Exhibit 10(l)
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement")
dated as of July 29, 2002 by XXXXX X. XXXXXX ("Pledgor"), for the benefit of
MERRIMAC INDUSTRIES, INC., a Delaware corporation ("Holder"),
W I T N E S S E T H :
WHEREAS, Pledgor owns 33,000 shares of common stock, par value
$.01 per share, of Holder (the "Pledged
Shares"); and
WHEREAS, Pledgor is executing and delivering to Holder, and
Holder is accepting, an amended and restated promissory note dated July 29, 2002
(the "Promissory Note") in the total principal amount of Four Hundred Thousand
Dollars (US $400,000), bearing interest as set forth in the Promissory Note
(such principal and interest being hereinafter referred to as the "Note
Amount"), with interest and principal payments due and payable on the dates set
forth in the Promissory Note (each, a "Due Date").
NOW, THEREFORE, in consideration of the premises, and in order
to induce Holder to accept the Promissory Note, Pledgor does hereby agree as
follows:
SECTION 1. Pledge. Pledgor hereby irrevocably and
unconditionally pledges to Holder, and grants to Holder a security interest in,
the following (the "Pledged Collateral"):
(i) the Pledged Shares and the certificates representing the
Pledged Shares and all dividends from time to time received, receivable
or otherwise distributed in respect of any or all of the Pledged Shares
subject to Section 6(c); and
(ii) to the extent not covered above, all proceeds of any or
all of the foregoing Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement secures
the obligations of Pledgor to pay to Holder the applicable portions of the Note
Amount on or before each Due Date in accordance with the Promissory Note and all
obligations of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor being the "Obligations").
SECTION 3. Delivery of Pledged Collateral. Pledgor shall take
all necessary actions to ensure that all certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of Holder pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed, notarized
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Holder. Holder shall have the right, effective immediately upon
failure by Pledgor to pay the applicable portion of the Note Amount on the
respective Due Date, in its discretion and without notice to Pledgor, to
transfer to or to register in the name of Holder or any of its nominees any or
all of the Pledged Collateral. In addition, Holder shall have the right at any
time to exchange certificates or instruments representing or evidencing the
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 4. Representations and Warranties. Pledgor represents
and warrants as follows:
(a) The pledge of the Pledged Collateral pursuant to this
Agreement and delivery of certificates for the Pledged Shares creates a
valid and perfected first priority security interest in the Pledged
Collateral, securing the Obligations.
(b) No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required either (i) for the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by Pledgor or (ii) for the exercise by
Holder of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this
Agreement. The execution, delivery and performance of this Agreement do
not contravene any legal or contractual restriction binding on or
affecting Pledgor or the Pledged Collateral.
(c) This Agreement has been duly executed and delivered by
Pledgor and constitutes the legal, valid and binding obligation of
Pledgor, enforceable against Pledgor in accordance with its terms,
subject to the qualification, however, that the enforcement of the
rights and remedies herein is subject to bankruptcy and other similar
laws of general application affecting
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rights and remedies of creditors and that the remedy of specific
performance or of injunctive relief is subject to the discretion of the
court before which any proceedings therefor may be brought.
SECTION 5. Further Assurances. Pledgor agrees that at any time
and from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that Holder may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable Holder to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 6. Voting Rights, Dividends, etc.
(a) Unless Pledgor has failed to pay the applicable portion of the Note Amount
on or before the respective Due Date or has failed to perform any of the other
Obligations:
(i) Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with this Agreement;
provided, however, that Pledgor shall not exercise or refrain from
exercising any such right if, in Holder's judgment, such action would
have an adverse effect on the value of the Pledged Collateral or any
part thereof or would be inconsistent with or violate any provisions of
this Agreement; and, provided, further, that Pledgor shall give Holder
at least two days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such
right.
(ii) Holder shall exercise and deliver (or cause to be executed
or delivered) to Pledgor all such proxies and other instruments as
Pledgor may reasonably request for the purpose of enabling Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above.
(b) Upon the failure of Pledgor to pay the applicable portion
of the Note Amount on the respective Due Date or the failure of Pledgor to
perform any of the other Obligations, all rights of Pledgor to exercise the
voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) shall become vested in Holder who shall
thereupon have the sole right to exercise such voting and other consensual
rights.
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(c) Pledgor shall not be entitled to receive and retain
dividends, distributions or any other payments in respect of the Pledged
Collateral, all of which shall be and become part of the Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the benefit of
Holder, shall be segregated from other funds of Pledgor and shall be forthwith
paid over by Pledgor to Holder as Pledged Collateral in the same form as so
received (with any necessary endorsement). Notwithstanding the foregoing, cash
dividends in respect of the Pledged Shares shall be immediately paid by Pledgor
to Holder and applied in accordance with the terms of the Promissory Note;
provided, that the excess of any such cash dividends over the amount of interest
then due under the Promissory Note shall be paid to Pledgor.
SECTION 7. Transfers and Other Liens. Without concurrently
satisfying all the Obligations, Pledgor agrees that it will not (a) sell or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, or (b) create or permit to exist any lien, security interest, or
other charge or encumbrance upon or with respect to any of the Pledged
Collateral except for the security interest under this Agreement.
SECTION 8. Holder Appointed Attorney-in-Fact. Pledgor hereby
appoints Holder as Pledgor's attorney-in-fact, with full authority in the place
and stead of Pledgor and in the name of Pledgor or otherwise, and with full
power of substitution, from time to time to take any action and to execute any
instrument which Holder may deem necessary or advisable to give effect to this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend, distribution or
other payment in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.
SECTION 9. Holder May Perform. If Pledgor fails to perform any
agreement contained herein, Holder may itself perform, or cause performance of,
such agreement and the expenses of Holder incurred in connection therewith shall
be payable by Pledgor under Section 11.
Holder shall have no responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, tenders or other
matters relative to any Pledged Collateral, whether or not Holder has or is
deemed to have knowledge of such matters, or (ii) taking any
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necessary steps to preserve rights against any parties with respect to
any Pledged Collateral.
SECTION 10. Remedies upon Failure to Pay the Note Amount on a
Due Date. If the applicable portion of the Note Amount has not been paid on or
before the respective Due Date or if Pledgor shall have failed to perform any of
the other Obligations:
(a) Holder may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code in effect at that
time, and Holder may also, without notice except as specified below,
sell the Pledged Collateral at public or private sale, at any exchange,
broker's board or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Holder may deem commercially
reasonable. Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Pledgor of the time and
place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Holder shall not be
obligated to make any sale of Pledged Collateral regardless of notice
of sale having been given. Holder may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) Pledgor acknowledges that Holder may be unable to effect a
public sale of some or all the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities laws, and may be
compelled to resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account for
investment and not with a view to the distribution and resale thereof.
Pledgor acknowledges and agrees that any such private sale may result
in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a
commercially reasonable manner. Holder shall be
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under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if the
issuer would agree to do so.
(c) Any cash held by Holder as Pledged Collateral and all cash
proceeds received by Holder in respect of any sale of, collection from,
or other realization upon all or any part of the Pledged Collateral
may, in the discretion of Holder, be held by Holder as collateral for,
and/or then or at any time thereafter applied (after payment of any
amounts payable to Holder pursuant to Section 11) in whole or in part
by Holder to the payment of the Note Amount. Any surplus of such cash
or cash proceeds held by Holder and remaining after payment in full of
the Note Amount shall be paid over to Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 11. Expenses. Pledgor shall indemnify and hold
harmless Holder from and against all claims, damages, liabilities and expenses,
and will upon demand pay to Holder the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which Holder may incur in connection with (i) the
administration or enforcement of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (iii) the exercise or enforcement of any of the
rights of Holder hereunder, or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 12. (a) Addresses for Notices. All notices and other
communications provided for hereunder shall be made by either party in the
following manner:
If to Holder as follows:
Merrimac Industries, Inc.
00 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Chief Financial Officer
If to Pledgor as follows:
Xx. Xxxxx X. Xxxxxx
c/o Merrimac Industries, Inc.
00 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000-0000
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(b) Assignment. Pledgor shall not assign this Agreement or any
of his obligations hereunder without the prior written consent of Holder.
SECTION 13. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i)
remain in full force and effect until payment in full of the Note Amount and any
amounts required under Section 11, (ii) be binding upon Pledgor and his
permitted assigns and (iii) inure, together with the rights and remedies of
Holder hereunder, to the benefit of Holder and its successors, transferees and
assigns.
SECTION 14. Security Interest Absolute. All rights of Holder
and security interests hereunder, and all obligations of Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Promissory
Note or any other agreement or instrument relating thereto; or
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Note Amount; or any other
amendment or waiver of or any consent to any departure from the
Promissory Note or any other agreement or instrument relating thereto;
or
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Note Amount; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a surety, a guarantor or a
third party pledgor.
SECTION 15. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of New
Jersey without giving effect to any conflicts of laws provisions of such State.
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SECTION 16. Waiver. No failure or delay on the part of Holder
in exercising any right, power or privilege under this Agreement and no course
of dealing between Pledgor and Holder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further notice or demand in similar or other circumstances
or constitute a waiver of the right of Holder to any other or further action in
any circumstances without notice or demand.
SECTION 17. Descriptive Headings. The descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, Pledgor has executed this Agreement as of
the date first above written.
/s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
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