.P. 125,000 $ 875,000.00
Xxxxxxx Emerging Growth Partners (Caymans), L.P. 60,000 $ 420,000.00
Xxxxxxx Capital Partners II, L.P. 87,710 $ 613,970.00
Xxxxxxx Capital Partners II (Bermuda), L.P. 12,290 $ 86,030.00
Xxxxxxx Capital Partners III, L.P. 115,366 $ 807,562.00
Xxxxxxx Capital Partners III A, L.P. 11,863 $ 83,041.00
Xxxxxxx Capital Partners III (Bermuda), L.P. 22,771 $ 159,397.00
Xxxxxxx Growth Fund 277,301 $ 1,941,107.00
Xxxxxxx Small-Cap Growth Fund 15,000 $ 105,000.00
---------------- ------------------
927,301 $ 6,491,107.00
================ ==================
B-1
Exhibit C-1
-----------
1. Medallion Guaranteed stock powers signed by an authorized representative of
Ford Motor Company.
2. Evidence of the authorized representative's authority to sign on behalf of
Ford Motor Company.
3. The Ceradyne stock certificates that are being transferred.
4. A legal opinion to the effect that the transfer of the shares is exempt from
registration under the Securities Act of 1933, which may include qualifications.
C-1
Exhibit C-2
-----------
1. Instructions as to whom the shares are to be transferred to, including names
of record owners, addresses, and tax identification numbers.
2. Delivery instructions as to how the stock certificates are to be delivered to
the transferees (including overnight courier account number to charge if
applicable.
