Exhibit 10(v)
MERRIMAC INDUSTRIES INC.
SUBSCRIPTION AGREEMENT
FOR COMMON STOCK AND WARRANTS
SUBSCRIPTION AGREEMENT (the "Agreement") dated as of October 26,
2000, among MERRIMAC INDUSTRIES INC., a New Jersey corporation (together with
all subsidiaries, the "Company"), and the persons who execute this agreement as
investors (the "Investors").
WHEREAS, the Company desires to sell to the Investors, and the
Investors desire to purchase, 240,000 units ("Units") each consisting of one
share of the Company's Common Stock, $.50 par value per share (the "Common
Stock") and one three-year warrant, each exercisable to purchase one share of
the Company's Common Stock, in substantially the form attached hereto as Exhibit
1 (the "Warrants"); and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Purchase and Sale of Securities.
1.1. Sale and Issuance of Purchased Securities. The Company
shall sell to the Investors and the Investors shall purchase from the Company,
240,000 Units (the "Purchased Units"), each consisting of one share of Common
Stock and one Warrant, at a price of $12.80 per Unit, or a total of 240,000
shares of Common Stock (the "Purchased Shares") and 240,000 Warrants (the
"Purchased Warrants"), for an aggregate purchase price of $3,072,000. The
Purchased Units, Purchased Shares and Purchased Warrants are referred to herein
collectively as the "Purchased Securities". The number of Purchased Shares and
Purchased Warrants to be purchased by each Investor from the Company is set
forth opposite the name of such Investor on the signature pages hereof, subject
to acceptance, in whole or in part, by the Company.
1.2. Closing. The purchase and sale of the Purchased
Securities hereunder shall take place at a closing (the "Closing"; the date on
which the Closing occurs is hereinafter referred to as the "Closing Date"). The
Closing shall take place concurrently with the execution and delivery of this
Agreement by the Investors purchasing Purchased Securities at such Closing. At
the Closing:
(a) each of the Investors purchasing Purchased
Securities shall deliver to the Company or its designees by wire transfer, or
such other method of payment as the Company shall approve, an amount equal to
the purchase price of such Investor's portion of the Purchased Securities, as
set forth opposite such Investor's name on the signature pages hereof;
(b) the Company shall issue and deliver to each
Investor purchasing Purchased Securities at such Closing (i) a certificate or
certificates for such Investor's portion of the Purchased Shares and (ii)
warrants for such Investor's portion of the Purchased Warrants, as set forth
opposite such Investor's name on the signature pages hereof;
(c) the Company and the Investors shall execute and
deliver a Registration Rights Agreement in the form attached hereto as Exhibit 2
(the "Registration Agreement") with respect to the Purchased Securities;
(d) the Company shall deliver to the Investors
evidence of the consent of Ericsson Holding International, B.V., and any
affiliate thereof, to the terms, execution and delivery of this Agreement, the
Registration Agreement and the Contemplated Transactions, to the extent
necessary;
(e) the Company shall deliver to the Investors an
Opinion of Counsel, reasonably satisfactory to counsel for the Investors, with
respect to the matters set forth on Exhibit 3; and
(f) if the Closing shall occur, the Company shall
pay the Investors' expenses to the extent set forth in Section 6.9 hereof.
All certificates shall have all necessary stock transfer tax
stamps (purchased at the expense of the Company) affixed.
The parties agree that for purposes of allocating the price paid
for the Purchased Securities, the Purchased Warrants have a nominal value.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to each of the Investors as follows:
2.1. Corporate Organization; Authority; Due Authorization.
(a) The Company (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the corporate power and authority to own or lease its properties as, and in the
places where, such business is now conducted, and to carry on its business as
now conducted and (iii) is duly qualified and in good standing as a foreign
corporation authorized to do business in every jurisdiction where the failure to
so qualify, individually or in the aggregate, would have a material adverse
effect on the business, results of operations or financial condition of the
Company (a "Company Material Adverse Effect").
(b) The Company (i) has the requisite corporate
power and authority to execute, deliver and perform this Agreement and the other
agreements contemplated hereby to which it is a party, including without
limitation the Warrants and Registration Agreement, (collectively, the "Other
Agreements" and, with this Agreement, the "Agreements") and to incur the
obligations herein and therein and (ii) has been authorized by all necessary
corporate action to execute, deliver and perform this Agreement and the Other
Agreements and to consummate the transactions contemplated hereby and thereby
(the "Contemplated Transactions"). Each of the Agreements is a valid and binding
obligation of the Company enforceable in accordance with its terms except as
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights and the availability
of equitable remedies (regardless of whether such enforceability is considered
in a proceeding at law or equity).
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2.2. Capitalization. The authorized capital of the Company
consists of 5,000,000 shares of Common Stock, $.50 par value per share (the
"Common Stock"), of which, prior to the sale of shares hereunder, 2,191,157
shares of Common Stock are outstanding. All outstanding shares are fully paid,
are non-assessable and have been validly issued in compliance with all
applicable Federal and state securities laws, and the issuance of such shares
was duly authorized. Except as contemplated by this Agreement, as set forth on
Schedule 2.2 attached hereto, or as described or referred to in the Company
Reports (as defined below) there are (i) no outstanding subscriptions, warrants,
options, conversion privileges or other rights or agreements to purchase or
otherwise acquire or issue any shares of capital stock of the Company (or shares
reserved for such purpose), (ii) no preemptive rights or rights of first refusal
with respect to the issuance of additional shares of capital stock of the
Company, including without limitation the Purchased Securities and the shares of
Common Stock which the Purchased Warrants are exercisable to purchase, and (iii)
no commitments or understandings (oral or written) of the Company to issue any
shares, warrants, options or other rights. To the Company's knowledge, except as
set forth in the Company Reports, none of the shares of Common Stock are subject
to any shareholders' agreement, voting trust agreement or similar arrangement or
understanding. Except as set forth in the Company Reports, the Company has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company on any
matter.
2.3. Validity of Purchased Shares. The issuance of the
Purchased Shares has been duly authorized, and when issued, sold and delivered
in accordance with the terms and for the consideration expressed herein, the
Purchased Shares shall be validly issued, fully paid and non-assessable and free
and clear of all encumbrances and restrictions, except for restrictions on
transfers imposed by applicable securities laws, the certificate of
incorporation of the Company and this Agreement.
2.4. Common Stock Issuable upon Exercise of Purchased
Warrants. The issuance of the shares of Common Stock (the "Underlying Shares")
issuable upon exercise of the Purchased Warrants has been duly authorized and
the Underlying Shares have been, and at the time of such exercise will have
been, duly reserved for issuance upon such exercise and, when so issued, will be
validly issued, fully paid and non-assessable and free and clear of all
encumbrances and restrictions, except for restrictions on transfers imposed by
applicable securities laws, the certificate of incorporation of the Company and
this Agreement.
2.5. Private Offering. Neither the Company nor anyone
acting on its behalf has, within the last 12 months, issued, sold or offered any
security of the Company (including, without limitation, any Purchased
Securities) to any Person (as hereinafter defined) under circumstances that
would cause the issuance and sale of the Purchased Securities, as contemplated
by this Agreement, to be subject to the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). The Company agrees
that neither the Company nor anyone acting on its behalf will offer the
Purchased Securities or any part thereof or any similar securities for issuance
or sale to, or solicit any offer to acquire any of the same from, anyone so as
to make the issuance and sale of the Purchased Securities subject to the
registration requirements of Section 5 of the Securities Act.
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2.6. Brokers and Finders. Except for Nexbridge Capital,
whose fees and expenses will be paid by the Company, the Company has not
retained any investment banker, broker or finder in connection with the
Contemplated Transactions.
2.7. No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement and the Other Agreements
by the Company do not, and the consummation by the Company of the Contemplated
Transactions will not, (i) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the Company or by
which any property or asset of the Company is bound or affected, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of purchase or sale, or any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company is a party or by which the Company or any property or asset
of the Company is bound or affected, except, in the case of clauses, (ii) and
(iii) above, for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay consummation of any of the
Contemplated Transactions in any material respect, or otherwise prevent the
Company from performing its obligations under this Agreement or any of the Other
Agreements in any material respect, and would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement and
the Other Agreements by the Company do not, and the performance of this
Agreement and the Other Agreements and the consummation by the Company of the
transactions contemplated hereby will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Body (as hereinafter defined) except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or any state
securities or "blue sky" laws ("Blue Sky Laws"). For purposes of this Agreement
"Governmental Body" shall mean any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; or (c)
governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or entity and any court or other tribunal).
2.8. Compliance. The Company is in compliance in all
material respects with all requirements of law of any Governmental Body, and no
claims or complaints from any Governmental Body have been received by the
Company and, to the knowledge of the Company, no claims or complaints are
threatened, alleging that the Company is in violation of any such requirement of
law except for such claims or complaints which have not had, individually or in
the aggregate, a Company Material Adverse Effect.
2.9. SEC Documents. (a) The Company has filed all forms,
reports and documents required to be filed by it with the Securities and
Exchange Commission (the "SEC") since January 1, 1999 (collectively, the
"Company Reports"). As of their respective dates, the Company Reports filed
prior to the date hereof (i) complied as to form in all material
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respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. The
representation in clause (ii) of the preceding sentence shall not apply to any
misstatement or omission in any Company Report filed prior to the date of this
Agreement which was superseded by a subsequent Company Report filed prior to the
date of this Agreement.
(b) Each of the consolidated balance sheets of
Company included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents in all material
respects the consolidated financial position of the Company as of the date of
such, and each of the consolidated statements of income, retained earnings and
cash flows of Company included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly presents in all
material respects the results of operations, retained earnings or cash flows, as
the case may be, of the Company for the periods set forth therein (subject, in
the case of unaudited statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except as may be noted therein.
2.10. Litigation. Except as set forth in the Company
Reports and in Schedule 2.10, there are no claims, actions, suits,
investigations, inquiries or proceedings (each, an "Action") pending against the
Company or, to the knowledge of the Company, threatened against the Company, at
law or in equity, or before or by any court, tribunal, arbitrator, mediator or
any federal or state commission, board, bureau, agency or instrumentality, that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect. The Company is not a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality.
2.11. Absence of Certain Changes. Except as disclosed in
the Company Reports, since July 1, 2000 the Company has not incurred any
liabilities or obligations (whether absolute or contingent) other than those
arising from operations in the ordinary course of business consistent with past
practice. Since July 1, 2000, except as disclosed in the Company Reports, there
has not been (i) any event, occurrence, development or circumstances with
respect to the business, results of operations or financial condition of the
Company except events, occurrences, developments or circumstances which have not
had, individually or in the aggregate, a Company Material Adverse Effect, (ii)
any return of any capital or other distribution of assets to stockholders of
Company (except to Company); (iii) any acquisition (by merger, consolidation,
acquisition of stock and/or assets or otherwise) of any Person; (iv) any
transactions, other than in the ordinary course of business, with any of its
officers, directors, principal shareholders or employees or any Person
affiliated with any of such persons; or (v) any existing, pending or, to the
knowledge of the Company, threatened termination, cancellation, limitation,
modification or change in the business relationship of the Company, with any
supplier, customer or other Person, including without limitation Ericsson
Microelectronics A.B. or Ericsson Holding International, B.V. or any affiliates
thereof, except such as would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
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2.12. Intellectual Property. To the Company's knowledge,
the Company and its subsidiaries owns or possesses sufficient legal rights to
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other rights or interests
in items of intellectual property (the "Patent and Proprietary Rights") as are
necessary for the operation of the business presently as conducted by the
Company. To the Company's knowledge, the business of the Company and its
subsidiaries as presently conducted does not infringe upon or violate any Patent
and Proprietary Rights of others except where such infringement or violation,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.
2.13. Registration Rights. Except as set forth in the
Registration Agreement, the Registration Rights Agreement entered into on April
7, 2000 between the Company and Ericsson Holding International, B.V. or in the
Ericsson Registration Agreement (as defined in the Registration Agreement), the
Company is not under any obligation to register under the Securities Act any of
its currently outstanding securities or any securities issuable upon exercise or
conversion of its currently outstanding securities nor is the Company obligated
to register or qualify any such securities under any state securities or blue
sky laws.
2.14. Corporate Documents. The Company's Certificate of
Incorporation and Bylaws of the Company which have been requested and previously
provided to the Investors are true, correct and complete and contain all
amendments thereto.
2.15. Disclosure. No representation or warranty of the
Company herein and no information contained or referenced in the Company Reports
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.
3. Representations and Warranties of the Investors. Each
Investor represents and warrants to the Company as follows:
3.1. Authorization. Each Investor (i) has full power and
authority to execute, deliver and perform this Agreement and the Other
Agreements to which it is a party and to incur the obligations herein and
therein and (ii) if applicable has been authorized by all necessary corporate or
equivalent action to execute, deliver and perform this Agreement and the Other
Agreements and to consummate the Contemplated Transactions. Each of this
Agreement and the Other Agreements is a valid and binding obligation of such
Investor enforceable in accordance with its terms, except as limited by
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights and the availability of equitable
remedies (regardless of whether such enforceability is considered in a
proceeding at law or equity).
3.2. Brokers and Finders. Such Investor has not retained
any investment banker, broker or finder in connection with the Contemplated
Transactions.
4. Securities Laws.
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4.1. Securities Laws Representations and Covenants of
Investors. (a) This Agreement is made with each Investor in reliance upon such
Investor's representation to the Company, which by such Investor's execution of
this Agreement such Investor hereby confirms, that the Purchased Securities to
be received by such Investor will be acquired for investment for such Investor's
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof such that such Investor would constitute an
"underwriter" under the Securities Act. Such Investor has not granted any right
to any other Person to acquire any of the Purchased Securities purchased by such
Investor, or the respective Underlying Shares.
(b) Each Investor understands and acknowledges that
the offering of the Purchased Securities pursuant to this Agreement will not be
registered under the Securities Act or qualified under any Blue Sky Laws on the
grounds that the offering and sale of the Purchased Securities are exempt from
registration and qualification, respectively, under the Securities Act and the
Blue Sky Laws, and that the Company's reliance upon such exemption is predicated
upon such Investor's representations set forth in this Agreement.
(c) Each Investor covenants that, unless the
Purchased Shares, the Purchased Warrants, the Underlying Shares or any other
shares of capital stock of the Company received in respect of the foregoing have
been registered pursuant to the Registration Rights Agreement being entered into
among the Company and the Investors, such Investor will not dispose of such
securities unless and until such Investor shall have notified the Company of the
proposed disposition and, upon request of the Company following such
notification, shall have furnished the Company with an opinion of counsel
reasonably satisfactory in form and substance to the Company to the effect that
(x) such disposition will not require registration under the Securities Act and
(y) appropriate action necessary for compliance with the Securities Act and any
applicable state, local or foreign law has been taken.
(d) In connection with the investment
representations made herein, each Investor represents that (i) such Investor is
able to fend for itself in the Contemplated Transactions; (ii) such Investor has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of such Investor's prospective investment in
the Purchased Securities; (iii) such Investor has the ability to bear the
economic risks of such Investor's prospective investment and can afford the
complete loss of such investment; (iv) such Investor believes that such Investor
has received all the information such Investor considers necessary and
appropriate for deciding whether to purchase the Purchased Securities; (v) such
Investor has been furnished with and has had access to the Company Reports
together with the opportunity to obtain such additional information as it
requested to verify the accuracy of the information supplied; and (vi) such
Investor has had access to officers of the Company and an opportunity to ask
questions of and receive answers from such officers and has had all questions
that have been asked by such Investor satisfactorily answered by the Company.
(e) Each Investor further represents by execution of
this Agreement that such Investor qualifies as an "accredited investor" as such
term is defined under Rule 501 promulgated under the Securities Act. Any
Investor that is a corporation, partnership, limited liability company, trust or
other business entity further represents by execution of this Agreement that it
has not been organized for the purpose of purchasing the Purchased Securities.
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(f) By acceptance hereof, each Investor agrees that
the Purchased Shares, the Purchased Warrants, the Underlying Shares and any
shares of capital stock of the Company received in respect of the foregoing held
by such Investor may not be sold by such Investor without registration under the
Securities Act or an exemption therefrom, and therefore such Investor may be
required to hold such securities for an indeterminate period.
4.2. Transfer Restrictions. Each Investor hereby agrees not
to sell, assign or otherwise transfer (hereinafter, a "Transfer") any Purchased
Shares, Purchased Warrants or Underlying Shares to any Competitor or Person (or
group of Persons) who have filed and not withdrawn a Schedule 13D indicating a
plan to seek control of the Company (such Competitor or other Person or group of
Persons being hereinafter referred to as a "Non-Qualified Person"); provided
that the foregoing shall not apply to Transfers (i) to affiliates, family
members or trusts for the benefit of family members so long as such transferee
is not a Non-Qualified Person, (ii) to the public pursuant to a registration
statement under an underwriting agreement or otherwise, provided that such
Investor shall not make such a Transfer knowingly to a Non-Qualified Person;
(iii) pursuant to Rule 144 under the Act in brokers' transactions or
transactions with market makers (as defined in Rule 144) or (iv) in connection
with a sale of more than 50% of the shares of the Company; provided that the
foregoing restrictions shall apply only to the extent they are not more onerous
than similar restrictions which have been agreed to in writing by Ericsson
Holdings International, B.V. or its affiliates, with respect to shares of Common
Stock or warrants or other rights in respect thereof, acquired on or after the
date hereof, and not waived by the Company. As used herein, "Competitor" shall
mean any Person who is (i) directly or indirectly engaged in any business which
the Company determines, in good faith, to be competing with any business of the
Company (provided that the passive investment by a financial investor of (x) ten
percent (10%) or less of any class of equity securities of any Person, on a
fully diluted basis, shall not be determined to be a competing interest for
purposes of this clause (i)) or (ii) an affiliate (as defined in Rule 144) of
any Person described in clause (i). For purposes of this definition, a financial
investor shall have made a "passive investment" in another Person if such
financial investor does not (x) actively manage the business or affairs of such
Person, (y) have the right to nominate or appoint one or more directors to the
board of directors of such Person or (z) have a board observation right with
respect to meetings of the board of directors of such Person. As used herein,
"Person" shall mean any individual, sole proprietorship, partnership,
corporation, limited liability company, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity, any
university or similar institution, or any government or any agency or
instrumentality or political subdivision thereof.
4.3. Legends. All certificates for the Purchased Shares,
Purchased Warrants and the Underlying Shares, and each certificate representing
any shares of capital stock of the Company received in respect of the foregoing,
whether by reason of a stock split or share reclassification thereof, a stock
dividend thereon or otherwise and each certificate for any such securities
issued to subsequent transferees of any such certificate (unless otherwise
permitted herein) shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
[SECURITIES REPRESENTED BY THIS WARRANT] ARE SUBJECT TO
A SUBSCRIPTION AGREEMENT FOR COMMON STOCK AND WARRANTS
DATED AS OF OCTOBER 26, 2000, AS THE SAME MAY
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BE AMENDED FROM TIME TO TIME, PURSUANT TO THE TERMS OF
WHICH THE TRANSFER OF SUCH SECURITIES ARE RESTRICTED.
SUCH AGREEMENT ALSO PROVIDES FOR VARIOUS OTHER
LIMITATIONS AND OBLIGATIONS AND ALL OF THE TERMS
THEREOF ARE INCORPORATED BY REFERENCE HEREIN. A COPY OF
SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
ISSUER TO THE HOLDER HEREOF UPON REQUEST."
"THE SHARES REPRESENTED BY THIS CERTIFICATE
[SECURITIES REPRESENTED BY THIS WARRANT AND ANY SHARES
ACQUIRED UPON EXERCISE OF THIS WARRANT] HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SHARES [THIS
WARRANT AND SUCH SHARES] MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. [THIS WARRANT AND SUCH SHARES
MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS
SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF THIS
WARRANT OR SUCH SHARES SHALL BE VALID OR EFFECTIVE
UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN
COMPLIED WITH.]"
In addition, such certificates shall bear any legend that, in the opinion of the
Company's counsel, is required under the Other Documents or pursuant to any
state, local or foreign law governing the Purchased Securities.
5. Additional Covenants of the Company.
5.1. Reports, Information, Shares. (a) The Company shall
cooperate with each Investor in supplying such information as may be reasonably
requested by such Investor to complete and file any information reporting forms
presently or hereafter required by the SEC as a condition to the availability of
an exemption, presently existing or hereafter adopted, from the Securities Act
for the sale of any of the Purchased Shares, the Purchased Warrants, the
Underlying Shares and shares of capital stock of the Company received in respect
of the foregoing.
(b) The Company shall deliver to each Investor,
contemporaneously with delivery to other holders of Common Stock, a copy of each
report of the Company delivered to holders of Common Stock.
(c) The Company shall keep reserved for issuance a
sufficient number of authorized but unissued shares of Common Stock so that the
Purchased Warrants may be exercised to purchase Common Stock at any time.
5.2. Expenses. The Company agrees to pay on the Closing
Date and save the Investors harmless against liability for the payment of any
stamp or similar taxes (including interest and penalties, if any) that may be
determined to be payable in respect of the
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execution and delivery of this Agreement, the issue and sale of any Purchased
Securities, the expense of preparing and issuing the Purchased Securities and
the Underlying Shares, the cost of delivering the Purchased Securities and the
Underlying Shares of each Investor to such Investor's address, insured to such
Investor's satisfaction, and the costs and expenses incurred in the preparation
of all certificates and letters on behalf of the Company and of the Company's
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with. Each Investor shall be responsible
for its out-of-pocket expenses arising in connection with the Contemplated
Transactions, except that, at the Closing, the Company shall pay fees and
disbursements of counsel to the Investors as set forth in Section 6.9.
6. Miscellaneous.
6.1. Entire Agreement; Successors and Assigns. This
Agreement, and the Other Agreements constitute the entire contract between the
parties relative to the subject matter hereof and thereof and no party shall be
liable or bound to the other in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein. Any previous
agreement among the parties with respect to the Purchased Securities is
superseded by this Agreement and the Other Agreements. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective executors, administrators, heirs, successors and assigns of the
parties. Except as expressly provided herein, nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
6.2. Survival of Representations and Warranties.
Notwithstanding any right of the Investors fully to investigate the affairs of
the Company and notwithstanding any knowledge of facts determined or
determinable by any Investor pursuant to such right of investigation or right of
investigation, each Investor has the right to rely fully upon the
representations, warranties, covenants and agreements of the Company contained
in this Agreement or in any documents delivered pursuant to this Agreement. All
such representations and warranties of the Company shall survive the execution
and delivery of this Agreement and the Closing hereunder for two years. The
covenants of the Company set forth in Section 5 shall remain in effect as set
forth therein.
6.3. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law. Each party hereby irrevocably
consents and submits to the jurisdiction of any New York State or United States
Federal Court sitting in the State of New York, County of New York, over any
action or proceeding arising out of or relating to this Agreement and
irrevocably consents to the service of any and all process in any such action or
proceeding by registered mail addressed to such party at its address specified
in Section 6.6. Each party further waives any objection to venue in New York and
any objection to an action or proceeding in such state and county on the basis
of forum non conveniens. Each party also waives any right to trial by jury.
6.4. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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6.5. Headings. The headings of the sections of this
Agreement are for convenience and shall not by themselves determine the
interpretation of this Agreement.
6.6. Notices. Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery and if a fax number has been provided, upon delivery (with answerback
confirmed), addressed to a party at its address and the fax number, if any,
shown below or at such other address and fax number as such party may designate
by three days advance notice to the other party. Any notice to the Investors
shall be sent to the addresses set forth on the signature pages hereof, with a
copy to:
Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000,
Fax Number: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
Any notice to the Company shall be sent to:
Merrimac Industries, Inc.
00 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
6.7. Rights of Transferees. Any and all rights and
obligations of each of the Investors herein incident to the ownership of
Purchased Securities or the Underlying Shares shall pass successively to all
subsequent transferees of such Purchased Securities or Underlying Shares until
extinguished pursuant to the terms hereof, for instance, in a Transfer in
accordance with Section 4.2(ii), (iii) or (iv).
6.8. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
deemed prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement.
6.9. Expenses. Irrespective of whether the Closing is
effected, the Company shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement. Each Investor shall be responsible for
11
all costs incurred by such Investor in connection with the negotiation,
execution, delivery and performance of this Agreement including, but not limited
to, legal fees and expenses, except that, at the Closing, the Company shall pay
documented legal fees and expenses of up to $30,000 to Xxxx & Hessen LLP, as
counsel to the Investors.
6.10. Amendments and Waivers. Unless a particular provision
or section of this Agreement requires otherwise explicitly in a particular
instance, any provision of this Agreement may be amended and the observance of
any provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of seventy-five percent (75%) of
the then outstanding Purchased Shares. Any amendment or waiver effected in
accordance with this Section 6.10 shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.
[Balance of page intentionally left blank.]
12
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the PURCHASER is an INDIVIDUAL, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this 26th day of October, 2000.
Amount of Subscription:
$1,167,360
Number of Purchased Shares: Xxxx Xxxxxxxxx
91,200 ----------------------------------
Print Name
/s/ Xxxx Xxxxxxxxx
----------------------------------
Signature of Investor
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
13
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the PURCHASER is an INDIVIDUAL, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this 26th day of October, 2000.
Amount of Subscription:
$99,840
Number of Purchased Shares Xxxx Xxxxxx
7,800 ----------------------------------
Print Name
/s/ Xxxx Xxxxxx
----------------------------------
Signature of Investor
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
14
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the PURCHASER is an INDIVIDUAL, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this 26th day of October, 2000.
Amount of Subscription:
$58,880
Number of Purchased Shares: Xxxxxx Xxxxxxxx
4,600 ----------------------------------
Print Name
/s/ Xxxxxx Xxxxxxxx
----------------------------------
Signature of Investor
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
15
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the PURCHASER is an INDIVIDUAL, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this 26th day of October, 2000.
Amount of Subscription:
$290,560
Number of Purchased Shares: Xxxxxxx X. Xxxxxxxxx
22,700 ----------------------------------
Print Name
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Signature of Investor
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
16
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the INTERESTS will be held as JOINT TENANTS, as TENANTS IN
COMMON, or as COMMUNITY PROPERTY, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 26th day of October, 2000.
Amount of Subscription: Xxxxxxx and Xxx Xxxxxxxx JTWROS
$256,000 ---------------------------------------
Print Name of a Purchaser
Number of Purchased Shares: /s/ Xxxxxxx Xxxxxxxx
20,000 ---------------------------------------
Signature of a Purchaser
Xxx Xxxxxxxx
---------------------------------------
Print Name of Spouse or Other Purchaser
/s/ Xxx Xxxxxxxx
---------------------------------------
Signature of Spouse or Other Purchaser
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
17
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26, 2000
IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, TRUST or OTHER ENTITY, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 26th day of October, 2000.
Amount of Subscription:
$199,680
Number of Purchased Shares:
15,600
Xxxx Xxxxx Investments, Ltd.
--------------------------------------------------------
Print Full Legal Name of Partnership, Corporate, Limited
Liability Company, Trust or Other Entity
By: /s/ Xxxx Xxxxxx
-----------------------------------------------------
(Authorized Signatory)
Name: Xxxx Xxxxxx
Title: Director
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------------------
(Authorized Signatory)
Name: Xxxxxx Xxxxxxx
Title: Director
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
18
SIGNATURE PAGE
TO
MERRIMAC INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
dated
October 26 , 2000
IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, TRUST or OTHER ENTITY, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 26th day of October, 2000.
Amount of Subscription:
$999,680
Number of Purchased Shares:
78,100
Xxxx Xxxxx Investment Partners, L.P.
--------------------------------------------------------
Print Full Legal Name of Partnership, Corporate, Limited
Liability Company, Trust or Other Entity
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------------------
(Authorized Signatory)
Name: Xxxxxxx Xxxxxxxx
Title: Manager, Xxxx Xxxxx Management, LLC,
General Partner
ACCEPTED AND AGREED:
MERRIMAC INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx - Vice President, Finance
and Chief Financial Officer
Dated: 10/26/00
19
[Form of Warrant]
Void after October 26, 2003 Warrant No. 2000- ____
[Name of Investor] to acquire _____ shares
Securities Subject to this Warrant are subject to a Subscription
Agreement for Common Stock and Warrants dated as of October 26,
2000 as the same may be amended from time to time, pursuant to the
terms of which the transfer of such securities are restricted.
Such Agreement also provides for various other limitations and
obligations and all of the terms thereof are incorporated by
reference herein. A copy of such Agreement will be furnished
without charge by the Issuer to the Holder hereof upon request.
Securities represented by this Warrant and any share acquired upon
exercise of this Warrant have been acquired for investment and
have not been registered under the Securities Act of 1933. This
Warrant and such shares may not be sold or transferred in the
absence of registration or an exemption therefrom under said Act.
This Warrant and such shares may not be transferred except upon
the conditions specified in this Warrant, and no transfer of this
Warrant or such shares shall be valid or effective unless and
until such conditions shall have been complied with.
MERRIMAC INDUSTRIES, INC.
COMMON STOCK PURCHASE WARRANT
Merrimac Industries, Inc. (the "Company"), having its principal
office at 00 Xxxxxxxxx Xxxxx Xxxx Xxxxxxxx, Xxx Xxxxxx 00000 hereby certifies
that, for value received, [Name of Investor], or assigns, is entitled, subject
to the terms set forth below, to purchase from the Company at any time on or
from time to time after October 26, 2000 and before 5:00 P.M., New York City
time, on October 26, 2003 or as extended in accordance with the terms hereof
(the "Expiration Date"), [_____] fully paid and non-assessable shares of Common
Stock of the Company, at the initial Purchase Price per share (as defined below)
of $21.25. The number and character of such shares of Common Stock and the
Purchase Price per share are subject to adjustment as provided herein.
Background The Company agreed to issue warrants to purchase up to
an aggregate of 240,000 shares of Common Stock (subject to adjustment as
provided herein) in connection with (i) the Company's private placement (the
"Private Placement") of 240,000 units ("Units") each consisting of one share of
Common Stock and one three-year warrant (each a "Warrant" and collectively the
"Warrants"). This Warrant is one of the Warrants originally issued as of the
Original Issue Date (as defined below).
20
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
The term "Amex" means the American Stock Exchange or other
principal market on which the Common Stock is traded.
The term "Company" includes the Company and any corporation which
shall succeed to or assume, directly or indirectly, the obligations of the
Company hereunder.
The term "Common Stock" includes all stock of any class or classes
(however designated) of the Company, authorized upon the Original Issue Date or
thereafter, the Holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the Holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been suspended by
the happening of such a contingency).
The term "Dilution Price" means $12.80 per share, as adjusted from
time to time in accordance with the terms hereof.
The term "Exchange Act" means the Securities Exchange Act of 1934
as the same shall be in effect at the time.
The term "Holder" means any record owner of Warrants or Underlying
Securities.
The "Original Issue Date" is October 26, 2000, the date as of
which the Warrants were first issued.
The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the Holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 6 or otherwise.
The term "Purchase Price per share" means $21.25 per share, as
adjusted from time to time in accordance with the terms hereof.
The terms "registered" and "registration" refer to a registration
effected by filing a registration statement in compliance with the Securities
Act, to permit the disposition of Common Stock (or Other Securities) issued or
issuable upon the exercise of Warrants, and any post-effective amendments and
supplements filed or required to be filed to permit any such disposition.
The term "Securities Act" means the Securities Act of 1933 as the
same shall be in effect at the time.
21
The term "Strategic Partner" means a significant actual or
potential customer or vendor (of non-financial products and services of the
Company) or a manufacturer or marketer of non-financial products suitable to be
marketed jointly with the products and services of the Company.
The term "Underlying Securities" means any Common Stock or Other
Securities issued or issuable upon exercise of Warrants.
The term "Warrant" shall mean, as applicable, this Warrant or each
right as set forth in this Warrant to purchase one share of Common Stock, as
adjusted.
1. Registration, etc. The Holder shall have the rights to
registration of Underlying Securities issuable upon exercise of the Warrants
that are set forth in the Registration Rights Agreement, dated the date hereof
between the Company and the Holder (the "Registration Rights Agreement").
2. Sale or Exercise Without Registration. If, at the time of any
exercise, transfer or surrender for exchange of a Warrant or of Underlying
Securities previously issued upon the exercise of Warrants, such Warrant or
Underlying Securities shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such exercise, transfer or
exchange, that the Holder or transferee of such Warrant or Underlying
Securities, as the case may be, furnish to the Company a satisfactory opinion of
counsel to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such Holder or transferee,
as the case may be, and provided further that nothing contained in this Section
2 shall relieve the Company from complying with any request for registration
pursuant to the Registration Rights Agreement or relieve the Holder from the
restrictions on transfer set forth in Section 21 below. The first Holder of this
Warrant, by acceptance hereof, represents to the Company that it is acquiring
the Warrants for investment and not with a view to the distribution thereof.
3. Exercise of Warrant.
3.1. Exercise in Full. Subject to the provisions hereof,
this Warrant may be exercised in full by the Holder hereof by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
Holder, to the Company at its principal office accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock called
for on the face of this Warrant (without giving effect to any adjustment
therein) by the Purchase Price per share.
3.2. Partial Exercise. Subject to the provisions hereof,
this Warrant may be exercised in part by surrender of this Warrant in the manner
and at the place provided in subsection 3.1 except that the amount payable by
the Holder upon any partial exercise shall be the amount obtained by multiplying
(a) the number of shares of Common Stock (without giving effect to any
adjustment therein) designated by the Holder in the subscription at the end
hereof by (b) the Purchase Price per share. Upon any such partial exercise, the
Company at its expense
22
will forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant or Warrants of like tenor, in the name of the Holder hereof or, subject
to the restrictions on transfer set forth in Section 21 below, as such Holder
(upon payment by such Holder of any applicable transfer taxes) may request,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus the number of
such shares designated by the Holder in the subscription at the end hereof.
3.3. Exercise by Surrender of Warrant or Shares of Common
Stock. In addition to the method of payment set forth in Sections 3.1 and 3.2
and in lieu of any cash payment required thereunder, the Holder(s) of the
Warrants shall have the right at any time and from time to time to exercise the
Warrants in full or in part by surrendering shares of Common Stock, the Warrant
Certificate or other securities issued by the Company in the manner and at the
place specified in Section 3.1 as payment of the aggregate Purchase Price per
share for the Warrants to be exercised. The number of Warrants or shares of
Common Stock to be surrendered in payment of the aggregate Purchase Price for
the Warrants to be exercised shall be determined by multiplying the number of
Warrants to be exercised by the Purchase Price per share, and then dividing the
product thereof by an amount equal to the Market Price (as defined below) . The
number of shares of Common Stock or such other securities to be surrendered in
payment of the aggregate Purchase Price for the Warrants to be exercised shall
be determined in accordance with the preceding sentence as if the other
securities had been converted into Common Stock immediately prior to exercise
or, in the case the Company has issued other securities which are not
convertible into Common Stock, at the Market Price thereof.
3.4. Definition of Market Price. As used herein, the phrase
"Market Price" at any date shall be deemed to be (i) if the principal trading
market for such securities is an exchange, the average of the last reported sale
prices per share for the last five previous trading days in which a sale was
reported, as officially reported on any consolidated tape, (ii) if the principal
market for such securities is the over-the-counter market, the average of the
high bid prices per share on such trading days as set forth by Amex or, (iii) if
the security is not quoted on Amex, the average of the high bid prices per share
on such trading days as set forth in the National Quotation Bureau sheet listing
such securities for such days. Notwithstanding the foregoing, if there is no
reported closing price or high bid price, as the case may be, on any of the ten
trading days preceding the event requiring a determination of Market Price
hereunder, then the Market Price shall be determined in good faith by resolution
of the Board of Directors of the Company, based on the best information
available to it.
3.5. Company to Reaffirm Obligations. The Company will, at
the time of any exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights (including, without limitation, any right to registration of the
Underlying Securities) to which such Holder shall continue to be entitled after
such exercise in accordance with the provisions of this Warrant, provided that
if the Holder of this Warrant shall fail to make any such request, such failure
shall not affect the continuing obligation of the Company to afford such Holder
any such rights.
3.6. Certain Exercises. If an exercise of a Warrant or
Warrants is to be made in connection with a registered public offering or sale
of the Company, such exercise may,
23
at the election of the Holder, be conditioned on the consummation of the public
offering or sale of the Company, in which case such exercise shall not be deemed
effective until the consummation of such transaction.
3.7. Holder to Reaffirm Certain Obligations. Except in the
event of exercise of the Warrants in connection with Transfers (as defined
below) of Underlying Securities pursuant to clauses (ii), (iii) or (iv) of
Section 21, the Holder shall, at the time of exercise of this Warrant,
acknowledge in writing such Holder's obligations under Section 21 hereof.
3.8 Exercise Subject to Applicable Law. Notwithstanding
anything to the contrary in this Warrant, this Warrant may be exercised in full
or in part by the Holder only if and to the extent that such exercise, and the
Company's delivery of shares of Common Stock upon such exercise, would not
conflict with or result in a violation of any applicable law, prohibition, rule
or regulation.
4. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three business days thereafter, the Company at its own expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or, subject to the
restrictions on transfer set forth in Section 21 below, as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct, a
certificate or certificates for the number of fully paid and non-assessable
shares of Common Stock or Other Securities to which such Holder shall be
entitled upon such exercise, plus, in lieu of any fractional share to which such
Holder would otherwise be entitled, cash equal to such fraction multiplied by
the then current Market Price of one full share, together with any other stock
or other securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to Section 5 or otherwise.
5. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. (a) In case at any time or from time to time after the
Original Issue Date the holders of Common Stock (or, if applicable, Other
Securities) shall have received, or (on or after the record date fixed for the
determination of stockholders eligible to receive) shall have become entitled to
receive, without payment therefor:
(i) other or additional stock or other securities or
property (other than cash) by way of dividend, or
(ii) any cash paid or payable (including, without
limitation, by way of dividend), or
(iii) other or additional stock or other securities or
property (including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
then, and in each such case the Holder of this Warrant, upon the exercise hereof
as provided in Section 3, shall be entitled to receive the amount of stock and
other securities and property
24
(including cash in the cases referred to in subdivisions (ii) and (iii) of this
Section 5(a)) which such Holder would hold on the date of such exercise if on
the Original Issue Date such Holder had been the Holder of record of the number
of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the Original Issue Date to and including the
date of such exercise, retained such shares and all such other or additional
stock and other securities and property (including cash in the cases referred to
in subdivisions (ii) and (iii) of this Section 5(a)) receivable by such Holder
as aforesaid during such period, giving effect to all adjustments called for
during such period by Sections 6 and 7 hereof.
(b) The Dilution Price shall be equitably adjusted
from time to time in the event of a reverse stock split or similar combination
or reclassification of shares or a merger or similar reorganization (as
described in Section 6 below) as the Board of Directors, in good faith,
determines to be reasonably necessary.
6. Reorganization, Consolidation, Merger, etc. In case the
Company after the Original Issue Date shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the Holder of this Warrant, upon the exercise hereof as provided in
Section 3 at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall be entitled to receive (and the Company shall be entitled to
deliver), in lieu of the Underlying Securities issuable upon such exercise prior
to such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant immediately prior thereto, all subject
to further adjustment thereafter as provided in Sections 5 and 7 hereof. The
Company shall not effect any such reorganization, consolidation, merger or sale,
unless prior to or simultaneously with the consummation thereof, the successor
corporation resulting from such consolidation or merger or the corporation
purchasing such assets or the appropriate corporation or entity shall assume, by
written instrument, the obligation to deliver to each Holder the shares of
stock, cash, other securities or assets to which, in accordance with the
foregoing provisions, each Holder may be entitled to and all other obligations
of the Company under this Warrant. In any such case, if necessary, the
provisions set forth in this Section 6 with respect to the rights thereafter of
the Holders shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any Other Securities or assets thereafter deliverable on
the exercise of the Warrants.
7. Other Adjustments.
7.1. General. In any case to which Sections 5 and 6 hereof
are not applicable, where the Company shall issue or sell shares of its Common
Stock after the Original Issue Date for a consideration per share less than the
Dilution Price in effect pursuant to the terms of this Warrant at the time of
issuance or sale of such additional shares (the "Lower Price"), then the
Purchase Price per share in effect hereunder shall simultaneously with such
issuance or sale be reduced to a price determined by multiplying the Purchase
Price per share by the quotient of (1) an amount equal to (a) the total number
of shares of Common Stock outstanding immediately prior to such issuance or sale
multiplied by the Purchase Price per share in effect hereunder immediately prior
to such issuance or sale, plus (b) the consideration, if any, received by the
Company upon such issuance or sale, divided by (2) the total number of shares of
Common Stock outstanding immediately after issuance or sale of such additional
shares multiplied by the Purchase Price per share
25
in effect immediately prior to such issuance or sale. The number of shares of
Common Stock which may be purchased upon exercise of this Warrant shall be
increased so that the aggregate amount to be paid upon full exercise of this
Warrant, after giving effect to each reduction in the Purchase Price per share,
shall not be reduced.
7.2. Convertible Securities. (a) In case the Company shall
issue or sell any securities convertible into Common Stock of the Company
("Convertible Securities") after the date hereof, there shall be determined the
price per share for which Common Stock is issuable upon the conversion or
exchange thereof, such determination to be made by dividing (i) the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the then current aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (ii) the maximum number of shares of Common Stock of the
Company issuable upon the conversion or exchange of all of such Convertible
Securities.
(b) If the price per share so determined shall be
less than the applicable Purchase Price per share, then such issue or sale shall
be deemed to be an issue or sale for cash (as of the date of issue or sale of
such Convertible Securities) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases or decrease or
decreases, with the passage of time, in the amount of additional consideration,
if any, to the Company, or in the rate of exchange, upon the conversion or
exchange thereof, the adjusted Purchase Price per share shall, forthwith upon
any such increase or decrease becoming effective, be readjusted to reflect the
same, and provided further, that upon the expiration of such rights of
conversion or exchange of such Convertible Securities, if any thereof shall not
have been exercised, the adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of Common Stock so issued
or sold were issued or sold upon the conversion or exchange of such Convertible
Securities, and that they were issued or sold for the consideration actually
received by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the issue or sale of
all of such Convertible Securities which shall have been converted or exchanged.
7.3. Rights and Options. (a) In case the Company shall
grant any rights or options to subscribe for, purchase or otherwise acquire
Common Stock, there shall be determined the price per share for which Common
Stock is issuable upon the exercise of such rights or options, such
determination to be made by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options, plus the then current aggregate amount of additional consideration
payable to the Company upon the exercise of such rights or options, by (ii) the
maximum number of shares of Common Stock of the Company issuable upon the
exercise of such rights or options.
(b) If the price per share so determined shall be
less than the applicable Purchase Price per share, then the granting of such
rights or options shall be deemed
26
to be an issue or sale for cash (as of the date of the granting of such rights
or options) of such maximum number of shares of Common Stock at the price per
share so determined, provided that, if such rights or options shall by their
terms provide for an increase or increases or decrease or decreases, with the
passage of time, in the amount of additional consideration payable to the
Company upon the exercise thereof, the adjusted Purchase Price per share shall,
forthwith upon any such increase or decrease becoming effective, be readjusted
to reflect the same, and provided, further, that upon the expiration of such
rights or options, if any thereof shall not have been exercised, the adjusted
Purchase Price per share shall forthwith be readjusted and thereafter be the
price which it would have been had an adjustment been made on the basis that the
only shares of Common Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or sold for the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of all
such rights or options, whether or not exercised.
7.4. Combination of Shares. If the number of shares of
Common Stock outstanding at any time after the date hereof is decreased by a
combination or reverse stock split of the outstanding shares of Common Stock of
the Company, the Dilution Price and the Purchase Price per share shall be
increased, and the number of shares of Common Stock purchasable under this
Warrant shall be decreased in proportion to such decrease in outstanding shares
of Common Stock.
7.5. Exceptions. This Section 7 shall not apply to (a) the
issuance of the Units and up to 281,900 additional units of Common Stock and
warrants of like tenor, (b) the issuance of shares of Common Stock upon the
exercise of the Warrants and other warrants referred to in clause (a), (c)
issuances of Common Stock to a Strategic Partner at a price per share of Common
Stock (as determined in Sections 7.1, 7.2 or 7.3) at a discount to the Market
Price not exceeding 15%, (e) issuances of Common Stock pursuant to the exercise
of options, warrants and rights outstanding on the date hereof or issued
pursuant to the Company's existing stock option plan or additional stock option
plans approved by a majority of the outstanding Common Stock present at the
meeting or represented by proxy and entitled to vote or (f) the issuance of
warrants to a lender pursuant to a loan to the Company with a term of at least
four years and in an amount of not less than $10,000,000 (and the issuance of
shares of Common Stock on the exercise of such lender warrants).
7.6. Other Securities. If any event occurs as to which the
provisions of this Warrant are strictly applicable and the application thereof
would not fairly protect the rights of the Holders in accordance with the
essential intent and principles of such provisions, then the Company shall make
such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as the Board of Directors, in good faith,
determines to be reasonably necessary to protect such rights as aforesaid. In
case at any time or from time to time Company shall take any action in respect
of its Common Stock, other than any action described in Sections 5, 6 and 7,
then, unless such action will not have a materially adverse effect upon the
rights of the Holders, the number of shares of Common Stock or other stock for
which this Warrant is exercisable and the Purchase Price per share shall be
adjusted in such manner as the Board of Directors, in good faith, determines to
be equitable in the circumstances. In furtherance and not in limitation of the
foregoing, if any event occurs of the type contemplated by Section 7 but not
expressly provided for by such Section (including, without limitation, the
granting of
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stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors shall make an appropriate
adjustment in the Purchase Price per share and the number of shares of Common
Stock or Other Securities issuable upon the exercise of a Warrant so as to
protect the rights of the Holders of such Warrants. No adjustment made pursuant
to this Section 7.6 shall increase the Purchase Price per share or decrease the
number of shares of Common Stock or Other Securities issuable upon exercise of
the Warrants.
7.7 Actions Requiring Shareholder Approval. Notwithstanding
anything to the contrary in this Common Stock Purchase Warrant, the Company
shall not engage in any transaction covered by this Section 7 which will cause
or be deemed to result in an adjustment of the Exercise Price to an amount less
than the market closing price of the Common Stock of the Company on the Original
Issue Date, unless and until the Company shall have sought and obtained the
approval of the shareholders of the Company (pursuant to a proxy solicitation
conforming to SEC proxy rules) of the original issuance of Shares of Common
Stock and Warrants under the Subscription Agreement for Common Stock and
Warrants dated as of October 26, 2000 by and between the Company, Xxxx Xxxxx
Investment Partners, L.P., Xxxx Xxxxx Investments, Ltd, and other investors
executing the same, and all the Warrants issued hereunder.
8. Further Assurances. The Company will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable shares of stock upon the exercise of
all Warrants from time to time outstanding.
9. Accountants' Certificate as to Adjustments. In each case of
any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable upon the exercise of the Warrants, the Company at its
expense will promptly cause the Company's regularly retained auditor to compute
such adjustment or readjustment in accordance with the terms of the Warrants and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and the
number of shares of Common Stock outstanding or deemed to be outstanding. The
Company will forthwith mail a copy of each such certificate to each Holder.
10. Notices of Record Date, etc. In the event of any taking by
the Company of a record of its shareholders for the purpose of determining the
shareholders thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, or for the purpose of determining shareholders who are entitled
to vote in connection with any proposed capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to each
Holder of a Warrant written notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or
vote of the shareholders, and (ii) the amount and character of such dividend,
distribution or right and, in reasonable detail, the matter requiring any such
vote of the shareholders. Such notice shall be mailed on the earlier of the date
notice thereof is mailed to shareholders of the Company and 10 days prior to the
date therein specified.
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11. Reservation of Stock, etc., Issuable on Exercise of Warrants.
The Company will at all times reserve and keep available, solely for issuance
and delivery upon the exercise of the Warrants, all shares of Common Stock (or
Other Securities) from time to time issuable upon the exercise of the Warrants.
12. Listing on Securities Exchanges; Registration. In furtherance
and not in limitation of any other provision of this Warrant, if the Company at
any time shall list any Common Stock on any national securities exchange and
shall register such Common Stock under the Exchange Act, the Company will, at
its expense, simultaneously list on such exchange or Nasdaq, upon official
notice of issuance upon the exercise of the Warrants, and maintain such listing
of all shares of Common Stock from time to time issuable upon the exercise of
the Warrants; and the Company will so list on any national securities exchange
or Nasdaq, will so register and will maintain such listing of, any Other
Securities if and at the time that any securities of like class or similar type
shall be listed on such national securities exchange or Nasdaq by the Company.
13. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of any Warrant, properly endorsed, to the
Company, as soon as practicable (and in any event within three business days)
the Company at its own expense will issue and deliver to or upon the order of
the Holder thereof a new Warrant or Warrants of like tenor, in the name of such
Holder or, subject to the restrictions on transfer set forth in Section 21
below, as such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
or Warrants so surrendered.
14. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
15. Warrant Agent. The Company may, by written notice to each
Holder of a Warrant, appoint an agent having an office in New York, New York,
for the purpose of issuing Common Stock (or Other Securities) upon the exercise
of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section
13, and replacing Warrants pursuant to Section 14, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
16. Remedies. The Company stipulates that the remedies at law of
the Holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
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17. Negotiability, etc. Subject to Section 2 above, this Warrant
is issued upon the following terms, to all of which each Holder or owner hereof
by the taking hereof consents and agrees:
(a) subject to the provisions hereof, title to this
Warrant may be transferred by endorsement (by the Holder hereof executing
the form of assignment at the end hereof) and delivery in the same manner
as in the case of a negotiable instrument transferable by endorsement and
delivery;
(b) subject to the foregoing, any person in
possession of this Warrant properly endorsed is authorized to represent
himself as absolute owner hereof and is empowered to transfer absolute
title hereto by endorsement and delivery hereof to a bona fide purchaser
hereof for value; each prior taker or owner waives and renounces all of his
equities or rights in this Warrant in favor of each such bona fide
purchaser and each such bona fide purchaser shall acquire absolute title
hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books
of the Company, the Company may treat the registered Holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
18. Notices, etc. All notices and other communications from the
Company to the Holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such Holder, or, until an address is so furnished,
to and at the address of the last Holder of this Warrant who has so furnished an
address to the Company.
19. Miscellaneous. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Warrant is being delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
20. Extended Expiration. The right to exercise this Warrant shall
expire at 5:00 P.M., New York City time, on the Expiration Date, provided,
however, that if the Holders of Warrants issued hereunder have, in accordance
with the terms thereof, requested a registration statement pursuant to the
Registration Rights Agreement 90 days or more prior to the Expiration Date and
such registration statement has not become effective prior to the Expiration
Date then the right to exercise this Warrant shall be extended and shall expire
30 days after the effective date of such registration statement.
21. Assignability; Transfer Restrictions. (a) Subject to Section
2 and 21(b) hereof, this Warrant is fully assignable at any time.
(b) Each Holder hereby agrees not to sell, assign or
otherwise transfer (hereinafter, a "Transfer") any Warrants or Underlying
Securities to any Competitor or Person
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(or group of Persons) who have filed and not withdrawn a Schedule 13D indicating
a plan to seek control of the Company (such Competitor or other Person or group
of Persons being hereinafter referred to as a "Non-Qualified Person"); provided
that the foregoing shall not apply to Transfers (i) to affiliates, family
members or trusts for the benefit of family members so long as such transferee
is not a Non-Qualified Person, (ii) to the public pursuant to a registration
statement under an underwriting agreement or otherwise, provided that such
Holder shall not make such a Transfer knowingly to a Non-Qualified Person; (iii)
pursuant to Rule 144 under the Act in brokers' transactions or transactions with
market makers (as defined in Rule 144) or (iv) in connection with a sale of more
than 50% of the shares of the Company. As used herein, "Competitor" shall mean
any Person who is (i) directly or indirectly engaged in any business which the
Company determines, in good faith, to be competing with any business of the
Company (provided that the passive investment by a financial investor of (x) ten
percent (10%) or less of any class of equity securities of any Person, on a
fully diluted basis, shall not be determined to be a competing interest for
purposes of this clause (i)) or (ii) an affiliate (as defined in Rule 144) of
any Person described in clause (i). For purposes of this definition, a financial
investor shall have made a "passive investment" in another Person if such
financial investor does not (x) actively manage the business or affairs of such
Person, (y) have the right to nominate or appoint one or more directors to the
board of directors of such Person or (z) have a board observation right with
respect to meetings of the board of directors of such Person. As used herein,
"Person" shall mean any individual, sole proprietorship, partnership,
corporation,
31
limited liability company, business trust, unincorporated association, joint
stock corporation, trust, joint venture or other entity, any university or
similar institution, or any government or any agency or instrumentality or
political subdivision thereof.
Dated: October 26, 2000
MERRIMAC INDUSTRIES, INC.
By:_________________________________________
Xxxxxx X. Xxxxxx, Vice President, Finance
and Chief Financial Officer
[Corporate Seal]
Attest:___________________________
________________, Secretary
32
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: MERRIMAC INDUSTRIES, INC.
The undersigned, the Holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, shares of Common Stock of Merrimac Industries,
Inc., and herewith makes payment of $ ____* therefor [or delivers
_______________ Warrants or _______ shares of _______ stock], and requests that
the certificates for such shares be issued in the name of, and delivered to,
__________ __________, whose address is _____________________________.
Dated:
_________________________________________________________
(Signature must conform in all respects to name of Holder
as specified on the face of the Warrant)
(Address)
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrnat is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant, may be deliverable upon exercise.
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FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto _________________________ the right represented by the within
Warrant to purchase _________ of Common Stock of Merrimac Industries, Inc. to
which the within Warrant relates, and appoints ______________________________
Attorney to transfer such right on the books of Merrimac Industries, Inc. with
full power of substitution in the premises. The Warrant being transferred hereby
is one of the Warrants issued by Merrimac Industries, Inc. as of October 26,
2000 to purchase an aggregate of up to [_____] shares of Common Stock.
Dated:
_________________________________________________________
(Signature must conform in all respects to name of Holder
as specified on the face of the Warrant)
(Address)
Signature guaranteed by a Bank
or Trust Company having its
principal office in New York City
or by a Member Firm of the New
York or American Stock Exchange
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