<PAGE>
The following items were the subject
of a Form 12b-25 and are included
herein: Item 6, Item 7 and
consolidated revenues of the issuer
set forth on the cover page.
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB/A-1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended June 30, 1996
----------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from to
--------------- -------------------
Commission file number 0-14068
--------------------------------------------------
MEMRY CORPORATION
-----------------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 06-1084424
- ---------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
57 Commerce Drive, Brookfield, CT 06804
- --------------------------------- --------------
(Zip Code)
(Address of principal executive offices)
Issuer's telephone number (203) 740-7311
----------------------------------------
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None None
- -------------------------------- -----------------------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.01 per share
-----------------------------------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
---- --
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
<PAGE>
Consolidated revenues of the issuer for the fiscal year ended June 30, 1996 were
$3,674,000.
The aggregate market value of voting stock held by non-affiliates of the
registrant was approximately $14,310,000 on June 28, 1996 based upon the
average of the bid and asked prices on that date.
The number of shares of Common Stock outstanding as of June 30, 1996:
12,977,854. All references to numbers of shares of Common Stock contained
herein with respect to periods prior to August 8, 1994 give effect to the one-
for-ten reverse stock split of the Company's Common Stock (the "Reverse Split")
effected on August 8, 1994.
Documents Incorporated by Reference. Memry Corporation's 1996 Proxy Statement
- -----------------------------------
to be filed with the Commission within 120 days after June 30, 1996, is
incorporated by reference in Part III of this Form 10-KSB.
Transitional Small Business Disclosure Format
---------------------------------------------
Yes NO X
---- -----
<PAGE>
This amendment to the Annual Report on Form 10-KSB of Memry
Corporation (the "Company") for the fiscal year ended June 30, 1996 (the
"Original Form 10-KSB") amends and modifies the Original Form 10-KSB as follows:
1. The cover page is amended by the inclusion of the consolidated
revenues of the Company for the fiscal year ended June 30, 1996.
2. Item 6 of Part II, "Management's Discussion and Analysis or Plan of
Operation," is filed hereby.
3. Item 7 of Part II, "Financial Statements," is filed hereby.
4. Certain typographical errors in Paragraph (b) of Item 13 are corrected
hereby.
5. Exhibits 10.49, 10.50. 10.51. 10.52, 10.53 and 11 are filed hereby and
Exhibit 27 is submitted hereby.
3
<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Results of Operations
REVENUES.
- --------
Sales Overview. Overall revenues decreased 22%, from $4,729,000 in fiscal 1995
- --------------
to $3,674,000 in fiscal 1996, or a $1,055,000 reduction in sales. Revenues
relating to the Wright Segment were responsible for all of the decrease, and
were partially offset by a slight increase in Memry Segment sales.
Memry Sales. Revenues relating to the Memry Segment increased to $1,136,000 in
fiscal 1996 from $1,013,000 in fiscal 1995, an increase of $123,000, or 12%.
Sales of the MEMRYSAFE(R) and ULTRAVALVE/TM/ product lines were $286,000 in
fiscal 1996 as compared with $462,000 in fiscal 1995. Sales of SMA, shape
memory effect wire and wire shapes, shape memory polymers and FIRECHECK/TM/ were
approximately $371,000 in fiscal 1996 as compared with $186,000 in fiscal 1995.
Research and development revenues in fiscal 1996 increased $114,000, or 31%, to
$479,000, as compared to revenues of $365,000 in fiscal 1995. The increase in
research and development revenues is due to the McDonnell Douglas contract work
which began in the third quarter of fiscal 1996. The backlog of government-
sponsored contracts is approximately $502,000, in addition to back-log of
approximately $205,000 from a contract with McDonnell Douglas.
Wright Sales. Wright Machine Segment sales decreased $1,178,000, or 31%, to
$2,538,000 in fiscal 1996 versus $3,716,000 in 1994, as a result of continued
liquidity constraints which interfered with the ability of Wright to make raw
material purchases. Wright's inability from time to time to obtain raw
materials impacted on its ability to both attract and perform orders. The
contract backlog decreased to approximately $650,000 at June 30, 1996 as
compared with $1,200,000 at June 30, 1995.
COSTS AND EXPENSES
- ------------------
Manufacturing Costs Overview. Manufacturing costs for fiscal 1996 decreased to
- ----------------------------
$2,915,000 in fiscal 1996 from $3,850,000 in fiscal 1995, a decrease of
$935,000, or 24%. The decrease was almost entirely due to the reduction in
gross revenues. The overall gross profit margin in fiscal 1996 was 9%, as
compared to 12% in 1995. The decrease in gross margin was primarily caused by
the decrease in the Wright Segment's profit margin described below.
Memry Manufacturing Costs. Memry Segment manufacturing costs were $569,000 in
fiscal 1996 and $612,000 in fiscal 1995, a decrease of $43,000, or 7%, with
margins of 16% and 13%, respectively. The increase in the Memry Segment's
margin is attributable to the increase in sales of the higher margin shape
memory effect wire.
Wright Manufacturing Costs. Wright Machine Segment's manufacturing costs for
fiscal 1996 were $2,346,000 as compared with $3,238,000 in fiscal 1995. The
reduction of $892,000 in costs, or 28%, is primarily
4
<PAGE>
due to the 31% reduction in sales. Wright's profit margin declined to 8% in
fiscal 1996 versus 14% in fiscal 1995 attributable to the increase in the ratio
of fixed costs to sales volume caused by the reduction in sales volume.
Research and Development Costs. Research and development costs were $422,000 in
fiscal 1996 and $297,000 in fiscal 1995. This increase of $125,000, or 42%, was
primarily due to the 31% increase in research and development revenues.
General, Selling, and Administrative Expense ("GS&A"). Overall GS&A was reduced
- -----------------------------------------------------
in fiscal 1996 by $272,000, or 11%, to $2,102,000 from $2,374,000 in fiscal
1995. The reduction is primarily due to a decrease in litigation expense and
professional fees.
Depreciation and Amortization Expense. Depreciation expense was $90,000 in
- -------------------------------------
fiscal 1996 as compared with $240,000 in fiscal 1995. The $150,000, or 63%,
decrease was caused by certain assets becoming fully depreciated during the last
quarter of fiscal 1995.
Interest Expense. Interest expense decreased to $250,000 in fiscal 1996 from
- ----------------
$360,000 in fiscal 1995, a decrease of 31%. The decrease is primarily due to
approximately $711,000 of payments on Wright's debt to Fleet Bank during fiscal
1996, which debt accrued interest at a rate of prime plus 4%.
NET LOSS
- --------
Overview. Net loss for fiscal 1996 was $2,105,000, as compared to a loss of
- --------
$2,392,000 in fiscal 1995, an improvement of $287,000, or 12%. The improvement
was caused by a $532,000 aggregate reduction in GS&A, interest and amortization
and depreciation expenses, offset by a reduction in gross profit of $245,000.
Memry Segment. Memry Segment's net loss for fiscal 1996 was $1,718,000 as
compared with fiscal 1995's loss of $1,981,000. The improvement of $263,000, or
13%, is the result of a reduction in GS&A, depreciation and amortization and
interest expenses of $220,000 and an improvement in gross profit of $45,000.
Wright Segment. Wright Machine Segment's net loss was relatively flat in fiscal
1996 at $387,000 as compared to $411,000 in fiscal 1995. Wright's $24,000
improvement is the result of a reduction in GS&A, depreciation and amortization
and interest expenses of $494,000 offset by a reduction of $472,000 in gross
profit.
In November 1992, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 112 "Accounting for Postemployment Benefits,"
which was required to be implemented by the Company in fiscal 1995. Because the
Company generally does not provide such benefits, the adoption of this statement
did not have a material effect on the Company's financial position.
5
<PAGE>
(b) Liquidity and Capital Resources
The Company's primary capital requirements to date have been to fund losses from
operations. In addition, from time to time the Company has required capital to
effect acquisitions and to fund increases in inventory for certain products
necessary to allow the Company to increase sales for those products. The
Company has historically satisfied its capital requirements from sales of equity
securities and borrowings. During fiscal 1996, net cash used by operating
activities was approximately $2.4 million, net cash used for acquisitions
(primarily the Raychem Acqusition) was approximately $4.1 million and net cash
provided by financing activities (which included a reduction in borrowings of
approximately $700,000) was approximately $5.4 million. As a result of the
foregoing, the Company held cash and cash equivalents at June 30, 1996 of
approximately $57,000, down from approximately $1.1 million at the start of
fiscal 1996. As a result, at the close of fiscal 1996 the Company was in a cash
impaired position and had negative working capital (current liabilities less
current assets) of approximately $900,000(down from negative working capital of
approximately $2.3 million on June 30, 1995).
Subsequent to the close of the Company's 1996 fiscal year, on August 9, 1996,
the Company entered into a term and revolving loan agreement with Affiliated
Business Credit Corporation ("ABCC"), a commercial financing subsidiary of
Center Financial Corporation, allowing up to $2.635 million of aggregate
borrowings. The term loan is a five year $1.135 million loan, with principal
payable in monthly installments of approximately $19,000. An additional $135,000
of principal is due (i) on or prior to December 31, 1996 if, prior to December
31, 1996, the Company raises additional equity (excluding equity raised to
purchase intellectual property, medical patents and other assets related thereto
from Raychem), and (ii) on or before June 30, 1997 if the Company does not raise
such additional equity prior to December 31, 1996. The entire unpaid balance, if
not earlier demanded, is due and payable on July 31, 2001; provided, however,
that ABCC has the right to accelerate the loan and require full payment upon
demand. Interest on the term loan accrues at the rate of prime plus 2.25%. The
revolving credit facility provides for borrowings at the lesser of $1.5 million
or the sum of (a) 80% of eligible accounts receivable plus (b) the lesser of
$500,000 or 25% of eligible inventory. Borrowings pursuant to the revolving loan
agreement are due upon demand and bear interest, payable monthly, at prime plus
2%. The terms with ABCC generally are more favorable than the terms that the
Company's Wright subsidiary had with Fleet Bank, the Company's prior lender. The
loan documents contain standard covenants, including security interests in
substantially all of the Company's consolidated assets, commitment fees and
negative covenants (including restrictions on dividends and other payments),
which the Company does not expect to materially impact operations. At the August
9, 1996 closing, Wright's debt to Fleet Bank was repaid with a $140,000, or 16%,
discount.
The Company's only currently contemplated material capital expenditure for
fiscal 1997 is the move of the medical assemblies portion of the business
purchased from Raychem from Menlo Park, California to the Company's headquarters
in Brookfield, Connecticut, in the second quarter of fiscal 1997. The Company
anticipates that the cost of such move will be slightly greater than $100,000.
In addition, the Company anticipates making substantial improvements to certain
machinery and equipment located at Memry West and used to manufacture tinel-lock
product for
6
<PAGE>
Raychem. However, as a result of an agreement entered into at the time of the
Raychem Acquisition, it is anticipated that Raychem will bear substantially all
the costs of such improvements.
The Company has in the past grown through acquisitions (including both the
Raychem Acquisition and the Company's earlier acquisition of Wright) and, as
part of its continuing growth strategy, the Company expects to continue to
evaluate and pursue opportunities to acquire other companies, assets and product
lines that either complement or expand the Company's existing businesses. The
Company intends to use available cash from operations, when and if available,
and sales of equity to finance any such acquisitions that may be sought in the
future.
In connection with a December 1994 subordinated debt financing, the Company
granted Connecticut Innovations Incorporated ("CII"), currently the holder of
both common stock and warrants of the Company, a "put" right if: (i) at any
time before the earlier of June 28, 2006 and the date on which CII ceases to
hold at least 35% of the common stock underlying the convertible securities
originally issued to it, the Company ceases to (a) maintain its corporate
headquarters and all of its product business operations in the State of
Connecticut (including, after January 1, 1997, the assembly of all products to
be sold to U.S. Surgical Corporation, most of which are currently being
manufactured at Memry West), excluding business operations relating to Wright's
production of screw machine products and taper pins and the Company's components
and sub-assembly business acquired from Raychem, (b) base its president and
chief executive officer, a majority of its senior executives, and all of its
administrative, financial, research and development, marketing and customer
service staff relating to its product business (subject to the same inclusions
and exclusions as clause (a)) in the State of Connecticut, (c) conduct all of
its operations relating to its product business directly or through
subcontractors and through licensed operations in the State of Connecticut
(subject to the same inclusions and exclusions as clause (a)), and (d) maintain
its principal bank accounts with banks located in the State of Connecticut,
excluding all banks associated with Wright; or (ii) the Company fails (a) to
file by October 31, 1996 a registration statement under the Securities Act of
1933, as amended (the "Registration Statement"), covering, inter alia, the
----- ----
resale by CII of the shares of the Company's Common Stock owned by CII and
underlying warrants owned by CII (the "Registrable Securities") or to effect
such Registration Statement by January 31, 1997, or (b) to keep the Registration
Statement in effect for an aggregate of 120 days during any rolling twelve month
period during the three years which the Company is required to maintain the
effectiveness of the Registration Statement. Upon CII's exercise of its put,
the Company shall be obligated to purchase from CII all the Registrable
Securities then held by CII at a price equal to the greater of the then current
market price of the Company's common stock or $2.00 per share, less, in either
event, the aggregate amount of unpaid exercise prices of all warrants put to the
Company. Using $2.00 per share as the put price per share, the aggregate put
price that would have to be paid by the Company if the put were exercised would
be approximately $4,085,500. If CII were to have the right to put its
securities and were to choose to exercise that right, it would have a serious
adverse effect on the Company's liquidity
7
<PAGE>
and the Company would most likely have to seek equity financing to be able to
meet its obligations to CII. However, the Company believes that it has the
ability to insure that its operations do not move from Connecticut in a manner
that would trigger CII's put, and intends to cause the Registration Statement to
be filed and maintained in a manner that would prevent CII's put from being
operative.
The Company believes that the combination of its improved borrowing facility,
its ability to raise equity capital in the past and, as a result of the Raychem
Acquisition, revenues from Memry West will be sufficient to meet the Company's
capital requirements (assuming both that ABCC does not demand immediate
repayment of the term loan and that CII's put rights are not triggered and
exercised (and, as stated above, the Company intends not to cause said put
rights to become exercisable).
The Company does not expect that any of the matters discussed in Note 10 to the
Company's Consolidated Financial Statements will have a material impact on the
Company's financial condition, future operating results and/or liquidity.
8
<PAGE>
Item 7. FINANCIAL STATEMENTS
Index to Financial Statements
- -----------------------------
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS:
Consolidated Balance Sheets - F-2
As of June 30, 1996
Consolidated Statements of Operations - F-3
For years ended June 30, 1996 and 1995
Consolidated Statements of Stockholders' Equity F-4
For years ended June 30, 1996 and 1995
Consolidated Statements of Cash Flows - F-5
For years ended June 30, 1996 and 1995
Notes to Consolidated Financial Statements F-6
9
<PAGE>
McGladrey & Pullen, LLP
-----------------------
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors
Memry Corporation and Subsidiary
Brookfield, Connecticut
We have audited the accompanying consolidated balance sheets of Memry
Corporation and subsidiary as of June 30, 1996 and 1995, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Memry Corporation
and subsidiary as of June 30, 1996 and 1995, and the results of their operations
and their cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New Haven, Connecticut
September 24, 1996
F-1
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS (Note 8) 1996 1995
-----------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents (Note 5) $ 57,000 $ 1,145,000
Accounts receivable, less allowance for doubtful accounts 1996 $29,000;
1995 $53,000 568,000 691,000
Inventories (Note 3) 2,044,000 849,000
Prepaid expenses and other 63,000 24,000
-------------- -----------------
Total current assets 2,732,000 2,709,000
-------------- -----------------
Property, Plant and Equipment, at cost, net (Notes 4 and 9) 3,881,000 1,233,000
-------------- -----------------
Other Assets
Patents and patent rights, less accumulated amortization 1996 $60,000;
1995 $57,000 2,002,000 5,000
Goodwill 989,000 -
Deferred financing costs 36,000 -
Deposits 39,000 32,000
-------------- -----------------
3,066,000 37,000
-------------- -----------------
Total assets $ 9,679,000 $ 3,979,000
============== =================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses $ 1,733,000 $ 2,189,000
Notes payable (Note 8) 1,698,000 2,810,000
Unearned revenue (Note 2) 150,000 -
Current maturities of capital lease obligations (Note 9) 3,000 4,000
-------------- -----------------
Total current liabilities 3,584,000 5,003,000
-------------- -----------------
Capital Lease Obligations, less maturities (Note 9) 4,000 7,000
-------------- -----------------
Commitments and Contingencies (Notes 9 and 10)
Stockholders' Equity
Preferred stock (Note 6) 36,000 19,000
Common stock (Note 6) 130,000 80,000
Additional paid-in capital 39,034,000 29,874,000
Accumulated deficit (33,109,000) ( 31,004,000)
-------------- -----------------
Total stockholders' equity (deficit) 6,091,000 (1,031,000)
-------------- -----------------
Total liabilities and stockholders' equity $ 9,679,000 $ 3,979,000
============== =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Revenues
Product sales $ 3,195,000 $ 4,364,000
Research and Development revenues 479,000 365,000
------------ ------------
3,674,000 4,729,000
------------ ------------
Cost of Revenues
Manufacturing 2,915,000 3,850,000
Research and development 422,000 297,000
------------ ------------
3,337,000 4,147,000
------------ ------------
Gross profit 337,000 582,000
------------ ------------
Operating Expenses
General, selling and administrative (Note 9) 2,102,000 2,374,000
Depreciation and amortization 90,000 240,000
------------ ------------
2,192,000 2,614,000
------------ ------------
Operating loss (1,855,000) (2,032,000)
Interest Expense (Note 8) 250,000 360,000
Net loss $ (2,105,000) $ (2,392,000)
============ ============
Weighted average number of common shares outstanding 8,357,118 5,353,222
============ ============
Net loss per common share $ (0.25) $ (0.45)
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Preferred Stock Common Stock
------------------- --------------------
Additional
Shares Par Shares Par Paid-in Accumulated
Issued Value Issued Value Capital Deficit
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1994 854 $ 85,000 46,606,450 $ 46,000 $ 26,869,000 $ (28,612,000)
Reverse stock split - - (41,945,805) - - -
Issuance of common stock - - 1,384,926 15,000 1,106,000 -
Series A preferred stock converted (124) (12,000) 424,426 4,000 8,000 -
Series B preferred stock converted (250) (25,000) 312,500 3,000 22,000 -
Series F preferred stock converted (480) (48,000) 480,000 5,000 43,000 -
Conversion of Dividend on Series A & B - - 747,500 7,000 591,000 -
Series G preferred stock issued 193 19,000 - - 1,235,000 -
Net loss - - - - - (2,392,000)
-------- --------- ----------- --------- ------------ --------------
Balance, June 30, 1995 193 $ 19,000 8,009,997 $ 80,000 $ 29,874,000 $ (31,004,000)
Issuance of common stock - - 3,363,329 33,000 4,570,000 -
Series G preferred stock converted (127) (13,000) 1,269,000 13,000 - -
Series G preferred stock issued 231 23,000 - - 1,478,000 -
Conversion of debenture 67 7,000 285,528 3,000 753,000 -
Conversion of debt - - 50,000 1,000 49,000 -
Issuance of warrants - - - - 2,310,000 -
Net loss - - - - - (2,105,000)
-------- --------- ----------- --------- ------------ --------------
Balance as of June 30, 1996 364 $ 36,000 12,977,854 $ 130,000 $ 39,034,000 $ (33,109,000)
======== ========= =========== ========= ============ ==============
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF
CASH FLOWS Years Ended June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (2,105,000) $ (2,392,000)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 90,000 240,000
Change in operating assets and liabilities, net of assets acquired in
business combination:
Decrease (increase) in accounts receivable 123,000 (9,000)
Decrease in inventories 98,000 132,000
Increase in prepaid expenses and other 7,000 12,000
(Decrease) increase in accounts payable and accrued expenses (556,000) 142,000
(Increase) decrease in other asset (82,000) 6,000
------------- ------------
Net cash used in operating activities (2,425,000) (1,869,000)
------------- ------------
Cash Flows From Investing Activities
Purchase of shape memory metals operation (4,022,000) -
Purchases of property, plant and equipment (38,000) (109,000)
------------- ------------
Net cash used in investing activities (4,060,000) (109,000)
------------- ------------
Cash Flows From Financing Activities
Proceeds from sale of preferred stock, net 1,502,000 1,254,000
Proceeds from sale of common stock, net 4,603,000 1,119,000
Proceeds from short-term borrowings 104,000 856,000
Principal payments on notes payable (808,000) (291,000)
Payments on capital lease obligations (4,000) (7,000)
Payments on deferred lease - (9,000)
------------- ------------
Net cash provided by financing activities 5,397,000 2,922,000
------------- ------------
(Decrease) increase in cash and cash equivalents (1,088,000) 944,000
Cash and cash equivalents, beginning of year 1,145,000 201,000
------------- ------------
Cash and cash equivalents, end of year $ 57,000 $ 1,145,000
Supplemental Disclosure of Cash Flow Information
Cash payments for interest $ 314,000 $ 283,000
Supplemental Schedule of Noncash Investing and Financing Activities
Acquisition of shape memory metals division:
Cash purchase price $ 4,022,000 $ -
Fair value of assets acquired
Property and equipment $ 2,700,000 $ -
Patents 2,000,000 -
Inventory 1,293,000 -
Goodwill 989,000 -
------------- ------------
6,982,000 -
------------- ------------
Less
Warrants issued (2,310,000) -
Note payable issued (350,000) -
Liabilities assumed (300,000) -
------------- ------------
$ 4,022,000 $ -
============= ============
Issuance of common stock in settlement of debt $ 813,000 $ -
============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies
Nature of business
- ------------------
Memry Corporation, a Delaware corporation incorporated in 1981, is engaged in
the businesses of developing, manufacturing and marketing products and
components utilizing the properties exhibited by shape memory alloys, and
manufacturing and marketing metal parts and components machined on screw
machines and smaller metal working machines. The Company's sales are primarily
to customers located throughout the United States. The Company extends credit to
its customers all on an unsecured basis on terms that it establishes for
individual customers.
Accounting estimates
- --------------------
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Principles of consolidation
- ----------------------------
The financial statements include the accounts of Memry Corporation ("Memry") and
Wright Machine Corporation ("Wright"), its wholly-owned subsidiary
(collectively, the "Company"). All significant intercompany transactions have
been eliminated in consolidation.
Cash and cash equivalents
- -------------------------
For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid investments with a maturity of three months or less, when
purchased, to be cash equivalents. The carrying amount of these financial
instruments approximates fair value because of the short maturity of these
instruments.
Inventories
- -----------
Inventories consist principally of various metal alloy rod, plumbing products
and shape memory alloys. Inventories are stated at the lower of cost, determined
on the first-in, first-out method, or market.
F-6
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Impairment of assets
- --------------------
The Company reviews its long-lived assets and certain identifiable intangible
assets for impairment whenever events or circumstances indicate that the
carrying amount of the assets may not be recoverable.
Revenue recognition
- -------------------
Revenues from product sales are recognized when the related products are
shipped. Certain revenues are earned in connection with research and development
contracts which are principally with the U.S. Government. Such revenues are
recognized when services are rendered. Some of the Company's research and
development projects are customer-sponsored and typically provide the Company
with the production rights or pay a royalty to the Company if a commercially
viable product results.
Depreciation and amortization
- -----------------------------
Depreciation of property, plant and equipment is computed using the straight-
line method over the estimated useful lives of the respective assets, ranging
from three to thirty years. Leasehold improvements are amortized over the life
of the lease, or the improvements' estimated useful life, if shorter.
Costs of obtaining patents and patent rights are amortized using the straight-
line method over the patents' expected period of benefit which ranges from
thirteen to sixteen years.
Goodwill represents the cost of acquired assets in excess of values ascribed to
net tangible assets and is being amortized using the straight-line method over
15 years.
Costs incurred in obtaining financing are capitalized and are being amortized
over the term of the related debt.
Income taxes
- ------------
The Company files a consolidated federal income tax return. Taxes are calculated
on a separate company basis.
Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax
F-7
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
on the date of enactment.
Net loss per common share
- -------------------------
The net loss per common share is based on the net loss from operations and the
weighted average number of shares of Common Stock outstanding during each year.
Common stock equivalents have been excluded from the computation of the net loss
per common share because inclusion of such equivalents is antidilutive.
Note 2. Business Combination
On June 28, 1996, the Company purchased certain assets used in conjunction with
the shape memory metals operation of Raychem Corporation ("Raychem"). Details of
the transaction, which was accounted for as a purchase, are as follows:
A summary of the purchase payments in connection with the acquisition follows:
Cash paid to seller at closing $ 3,700,000
Note payable to seller 350,000
1,130,000 warrants issued to seller, at $0.01 2,285,000
1,250,000 warrants issued to seller, at $2.00 25,000
Obligations assumed 300,000
Acquisition costs 322,000
-----------
$ 6,982,000
===========
A summary of the assets acquired in connection with the acquisition of the shape
memory metals division is as follows:
Patent rights $ 2,000,000
Goodwill 989,000
Machinery and equipment 2,700,000
Inventory 1,293,000
-----------
$ 6,982,000
===========
F-8
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Unaudited pro forma consolidated results of operations for the years ended June
30, 1996 and 1995, as though the division had been acquired as of July 1, 1994,
follows:
1996 1995
------------ -----------
Sales $ 12,056,000 $ 9,699,000
Net (loss) (70,000) (3,319,000)
Net (loss) per common
share $ (0.01) $ (0.45)
The above amounts reflect adjustments for amortization of goodwill, additional
depreciation on revalued purchased assets, and certain production and general
and administrative costs.
In addition, pursuant to a private label/distribution agreement entered into
between Raychem and the Company, concurrent with the acquisition, Raychem will
be the exclusive distributor for an initial term of five years for non-implant
applications of products in the product line to certain customers which
comprised approximately 70% of the Raychem division's fiscal 1996 revenues.
Sales to Raychem under the private label/distribution agreement will be
discounted to allow Raychem to recover its sales and marketing expenses and to
realize a profit upon resale of such products to its customers. The unaudited
pro forma consolidated results of operations set forth above give effect to such
discount.
Note 3. Inventories
Inventories at June 30, 1996 and 1995, are summarized as follows:
1996 1995
----------------------
Raw materials and supplies $ 665,000 $ 109,000
Work-in-process 1,372,000 217,000
Finished goods 7,000 523,000
----------- ---------
$ 2,044,000 $ 849,000
=========== =========
F-9
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Note 4. Property, Plant and Equipment
Property, plant and equipment at June 30, 1996 and 1995, is summarized as
follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Land $ 166,000 $ 166,000
Buildings and improvements 942,000 942,000
Tooling and equipment 4,750,000 2,013,000
Leasehold improvements 100,000 98,000
----------- -----------
5,958,000 3,219,000
Less accumulated depreciation and amortization 2,077,000 1,986,000
----------- -----------
$ 3,881,000 $ 1,233,000
=========== ===========
</TABLE>
Note 5. Concentrations
Financial instruments which potentially subject the Company to concentration of
credit risk consist principally of cash and cash equivalents.
The Company places its deposits with quality financial institutions. At times,
cash and cash equivalents exceed the amount insured by the Federal Deposit
Insurance Corporation.
Note 6. Capital Stock
Preferred stock
- ---------------
The Company has two series of preferred stock outstanding at June 30, 1996. Both
series carry voting rights. Information regarding the shares authorized, issued
and outstanding, and conversion rates follows:
Number of Shares
---------------------------
Preferred Issued and Par
Stock Authorized Outstanding value
-------------------------------------------------
Series G 800 297.10 $100
Series H 800 66.85 $100
F-10
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Each share of preferred stock may, at the option of the holder, be converted
into 10,000 shares of common stock (subject to adjustment pursuant to anti-
dilution provisions). On June 25, 1996, a holder of the Series G preferred stock
converted 126.9 shares to 1,269,000 shares of common stock.
In addition, each share of preferred stock was automatically convertible into
10,000 shares of common stock (which number was subject to adjustment pursuant
to anti-dilution provisions) upon the first to occur of (i) the closing bid
price per share of common stock exceeding $1.50 for 30 consecutive business
days, and (ii) the conversion of a specified number of shares of Series G and
Series H preferred stock into common stock. Accordingly, subsequent to June 30,
1996 all preferred stock was converted to common stock.
Common stock
- ------------
On December 19, 1995, the Company amended its Certificate of Incorporation to
increase the number of authorized shares of its common stock, par value $0.01
per share, from 10,000,000 to 25,000,000 shares, of which there are 12,977,854
and 8,009,997 shares issued and outstanding at June 30, 1996 and 1995,
respectively.
Common stock reserved for issuance at June 30, 1996, is as follows:
Number of
Shares
---------
For exercise of outstanding warrants 5,709,368
For exercise of stock options 600,000
For conversion of Series G preferred stock 2,971,000
For conversion of Series H preferred stock 668,500
---------
9,948,868
=========
On June 28, 1996, a convertible, subordinated debenture held by an investor in
the principal amount of $763,208 was converted to 285,528 common shares and
66.85 Series H preferred shares. The investor also holds approximately 2,088,000
warrants to purchase common shares of the Company, exercisable at an average
price of $0.96 per share. These warrants were originally issued in connection
with the issuance of the convertible, subordinated debenture, referred to above.
The agreement with the investor provides, upon the occurrence of specified
events, primarily should the Company cease to maintain its principal offices
within the State of Connecticut or fail to file a registration statement
covering the resale of its securities by
F-11
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
October 31, 1996, or effect such registration statement by January 31, 1997, the
investor the right to put all securities of the Company held by the investor at
that time for a price equal to the greater of the then current market price per
share of such securities (on an as-converted basis) or $2 per share, less, in
either event, the aggregate amount of unpaid exercise prices of all warrants put
to the Company. Using $2.00 per share as the put price per share, the aggregate
put price that would have to be paid by the Company if the put were exercised
would be approximately $4,085,500. If the investor were to have the right to put
its securities and were to choose to exercise that right, such an event would
have a serious adverse effect on the Company's liquidity and the Company would
most likely have to seek equity financing to be able to meet its obligations to
the investor. However, the Company has the ability to insure that its operations
do not move from Connecticut. Also, the Company intends to cause the
registration statement to be filed by October 31, 1996 and maintained in a
manner that would prevent the put from being operative.
Stock Option Plans
- ------------------
Pursuant to the Company's stock option plan, incentive stock options are granted
at prices equal to or greater than the fair market value of the Company's stock
at the date of grant, and are exercisable at the date of grant unless otherwise
stated. In addition, non-qualified options are granted at a price determined by
the compensation committee, which may be less than market value in which case
expense is recognized. Other pertinent information related to the plan during
fiscal years 1996 and 1995, is as follows:
<TABLE>
<CAPTION>
Average
Shares Options Price Per
Reserved Outstanding Share
-------- ----------- ---------
<S> <C> <C> <C>
Balance, June 30, 1994 - - $ -
Canceled - - -
Granted 600,000 436,500 3.47
Exercised - - -
-------- ----------- ---------
Balance, June 30, 1995 600,000 436,500 $ 3.47
Canceled - (69,000) (3.53)
Granted - 125,000 0.90
Exercised - - -
-------- ----------- ---------
Balance, June 30, 1996 600,000 492,500 $ 1.35
======== =========== =========
</TABLE>
At June 30, 1996, 223,500 of the outstanding options were exercisable.
F-12
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Warrants
- --------
The following table summarizes warrants outstanding at June 30, 1996 and 1995:
<TABLE>
<CAPTION>
Shares Number of Exercise
Reserved Shares Price
------------ ----------- ---------------
<S> <C> <C> <C>
Balance, June 30, 1994 19,991,257 19,991,257 $ .20 - $10.00
Adjustment for reverse stock split (17,992,131) (17,992,131) -
Canceled (212,948) (212,948) $ .20 - $10.00
Granted 4,302,713 4,302,713 $ 1.00 - $ 5.00
Exercised - - -
------------ ----------- ---------------
Balance, June 30, 1995 6,088,891 6,088,891 $1.00 - $ 7.40
Canceled (3,085,704) (3,085,704) $1.40
Granted 2,706,181 2,586,181 $0.01 - $ 2.75
Exercised - - -
------------ ----------- ---------------
Balance, June 30, 1996 5,709,368 5,589,368 $0.01 - $ 7.40
============ =========== ===============
</TABLE>
Note 7. Income Taxes
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. For financial reporting purposes,
a valuation allowance of $13.5 million and $12.3 million has been recognized as
of June 30, 1996 and 1995, respectively, to reflect the estimated amount of
operating loss carryforwards and temporary differences which may not be
realized. The approximate effect of carryforwards and temporary differences that
give rise to deferred tax assets and liabilities as of June 30, 1996 and 1995,
are as follows:
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 12,000 $ 21,000
Inventory reserves 172,000 304,000
Capitalization of inventory costs 31,000 39,000
Vacation accruals 41,000 21,000
Depreciation and amortization (13,000) 46,000
Research and development credit carryforwards 160,000 160,000
Net operating loss carryforwards 13,100,000 11,679,000
-------------- --------------
Total deferred tax assets 13,503,000 12,270,000
Valuation allowance (13,503,000) ( 12,270,000)
-------------- --------------
Net deferred tax assets $ - $ -
============== ==============
</TABLE>
F-13
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
As of June 30, 1996, the Company has net operating loss carryforwards for income
tax purposes of approximately $33 million, which expire beginning in 1998. In
addition, the Company has tax credit carryforwards available to offset future
taxable income aggregating approximately $160,000 which expire in various
amounts from 1998 through 2008. As a result of numerous equity transactions, the
net operating loss carryforwards and the unused tax credits are significantly
limited as to ultimate amounts of these tax attributes which may be utilized and
the periods for which they will apply.
Note 8. Notes Payable
Notes payable consist of the following at June 30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revolving loan payable to bank, interest payable
monthly at the bank's base rate plus 4% (12.25%
at June 30, 1996), due July 1, 1996. (A) $ 381,000 $ 570,000
Term note payable to bank, due in monthly installments
of $7,000, plus interest at the bank's base rate plus 4%
(12.25% at June 30, 1996), due July 1, 1996. (A) 83,000 167,000
Mortgage note payable to bank, due in monthly
installments of $3,700, plus interest at the bank's
base rate plus 4% (12.25% at June 30, 1996),
due July 1, 1996. (A) 471,000 910,000
Convertible, subordinated debenture note, payable to
investor, interest at 5% payable semiannually, due
December 1999. (B) - 763,000
Unsecured note payable to Raychem Corporation,
interest payable at 10%, due on demand. (C) 350,000 -
Unsecured notes payable to affiliated company, interest
payable at 6%, due on demand. 344,000 240,000
</TABLE>
F-14
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Unsecured note payable to officer/stockholder, interest
payable at 12%, due on demand. 60,000 60,000
Unsecured notes payable to affiliated company, interest
at prime plus 4%, payable on demand. 9,000 100,000
------------ ------------
$ 1,698,000 $ 2,810,000
============ ============
</TABLE>
(A) At June 30, 1996 and 1995, the Company was in default with respect to
its revolving loan, term note and mortgage note. Accordingly, at June
30, 1996 and 1995, the term and mortgage loans were classified as
current obligations in the accompanying consolidated balance sheet. At
June 30, 1996, the Company expected to refinance the above debt and on
August 9, 1996, the Company entered into a new credit facility with a
different lender.
The credit facility entered into on August 9, 1996, provides both a
revolving and term loan. The revolving loan provides for borrowings up
to the lesser of $1,500,000 or the sum of a) 80% of eligible accounts
receivable and b) the lesser of $500,000 or 25% of eligible inventory.
Borrowings pursuant to the revolving loan are due upon demand and bear
interest, payable monthly, at prime plus 2%. The term loan is in the
amount of $1,135,000 and is payable in monthly principal installments of
$18,917, plus interest at prime plus 2.25%, through July 2001. The term
loan is due upon demand. These loans are cross-collateralized by
substantially all the assets of the Company.
The term loan is subject to a mandatory prepayment in the amount of
$135,000 (i) on or prior to December 31, 1996 if, prior to December 31,
1996, the Company raises additional equity (excluding equity raised to
purchase intellectual property, medical patents and other assets related
thereto from Raychem), and (ii) on or before June 30, 1997 if the
Company does not raise such additional equity prior to December 31,
1996.
(B) This note was converted to common and preferred stock during the year
ended June 30, 1996 (see Note 6).
(C) The obligation was incurred in connection with the acquisition of the
shape memory metals operation of Raychem (see Note 2) and was repaid
subsequent to June 30, 1996, in connection with the new credit facility
described above.
F-15
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Note 9. Leases
The Company leases telephone equipment and a copier under noncancelable leases.
These leases have been recorded as capital leases and are included in the
accompanying consolidated balance sheets under the caption "Property, Plant and
Equipment". The Company also leases its Connecticut and California warehouse and
office facilities under operating leases. The lease on the Connecticut facility
expires in September 2001 and the lease on the California facility expires in
September 1998.
Future minimum lease payments under capital leases and significant noncancelable
operating leases, with remaining terms of one year or more, are as follows at
June 30, 1996:
Capital Operating
Leases Leases
------- -----------
1997 $ 4,000 $ 386,000
1998 4,000 386,000
1999 - 197,000
2000 - 134,000
2001 - 33,000
------- -----------
8,000 $ 1,136,000
===========
Less amount representing interest 1,000
-------
Present value of future minimum lease 7,000
Less current maturities 4,000
-------
$ 3,000
=======
Rent expense under operating leases for the years ended June 30, 1996 and 1995
amounted to $130,000 and $114,000, respectively.
Note 10. Contingencies
401(K) Plan
- -----------
The Company maintains defined contribution plans (401K) which cover
substantially all of its employees. Contributions are based on specific
percentages of employee voluntary contributions. Employees vest immediately.
There were no expenses recognized for this plan in fiscal 1996 and 1995 as no
employees were participating.
F-16
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
Data Switch Corporation v. Memry Corporation, et al.
- ----------------------------------------------------
Verdon Corporation owns property located at 83 Keeler Avenue, Norwalk,
Connecticut (the "Property") which it leased to New Dimensions in Education,
Inc. ("New Dimensions"). New Dimensions subleased the Property to Data Switch
Corporation, which in turn subleased the Property to the Company. On December
18, 1990, Data Switch commenced an action against Verdon, New Dimensions and the
Company seeking a declaratory judgment that the lease was not renewed on June
12, 1990, for an additional five-year term. The Company supports this request;
however, Verdon and New Dimensions have taken the position that the lease was
renewed by the Company. On October 28, 1992, David O'Toole, successor to Verdon
Corporation, filed a cross-complaint against the Company alleging that the
Company intentionally and/or negligently damaged the Property during the period
of its tenancy. Similar allegations were also made against New Dimensions and
Data Switch. O'Toole's allegations fail to include any specific itemization of
the nature or scope of the injuries alleged. No formal discovery has taken place
to date. The Company intends to defend this action vigorously and believes that
the possibility of a negative outcome would be remote.
Catizone v. Memry Corporation
- -----------------------------
The Company was a defendant in an action entitled Catizone v. Memry Corporation,
-----------------------------
et al. During 1996, this case was dismissed.
- -----
Neil E. Rogen v. Memry Corporation
- ----------------------------------
In September 1992, Neil E. Rogen, formerly an officer and director of the
Company, brought an action against the Company for the alleged breach of an
employment agreement between Mr. Rogen and the Company and for indemnification
for legal expenses incurred by Mr. Rogen in connection with an investigation of
and subsequent lawsuit against Mr. Rogen by the Securities and Exchange
Commission and certain related and unrelated lawsuits. During 1996, this case
was settled for $30,200 which was paid during fiscal 1996.
Chrysler Canada Claim. By letter dated October 23, 1995, an attorney purporting
- ---------------------
to represent Chrysler Canada Limited and its pension funds made a demand for
payment of interest unpaid on a $1,500,000 10% note, originally due October 31,
1991, and demanded inspection of books and records of the Company. By letter
dated October 30, 1995, the Company, through its counsel, offered to pay
Chrysler Canada Limited and its pension funds $162,112 upon receipt of a duly
authorized release acknowledging that no further amounts were due and
acknowledging the termination of rights under certain warrants. Accordingly,
approximately $162,000 is included
F-17
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
in accounts payable and accrued expenses. Thereafter there has been a series of
communications between counsel for the parties regarding their interpretation of
the rights and responsibilities of the Company to pay additional interest and to
permit inspection of books and records. The Company has asserted that Chrysler
Canada Limited and its pension funds waived their rights to further interest and
that the Company is not obligated to permit the inspection of its books and
records absent disclosure of a valid corporate purpose which Chrysler Canada has
declined to provide as of this date. The last communication occurred in or about
April, 1996. Management does not anticipate that the Company will be liable for
any additional amounts which would be material to the Company.
The Company does not expect that any of the matters discussed above will have
a material impact on the Company's financial condition, future operating
results, and/or liquidity.
Note 11. Segment Information
The Company is principally engaged in two business segments: Memry Segment
("Memry") and Wright Machine Segment ("Wright"). All businesses are located
domestically. Wright includes the manufacturing and marketing of metal parts and
components machined on screw machines and smaller metal working machines. Memry
is engaged in developing, manufacturing and marketing subassemblies, products
and components utilizing the properties exhibited by shape memory alloys.
Memry's revenues include product development contracts for outside customers.
Memry expenses include internally funded research as well as all costs
associated with outside clients. There were no significant intersegment sales or
transfers.
Operating loss is total revenue less operating expenses, excluding interest.
Identifiable assets of each segment are the assets used by that segment in its
operations, excluding general corporate assets. General corporate assets are
principally cash, deposits and other receivables.
F-18
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---------------------
(in thousands)
---------------------
<S> <C> <C>
Revenues
Wright $ 2,538 $ 3,716
Memry 1,136 1,013
-------- --------
Total operating revenues $ 3,674 $ 4,729
======== ========
Operating loss
Wright $ (194) $ (136)
Memry (1,661) (1,896)
-------- --------
$ (1,855) $ (2,032)
======== ========
Interest (250) (360)
-------- --------
Net loss $ (2,105) $ (2,392)
======== ========
Assets
Wright $ 1,862 $ 1,752
Memry 7,817 2,227
-------- --------
Total assets $ 9,679 $ 3,979
======== ========
Depreciation and Amortization
Wright $ 52 $ 185
Memry 38 55
-------- --------
$ 90 $ 240
======== ========
Capital Expenditures
Wright $ 19 $ 15
Memry 2,722 94
-------- --------
$ 2,741 $ 109
======== ========
</TABLE>
Depreciation and amortization includes depreciation and amortization of capital
assets, including patents.
Note 12. Emerging Accounting Standards
The Financial Accounting Standards Board ("FASB") has issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of", which
becomes effective for the Company's year ending June 30, 1997. Statement No. 121
establishes accounting standards for the impairment of long-lived asset, certain
identifiable intangibles, and goodwill related to those assets to be held and
used, and for long-lived assets and certain
F-19
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
June 30, 1996 and 1995
- --------------------------------------------------------------------------------
identifiable intangibles to be disposed of. The Company does not anticipate that
the adoption of this standard will have a significant impact on its financial
statements.
The FASB has also issued Statement No. 123, "Accounting for Stock-Based
Compensation." This statement establishes new standards, effective for the
Company's year ending June 30, 1997, for stock-based compensation plans under
which employees receive shares of stock or other equity instruments of the
employer. The Statement establishes a fair value-based method of accounting for
stock-based compensation plans and encourages, but does not require, entities to
adopt that method in place of existing generally accepted accounting principles.
Companies that elect to continue under existing generally accepted accounting
principles must disclose pro forma net income and earnings per share for all
years presented, as if Statement No. 123 had been adopted.
For its fiscal year ending June 30, 1997, management has elected to present pro
forma disclosure as if the expense recognition elements of the statement were
adopted. These pro forma adjustments will likely decrease pro forma net income
and earnings per share.
F-20
<PAGE>
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits listed in the Exhibit Index attached hereto are being
supplementally filed herewith.
(b) Reports on Form 8-K
No Form 8-K was filed during the last quarter of the fiscal year ended June
30, 1996. However, a Form 8-K was filed on July 15, 1996 with respect to
disclosure regarding "Item 2. Acquisition or Disposition of Assets" and
"Item 7. Financial Statements and Exhibits, " disclosing the consummation
of the Raychem Acquisition. On September 13, 1996, the Company filed a
Form 8-K/A containing the financial statements relating to the Raychem
Acquisition.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEMRY CORPORATION
Date: October 14, 1996 By: /s/ James G. Binch
---------------------------------
James G. Binch
Title: President
11
<PAGE>
Exhibit Index
Exhibit Sequential
Number Description of Exhibit Page
- ------ ---------------------- ----------
10.49 Securities Purchase Agreement, dated as of December 9, (9)
1994, between Memry Corporation and Dominion Partners
10.50 Warrant Cert. No. 94-3, dated as of December 23, 1994, (9)
issued to Banque Pour L'Industrie Francaise (ref: GAN)
10.51 Securities Purchase Agreement, dated as of December 21, (9)
1994, between Memry Corporation and Banque Pour
L'Industrie Francaise (ref: GAN)
10.52 Securities Purchase Agreement, dated as of May 22, 1995, (9)
between Memry Corporation and Banque Pour L'Industrie
Francaise (ref: GAN)
10.53 Securities Purchase Agreement, dated as of June 22, (9)
1995, between Memry Corporation and Nicholas Grant
10.54 Employee Agreement on Inventions and Patents, between (9)
the Company and James G. Binch
11 Statement re: Computation of Per Share Earnings (7)
27 Financial Data Schedule (9)
- ---------------------------------
(7) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1995.
(9) Submitted separately, electronically.
<PAGE>
Exhibit 10.49
SECURITIES PURCHASE AGREEMENT
-----------------------------
MEMRY CORPORATION
DECEMBER 9, 1994
<PAGE>
SECURITIES PURCHASE AGREEMENT
-----------------------------
THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made as of the 9th day
of December, 1994 by and between MEMRY CORPORATION, a Delaware corporation (the
"Company"), and Dominion Partners, a Partnership with an address at 2909 Bay to
Bay Blvd. #600 Tampa, FL 33629 (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Securities.
-------------------------------
1.1. Sale and Issuance of Securities.
-------------------------------
Subject to the terms and conditions of this Agreement, on the Closing Date
(defined below) the Investor agrees to purchase and the Company agrees to sell
and issue to the Investor Fourteen Thousand Two Hundred Eighty-Six (14,286)
shares of the Company's Common Stock for a purchase price of Twenty-Five
Thousand Dollars ($25,000.00), being $1.75 per share (the "Closing"). The
shares of the Company's Common Stock purchased pursuant to this Section 1.1 are
hereinafter referred to as the "Shares" and the "Securities," and the purchase
price paid pursuant to this Section 1.1 is hereinafter referred to as the
"Purchase Price."
1.2 Closing.
-------
(a) The Closing shall take place at the offices of Finn Dixon &
Herling, Stamford, Connecticut, on later than Dec. 12th (the "Closing Date").
(b) At the Closing the Company shall deliver to the Investor a
certificate representing the appropriate number of shares of Common Stock which
the Investor is purchasing against delivery to the Company by such Investor of a
check in the amount applicable portion of the Purchase Price to be paid at such
Closing.
2. Representations and Warranties of the Investor. Investor hereby
----------------------------------------------
represents and warrants to the Company and acknowledges and intends that the
Company rely thereon, as follows:
(a) Investor will not sell, assign, pledge, transfer, or otherwise
dispose of, whether directly or indirectly, all or any portion of the Securities
purchase hereby to any person or entity without complying with applicable
securities laws;
(b) Investor is acquiring the Securities for Investor's own account,
for investment purposes only and not with a view to any distribution of such
Securities;
<PAGE>
- 2 -
(c) Investor acknowledges and agrees that the Company has informed
Investor that the Securities are not registered under any securities laws, and,
therefore, that (absent registration under or exemption from applicable
securities laws) the Securities are subject to substantial restrictions on
transfer and the Securities may not be transferred for an indefinite period of
time;
(d) Investor has investigated the purchase of the Securities to the
extent Investor deems necessary or desirable, and the Company has provided
Investor with any assistance in connection therewith which Investor has
requested. Investor has such knowledge and experience in financial and business
matters that Investor is capable of evaluating the merits and risks of the
acquisition of the Securities and of making an informed investment decision with
respect thereto and Investor has the ability to bear the economic risk of an
investment in the Company and to withstand a complete loss of its investment.
Investor is financially able to hold the Securities for an indefinite period of
time;
(e) Investor is not relying on the Company or any of its directors,
officers, employees, or agents for guidance with respect to tax and other
applicable laws of any jurisdiction, or other economic considerations, and
Investor has been furnished by the Company with all information Investor has
deemed necessary or appropriate in order to form an informed investment decision
concerning the purchase of the Securities. Investor has been afforded an
opportunity to ask questions of, and receive answers from representatives of the
Company concerning the terms and conditions of Investor's purchase of the
Securities and has been afforded the opportunity to obtain any additional
information (to the extent of the Company had such information or could acquire
it without unreasonable effort or expense) necessary to verify the accuracy of
information otherwise furnished by the Company;
(f) Investor understands that no United States federal or state agency
or any agency of any other government has passed upon or made any recommendation
or endorsement of any investment in the Company;
(g) Investor has not been organized for the purpose of purchasing the
Securities; and
(h) Investor understands that the certificates evidencing the Shares
will bear a legend stating in substance:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTER UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED,
<PAGE>
- 3 -
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH SALE, OFFER FOR SALE, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION DOES NOT VIOLATE THE PROVISIONS OF SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT."
provided, however that the Company agrees to cause such legend to be removed
from any certificates representing the Shares after such Shares have been
transferred pursuant to an effective registration under the Securities Act of
1933 or an available exemption under Section 4(1) of that Act, or Rule 144,
promulgated thereunder.
3. Registration. The Company covenants and agrees as follows:
------------
3.1 Definitions. For purposes of this Section 3:
-----------
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means (1) the Shares, and (2)
any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such Shares, excluding in all cases, however, any Registrable Securities sold by
a person in a transaction in which its rights under this Section 4 are not
assigned;
(c) The number of shares of "Registrable Securities then outstanding"
shall be the number of shares of Common Stock outstanding which are, and the
number of shares of Common Stock issuable pursuant to exercisable or convertible
securities which are, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 3.10 hereof; and
(e) The term "Form S-1" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted by
the SEC which permits inclusion or
<PAGE>
- 4 -
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
3.2 Registration.
------------
(a) The Company shall use its best efforts to effect the registration
under the Act of all Registrable Securities within forty-five days after the
availability of audited financial statements for its fiscal year ending June 30,
1994, but in no event later than December 31, 1994.
(b) If the Holders intend to distribute the Registrable Securities
covered by the registration by means of an underwriting, they shall so advise
the Company. All Holders proposing to distribute their securities through such
underwriting ("Participating Holders") shall (together with the Company as
provided in subsection 3.3(e)) enter into an underwriting agreement in customary
from with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Participating Holders. Notwithstanding any other
provision of this Section 3.2, if the underwriter advises the Participating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all
Participating Holders thereof in proportion (as nearly as practicable) to the
amount of Registrable Securities of the Company owned by each Participating
Holder.
(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders a certificate signed by the President of the Company stating that the
Company is engaged in an activity which, in the good faith judgement of the
Board of Directors of the Company, would be adversely affected by the requested
registration to the material detriment of the Company, then the Company shall
have the right to defer such filing for a period of not more than four months,
provided that such right may not be exercised more than once.
3.3 Obligations of the Company. Whenever required under this Section
--------------------------
3 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective until all of the Registrable Securities shall have been sold by the
Investor;
<PAGE>
- 5 -
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of the securities covered by such
registration statement;
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders to
enable the Holders to consummate the disposition in such jurisdictions of such
securities, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering, (each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement);
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading in the light of the circumstances then existing; and
(g) Furnish, at the request of any Holder, on the date that such
Holder's Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 3, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes
<PAGE>
- 6 -
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders and (ii) a letter, dated such date, from the
independent public accountants of the Company, in form and substance as is
customarily given by independent public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and the
Holders.
3.4 Obligations of Selling Holders.
------------------------------
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 3 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company in writing such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(b) The Holders of Registrable Securities included in the registration
statement will not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus.
3.5 Expenses of Registration. All expenses other than underwriting
------------------------
discounts and commissions incurred in connection with registrations, filings, or
qualifications pursuant to Section 3.2, including (without limitation) all
registration,, filing and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company, transportation expenses,
mailing expenses, and the fees and disbursements of counsel for the selling
Holders shall be borne and paid by the Company.
3.6 Underwriting Requirements. In connection with any offering
-------------------------
involving an underwriting of shares being issued by the Company, the Company
shall not be required to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between he Company and the underwriters selected by it, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize to success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of Securities to be sold other than by the Company
that the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that
<PAGE>
- 7 -
number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling Holders
according to the total amount of securities entitled to be included therein
owned by each selling Holder or in such other proportions as shall mutually be
agreed to by such selling Holders).
3.7 Delay of Registration. No Holder shall have any right to obtain
---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
3.8 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Section 3:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder requesting to join in such registration, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act") against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements made therein not misleading, or (iii) any violation or
alleged violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities law applicable to the Company in connection with any such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonable incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided however,
that the indemnity agreement contained in this subsection 3.8(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company
<PAGE>
- 8 -
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 3.8(b) in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 4.8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
3.8 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 3, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnified party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by
<PAGE>
- 9 -
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
3.8, but omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 3.8 mutually satisfactory to the parties;
provide, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
3.8, but omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnifed party
otherwise than under this Section 3.8.
(d) The obligations of the Company and Holders under this Section 3.8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 3, and otherwise.
3.9 Reports Under Securities Exchange Act of 1934. With a view to
---------------------------------------------
making available tot he Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-1, the Company agrees on and after the
Closing to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) Use its best efforts to enable the Holders to utilize Form S-
1 for the sale of their Registrable Securities;
(c) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
<PAGE>
- 10 -
(d) Furnish to any Holder, so long as the Holder owns Registrable
Securities representing two percent (2%) or more of the Company's Common Stock,
(i) forthwith upon request a written statement by the Company that it has
complied with the reporting requirements of SEC Rule 144, the Act and the 1934
Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-1 (at any time after it so qualifies), (ii) substantially
concurrently with the filing thereof, copies of the annual and quarterly reports
of the Company filed with the SEC and such other reports and documents so filed
by the Company, (iii) as soon as they shall become available to the Company, any
and all audited financial statements of the Company and management letters from
the Company's independent auditors and the Company's response thereto, and (iv)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
3.10 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 3 may be
assigned by a Holder to a transferee or assignee of such securities provided the
Company is, prior to or simultaneously with such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provide, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
3.11 Amendment of Registration Rights. Any provision of this Section
--------------------------------
3 may be amended and the observance thereof 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 a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph 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.
4. Miscellaneous.
-------------
4.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing shall in no way be
<PAGE>
- 11 -
affected by any investigation of the subject matter thereof made by or on behalf
of the Investor or the Company.
4.2 Successors and Assigns. The terms and conditions of this
----------------------
agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
4.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Connecticut as applied to agreements among
Connecticut residents entered into and to be performed entirely within
Connecticut.
4.4 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.
4.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this agreement.
4.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
48 hours after deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties, (iii) upon transmission of a confirmed telecopy to such party
at a telecopier number furnished by such party for such purpose, or (iv) upon
delivery to such address by Federal Express or other courier service.
4.8 Amendments and Waivers. Except as specified in Section 3.11, any
----------------------
term of this Agreement may be amended and the observance of any term 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 a majority of the outstanding Shares. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this
<PAGE>
- 12 -
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.
4.9 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
4.10 Indemnification.
---------------
(a) The Company shall, with respect to the representations,
warranties, covenants and agreements made by the Company herein, indemnify,
defend and hold the Investor harmless against all liability, loss or damage,
together with all reasonable costs and expenses related thereto (including legal
and accounting fees and expenses), arising from the untruth, inaccuracy or
breach of any such representations, warranties, covenants or agreements of the
Company.
(b) The Investor shall, with respect to the representations,
warranties, covenants and agreements made by the Investor herein, indemnify,
defend and hold the Company harmless against all liability, loss or damage,
together with all reasonable costs and expenses related thereto (including legal
and accounting fees and expenses), arising from the untruth, inaccuracy or
breach of any such representations, warranties, covenants or agreements of the
Investor.
4.11 Remedies. In case any one or more of the covenants and/or
--------
agreements set forth in this Agreement shall have been breached by the Company,
the Investor may proceed to protect and enforce its or their rights either by
suit in equity and/or by action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement. A
party acting pursuant to this Section 4.11 shall be indemnified against all
liability, loss or damage, together with all reasonable costs and expenses
related thereto (including legal and accounting fees and expenses) in accordance
with Section 4.10.
4.12 Nouns and Pronouns. Whenever the context may require, any
------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice versa.
<PAGE>
- 13 -
4.13 Information to be provided by Investor. Investor agrees to
--------------------------------------
provide to the Company such information as the Company may reasonably request in
order to make accurate and timely required filings and disclosures to its
stockholders and to federal, state and self-regulatory agencies.
4.14 Confidentiality. Any information provided to Investor pursuant
---------------
to this Agreement shall be used by the Investor solely for, and will only be
disclosed to Investor's officers, employees, agents and professional advisors
who need to know such information and who will use such information solely for,
the purpose of evaluating the Investor's investment in the Company and in
furtherance of its interests as an investor in the Company, and the Investor
will, and will cause such officers, employees, agents and professional advisors
to, maintain the confidentiality of all non-public information of the Company
obtained pursuant to this Agreement which is designated by the Company as
confidential and which could not otherwise be legally and legitimately obtained
by the Investor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MEMRY CORPORATION
57 Commerce Drive
Brookfield, Connecticut 06804
By: /s/ James G. Binch
-----------------------------
James G. Binch, President
INVESTOR DOMINION PARTNERS
by: DOMINION FINANCIAL GROUP, INC.
(Managing Partner)
/s/ W. Andrew Krusen - Pres.
--------------------------------
Name:
Title, if appropriate:
<PAGE>
Exhibit 10.50
Warrant Cert. No. 94-3 Warrants to Purchase
116,667 Shares
of Common Stock
TRANSFERABLE WARRANTS
TO PURCHASE COMMON STOCK OF
MEMRY CORPORATION
THIS CERTIFIES THAT, for value received, Banque pour L'Industrie Francaise
(ref: GAN), with an address of 26 Rue Laffitte, 75311 Paris Cadex 09, France, or
registered assignees, is entitled to purchase from Memry Corporation, a
corporation organized and existing under the laws of the State of Delaware
(hereinafter called the "Company"), at a purchase price equal to the "Exercise
Price" (as hereinafter defined), at any time from and after October 1, 1995 to
and including the "Final Exercise Date" (as hereinafter defined), 116,667 shares
of the Company's Common Stock, $.01 par value (the "Warrant Shares"), subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The Exercise Price shall initially be Two Dollars ($2.00) per share,
subject to adjustment as hereinafter provided.
Certain capitalized terms used in this Warrant Certificate are defined in
paragraph 5 hereof. These Warrants are issued pursuant to a Securities Purchase
Agreement, dated December 21, 1994 (the "Purchase Agreement", between the
Company and the initial Holder hereof. By accepting this Warrant Certificate,
the holder agrees to be bound by the terms of the Purchase Agreement.
THESE WARRANTS ARE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
1. (a) Exercise of Warrants. The rights represented by this Warrant
--------------------
Certificate may be exercised by the registered holder hereof, in whole or in
part (but not as to a fractional share of Common Stock), by (i) the delivery of
this Warrant Certificate, together with a properly completed Subscription Form,
to the principal office of the Company at 57 Commerce Drive, Brookfield,
Connecticut 06804 (or such other office or agency of the Company as it may
designate by notice in writing to the holder hereof) and (ii) payment to the
Company, in immediately available funds, of the Exercise Price for the Warrant
Shares being purchased. Certificates for the Warrant Shares so purchased
(together with a cash adjustment in lieu of any fraction of a share) shall be
delivered to the holder hereof within a reasonable time, not exceeding twenty
(20) business days, after the rights represented by this Warrant Certificate
shall have been so exercised and paid for, and, unless these Warrants have
expired, a new Warrant Certificate representing the number of Warrants, if any,
with respect to which this Warrant Certificate shall not then have been
<PAGE>
exercised, in all other respects identical with this Warrant Certificate, shall
also be issued and delivered to the holder hereof within such time, or
appropriate notation may be made on this Warrant Certificate and the same
returned to such holder.
(b) Transfer Restriction Legend. Each certificate for Warrant Shares
---------------------------
issued upon exercise of these Warrants shall bear the legend appearing on the
first page of this Warrant Certificate and any additional legend which the
Company, in its sole discretion, may deem appropriate at such time.
2. (a) Warrants and Warrant Shares Not Registered. Each holder of these
------------------------------------------
Warrants, by acceptance hereof, represents and covenants that: (1) these
Warrants and the Warrant Shares which may be purchased upon exercise of these
Warrants are not being registered under the Securities Act of 1933, as amended
(the "Securities Act"), on the grounds that the issuance of this Warrant
Certificate and the offering and sale of such Warrant Shares to the holder are
and will be exempt from registration under Section 4(2) of the Securities Act as
not involving any public offering and/or Regulation S thereunder; and (2) it (i)
is acquiring these Warrants for investment for its own account, with no present
intention of reselling or otherwise distributing the same, subject,
nevertheless, to any requirement of law that the disposition of its property
shall at all times be within its control, (ii) is an "accredited investor" as
defined in Regulation D under the Securities Act, (iii) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investments made or to be made in connection with
the acquisition and exercise of these Warrants, and (iv) has, so far as such
holder is aware, been provided all such information and access to information
concerning its investment hereunder as such holder has requested from the
Company. Except as provided for in paragraph 2(b) hereof, the Company may
condition any Warrant exercise and issuance of Warrant Shares upon its receipt
of the representations and covenants given above and under the Purchase
Agreement by the original Warrant holder with respect to such Warrant Shares.
(b) Notice of Proposed Transfer; Opinion of Counsel. Each holder of
-----------------------------------------------
this Warrant Certificate, by acceptance hereof, agrees that prior to the
disposition of these Warrants or any Warrant Shares in a transaction for which a
registration statement under the Securities Act is not currently effective, such
holder will give written notice to the Company of such intention, together with
an opinion of counsel acceptable to the Company and its counsel (1) that
registration under the Securities Act is not necessary with respect to such
disposition and that such disposition will comply with the Securities Act, and
(2) that such disposition will also be in compliance with applicable securities
laws of states and other jurisdictions.
3. Special Agreements of the Company. The Company covenants and agrees
---------------------------------
that:
<PAGE>
(a) Character of Warrant Shares. All Warrant Shares which may be
---------------------------
issued upon the exercise of the Warrants represented hereby, upon issuance, will
be duly authorized, validly issued, fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and without
limiting the generality of the foregoing, that it will take from to time all
such action as may be requisite to ensure that the par value per share (if any)
of the Common Stock is at all times equal to or less than the then effective
Exercise Price, and that it will refrain from taking any action which could
pursuant to the terms of the Warrants result in the Exercise Price per share
being less than the par value per share of the Common Stock;
(b) No Violations. The Company will take all such action as may be
-------------
necessary to ensure that Warrant Shares may be so issued without violation of
any applicable United States state or federal law or regulation, or of any
requirements of any securities exchange or inter-dealer quotation system upon
which the Common Stock of the Company may be listed or quoted;
(c) Actions in Avoidance; Non-Dilution. The Company will not, by
----------------------------------
amendment of its Certificate or Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, issue or sale of
securities or otherwise, avoid or take any action which would have the effect of
avoiding the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in carrying out all of the provisions of this Warrant Certificate and in taking
all of such action as may be necessary or appropriate in order to protect the
rights of the holders of these Warrants against dilution or other impairment;
and
(d) Financial Information. The Company will, if requested, provide
---------------------
each Warrant holder copies of all annual, quarterly and current reports required
to be filed by it pursuant to Section 13 or 15 of the Securities Exchange Act of
1934, as amended, and in addition, promptly after requested, such other
information concerning the Company as any Warrant holder may reasonably require
(i) in order to comply with any law or governmental regulation, order of any
court, or order, inquiry or investigation of any governmental agency or
instrumentality, or (ii) in order to exercise any right or privilege of such
Warrant holder or to enforce any obligation of the Company under the Warrants or
any agreement or instrument executed and delivered in connection therewith.
Notwithstanding the foregoing covenants, the Holder hereof, by its
acceptance hereof, acknowledges: (i) that, at the time of the original issuance
of these Warrants, the Company has not reserved shares of Common Stock for
issuance upon the exercise hereof; and (ii) that, at such time, the Company does
not have available from its authorized but unissued and reserved for issuance
Common Stock
- 3 -
<PAGE>
a sufficient number of shares of Common Stock to allow for the full exercise
hereof; and (iii) that, pursuant to the terms of this Warrant Certificate, the
Company is not obligated to have authorized and reserved for issuance upon
exercise a sufficient number of shares of Common Stock to allow for the full
exercise hereof prior to October 1, 1995.
4. (a) Anti-Dilution Provisions. The number of Warrants represented
------------------------
hereby and the Exercise Price for each such Warrant shall be subject to
adjustment from time to time as hereinafter provided.
(b) Stock Splits and Reverse Splits. In the event that the Company
-------------------------------
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares (including without limitation by way of a stock
dividend), the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced and the number of Warrants represented by this
Warrant Certificate immediately prior to such subdivision shall be
proportionately increased, and conversely, in the event that the outstanding
shares of Common Stock of the Company shall at any time be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrants
represented by this Warrant Certificate immediately prior to such subdivision
shall be proportionately decreased.
(c) Reorganizations and Asset Sales. If any capital
---- -------------------------------
reorganization or reclassification of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or a tender or
exchange offer for shares of Common Stock, or any liquidation of all or
substantially all of the Company's assets shall be effected in such a way that
holders of Common Stock shall be entitled to, or will upon the declaration of a
liquidating dividend, receive stock, securities or assets with respect to or in
exchange for Common Stock, then the following provisions shall apply:
(i) As a condition of such reorganization, reclassification,
consolidation, merger, sale, tender offer, exchange offer or
liquidation (except as otherwise provided below in this paragraph
4(c)), lawful and adequate provisions shall be made whereby each
holder of Warrants shall thereafter have the right to receive upon the
terms and conditions specified in this Warrant Certificate and in lieu
of the Warrant Shares immediately theretofore receivable upon the
exercise of each Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the number
of Warrant Shares immediately theretofore
- 4 -
<PAGE>
so receivable had such reorganization, reclassification,
consolidation, merger, sale, tender offer, exchange offer or
liquidation not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of
such holder to the end that the provisions hereof (including without
limitation provisions for adjustments of the Exercise Price and the
number of Warrants represented hereby) shall therefore be applicable,
as nearly as may be, in relation to any shares of stock, securities or
assets thereafter deliverable upon the exercise of these Warrants.
(ii) In the event of a merger or consolidation of the Company
with or into another corporation as a result of which a number of
shares of Common Stock of the surviving corporation greater or lesser
than the number of shares of Common Stock of the Company outstanding
immediately prior to such merger or consolidation are issuable to
holders of Common Stock or the Company, then the Exercise Price in
effect immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Company,
and the number of Warrants represented hereby shall be proportionately
adjusted for such adjustment in the Exercise Price.
(d) Notice of Adjustment. Whenever the Exercise Price and/or the
--------------------
number of Warrants represented hereby shall be adjusted as herein provided, or
the rights of Warrant holders shall change by reason of other events specified
herein, the Company shall compute the adjusted Exercise Price and the adjusted
number of Warrants represented hereby in accordance with the provisions hereof
and shall prepare a certificate signed by its President, Vice President,
Treasurer or Secretary setting forth the adjusted Exercise Price and number of
Warrants represented hereby or specifying the other shares of stock, securities
or assets receivable as a result of such change in rights, and showing in
reasonable detail the facts and calculations upon which such adjustments or
other changes are based. The Company shall promptly cause to be mailed to the
holder of these Warrants copies of such officer's certificate together with a
notice stating that the Exercise Price and/or the number of Warrants represented
hereby, as the case may be, have been adjusted and setting forth the adjusted
Exercise Price and number of Warrants represented hereby.
(e) Notifications to Holders. In case at any time the Company
------------------------
proposes:
(i) to declare any dividend upon any class of stock other than
preferred stock;
- 5 -
<PAGE>
(ii) to make any special dividend or other distribution to the
holders of any class of stock, other than dividends of Common Stock
paid to holders of Common Stock;
(iii) to offer for subscription pro rata to the holders of its
securities any additional securities or other rights;
(iv) to effect any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of the
Company with another corporation, or sale or other disposition of all
or substantially all of its assets; or
(v) to effect a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then, in any one or more of said cases, the Company shall give the holder of
these Warrants (A) at least twenty (20) days' (but not more than ninety (90)
days) prior written notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of such issuance,
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (B) in the case of any such issuance,
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, at least twenty (20) days' (but not more than ninety
(90) days) prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (A) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which the holders of any securities shall be entitled thereto, and such notice
in accordance with the foregoing clause (B) shall also specify the date on which
the holders of any securities shall be entitled to exchange their securities for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, as the case may be.
(f) Company to Prevent Dilution. If any event or condition occurs as
---------------------------
to which other provisions of this paragraph 4 are not strictly applicable or if
strictly applicable would not fairly protect the exercise or purchase rights of
these Warrants in accordance with the essential intent and principles of such
provisions, or which might materially and adversely affect the exercise or
purchase rights of the Warrant holders under any provision of these Warrants,
then the Company shall make an adjustment in the application of such provisions,
in accordance with such essential intent and principles, so as to protect such
exercise and purchase rights as aforesaid, and any adjustment necessary with
respect to the Exercise Price and the number of
- 6 -
<PAGE>
Warrants represented hereby so as to preserve without dilution the rights of the
holders of Warrants.
5. Definitions. The terms defined in this paragraph, whenever used in
-----------
this Warrant Certificate, shall, unless the context otherwise requires, have the
respective meanings hereinafter specified:
(a) "Common Stock" shall mean and include the Company's Common Stock,
------------
$.01 par value, and shall also include in case of any reorganization,
reclassification, consolidation, merger or sale of assets of the character
referred to in paragraph 4(d) hereof, the stock, securities or assets provided
for in such paragraph.
(b) "Company" shall mean Memry Corporation and also include any
-------
successor thereto with respect to the obligations hereunder, by merger,
consolidation or otherwise.
(c) "Final Exercise Date" shall mean December 15, 1999.
-------------------
(d) "Warrant Certificate" shall mean this instrument evidencing the
-------------------
Warrants issued to the Warrant holder on this date.
(e) "Warrants" shall mean the Warrants represented by this Warrant
--------
Certificate and all Warrants issued in exchange, transfer or replacement or
hereof or thereof.
(f) "Warrant Shares" shall mean the shares of Common Stock purchased
--------------
or purchasable by the holders of Warrants upon the exercise thereof pursuant to
paragraph 1.
(g) "Warrant holder(s)" shall mean the registered holder(s) of the
-----------------
Warrants.
6. Exchange, Replacement and Assignability. This Warrant Certificate is
---------------------------------------
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company described in paragraph 1, for new Warrant Certificates of
like tenor and date representing in the aggregate the right to purchase the
number of Warrant Shares which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of Warrant Shares as
shall be designated by such holder hereof at the time of such surrender. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant Certificate or any such new Warrant Certificates
and, in the case of any such loss, theft or destruction, of a bond of indemnity
or other security satisfactory to the Company, or, in the case of any such
mutilation, upon surrender or cancellation of such mutilated Warrant
Certificate, the Company will issue to the holder hereof a new Warrant
Certificate of like tenor and date, in lieu of this Warrant Certificate or such
new Warrant Certificates, representing the right to purchase the number of
Warrant Shares
- 7 -
<PAGE>
which may be purchased hereunder. Subject to compliance with paragraph 2 and
the provisions of the Purchase Agreement, this Warrant and all rights hereunder
(including without limitation all registration rights) are transferable in whole
or in part upon the books of the Company by the registered holder hereof in
person or by duly authorized attorney, and a new Warrant Certificate shall be
made and delivered by the Company, of the same tenor and date as this Warrant
Certificate but registered in the name of the transferee, upon surrender of this
Warrant Certificate, duly endorsed, to the office or agency of the Company. All
expenses, taxes (other than stock transfer taxes, which shall be the obligation
of the Warrant holder) and other charges payable in connection with the
preparation, execution and delivery of Warrants pursuant to this paragraph 6
shall be paid by the Company.
7. No Rights as Stockholder; Survival of Rights. Neither this Warrant
--------------------------------------------
Certificate nor the Warrant represented hereby shall entitle the holder hereof
to any voting rights or any rights as a stockholder of the Company. The rights
and obligations of the Company, of the holder of these Warrants and of any
holder of Warrant Shares issued upon exercise of these Warrants shall survive
the exercise of these Warrants.
8. Governing Law; Amendments and Waivers; Headings. The validity,
-----------------------------------------------
interpretation and performance of this Warrant Certificate and each of its terms
and provisions shall be governed by the laws of the State of Connecticut. No
provision of this Warrant Certificate may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
enforcement of the same is sought. The headings in this Warrant Certificate are
for purposes of reference only and shall not affect the meaning or construction
of any of the provisions hereof.
9. Notices. Any notice or other document required or permitted to be
-------
given or delivered to Warrant holders shall be delivered at, or sent by
certified or registered mail to each Warrant holder at, the address shown or to
such other address as shall have been furnished to the Company by such Warrant
holder. Any notice or other document required or permitted to be given or
delivered to the Company shall be delivered at, or sent by certified or
registered mail to the principal office of the Company at 57 Commerce Drive,
Brookfield, Connecticut 06804 Attention: President, or such other address as
shall have been furnished to the Warrant holders by the Company.
- 8 -
<PAGE>
IN WITNESS WHEREOF, Memry Corporation has caused this Warrant Certificate
to be signed by its duly authorized officer under its corporate seal, duly
attested by its authorized officer, and to be dated as of December 23, 1994.
MEMRY CORPORATION
By: /s/ James G. Binch
--------------------------------
Title: President
[Corporate Seal]
ATTEST:
/s/ Wendy A. Gavaghan
- -----------------------------
Secretary
- 9 -
<PAGE>
NOTICE OF ELECTION
TO: MEMRY CORPORATION
The undersigned, the registered holder of Warrant Cert. No. 94-3, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
Certificate for, and to purchase thereunder, ____________________ shares of
Common Stock of Memry Corporation and herewith makes payment of U.S.____________
therefor, and requests that the certificate for the Common Stock, which will be
issued in the following name, be delivered to the attention of the undersigned
at the following address:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Date:______________________
Name:______________________________
By:________________________________
Title:_____________________________
- 10 -
<PAGE>
Exhibit 10.51
Investor: _____________________________________________
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of December 21, 1994, by and
among MEMRY CORPORATION, a corporation formed under the laws of the State of
Delaware, with its principal office at 57 Commerce Drive, Brookfield,
Connecticut 06804 (the "Company"), and the investor whose name is set forth at
the top of this page ("Investor").
RECITALS
--------
1. The Company desires to issue in an unregistered securities offering
at least 100,000 and up to 200,000 shares of the Company's Common Stock, par
value $.01 per share at a purchase price of $1.75 per share (the "Common
Stock"), along with an equal number of warrants to purchase one additional share
of Common Stock at an exercise price of $2.00 per share in the form annexed
hereto ("Warrants"; the Common Stock and the Warrants collectively constituting
the "Securities"), on the terms and conditions set forth in this Agreement.
2. Investor desires to purchase the number of shares of the Common
Stock set forth below, along with an equal numbers of Warrants, on the terms and
conditions set forth in this Agreement.
- ----------------------------------------------------------------------------
THE SECURITIES SOLD HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 , AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON EXEMPTIONS
THEREUNDER. THE SALE OR OTHER DISPOSITION OF THE SECURITIES SOLD HEREBY MAY ONLY
BE MADE PURSUANT TO A REGISTRATION UNDER THAT ACT AND THOSE LAWS OR PURSUANT TO
AN EXEMPTION FROM SUCH REGISTRATION. NO OFFER, SALE, OR OTHER DISPOSITION OF
THESE SECURITIES MAY BE MADE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF
AMERICA (INCLUDING ITS TERRITORIES OR POSSESSIONS) OR TO NATIONALS OR RESIDENTS
THEREOF EXCEPT IN ACCORDANCE WITH THAT ACT, THOSE LAWS, THE RULES THEREUNDER,
AND THIS AGREEMENT.
THE SECURITIES COVERED HEREBY ARE BEING OFFERED IN RELIANCE UPON REGULATION S
UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED AND SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (1) AS PART OF
THEIR DISTRIBUTION AT ANY TIME OR (2) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF
THE COMMENCEMENT OF THE OFFERING AND THE CLOSING DATE, EXCEPT IN EITHER CASE IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. TERMS USED IN THIS
PARAGRAPH HAVE THE MEANING GIVEN TO THEM BY REGULATION S.
(1)
<PAGE>
AGREEMENT
In consideration of the foregoing, and of the mutual promises
contained herein, the Company and Investor hereby agree as follows:
1. Purchase and Delivery. Investor agrees to purchase 116,667 shares
of the Common Stock for a purchase price of $1.50 per share along with an equal
number of Warrants, (for a total purchase price of $175,000). The Company shall
execute and deliver to Investor at Investor's address set forth on the signature
page hereof a certificate representing the Common Stock purchased by Investor
within 20 days of the date of the acceptance of this Agreement by the Company.
2. Representations and Warranties of Investor. Investor hereby
represents and warrants to the Company, and acknowledges and intends that the
Company rely thereon, as follows:
(a) Investor will not sell, assign, pledge, transfer, or otherwise
dispose of, whether directly or indirectly, all or a portion of the Investor's
Securities to any person or entity without complying with applicable securities
laws and the transaction restrictions set forth in Section 4 hereof;
(b) Investor is acquiring the Securities for Investor 's own account,
for investment purposes only and not with a view to any distribution of such
Securities and no other person has a direct or indirect beneficial interest in
such Securities;
(c) Investor acknowledges and agrees that the Company has informed
Investor that the Securities are not registered under any securities laws, the
Securities are subject to substantial restrictions on transfer, and the
Securities may not be transferred for an indefinite period of time;
(d) Investor has investigated the purchase of the Securities to the
extent Investor deems necessary or desirable, and the Company has provided
Investor with any assistance in connection therewith which Investor has
requested. Investor or Investor's Purchaser Representative(s) has such knowledge
and experience in financial and business matters that Investor is capable of
evaluating the merits and risks of the acquisitions of the Securities and of
making an informed investment decision with respect thereto and Investor has the
ability to bear the economic risk of an investment in the Company and to
withstand a complete loss of it s investment. Investor is financially able to
hold the Securities for an indefinite period of time;
(e) Investor is not relying on the Company or any of its directors,
officers, employees, or agents for guidance with respect
(2)
<PAGE>
to tax and other applicable laws of any jurisdiction, or other economic
considerations, and Investor has been furnished by the Company with all
information Investor has deemed necessary or appropriate in order to form an
informed investment decision concerning the purchase of the Securities. Investor
has been afforded an opportunity to ask questions of, and receive answers from,
representatives of the Company concerning the terms and conditions of Investor's
purchase of the Securities and has been afforded the opportunity to obtain any
additional information (to the extent the Company had such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of information otherwise furnished by the Company;
(f) Unless Investor completed and delivered a Purchaser Representative
Questionnaire, Investor has not used a Purchaser Representative;
(g) If Investor has delivered a Purchaser Representative
Questionnaire, Investor represents that the Purchaser Representative about whom
information has been furnished on such Questionnaire is the person who has
advised Investor in connection with an evaluation of the merits and risks of
Investor's investing in the Units and is Investor's Purchaser Representative;
(h) Investor understands that no United States federal or state agency
or any agency of any other government has passed upon or made any recommendation
or endorsement of any investment in the Company;
(i) Investor is not a United States Person (as defined in Section 4
hereof) and Investor's principal residence (if Investor is an individual) or
Investor's principal office (if Investor is an organization) is presently at the
address designated on the signature page hereof;
(j) If Investor is an organization, Investor; (i) has not been
organized for the purpose of purchasing the Securities, or (ii) has been
organized for the purpose of purchasing the Securities and has made the
representations and warranties contained in this Agreement with respect to and
on behalf of all of the beneficial owners thereof;
(k) If Investor is an organization, that (i) this Agreement and the
transactions contemplated hereby have been duly authorized by all necessary
directors, officers, trustees, partners, or other necessary persons of investor
and will not violate any agreement to which Investor is a party; (ii) the
undersigned natural person executing this Agreement on behalf of Investor has
the requisite right, power, capacity, and authority under Investor's governing
instruments, a copy of which shall be provided to the Company at its request, to
enter into this Agreement; (iii) this Agreement will be binding on and
enforceable
(3)
<PAGE>
against Investor in accordance with its terms; and (iv) the undersigned natural
person, as well as Investor, will be fully subject to the provisions of
Paragraph 3.
(1) Investor is an "accredited investor" as such term is defined in
Rule 501 adopted pursuant to the United States Securities Act of 1933, as
amended (the "Securities Act").
3. Indemnification. Investor hereby indemnifies, and agrees to hold
---------------
harmless, the Company, each corporation and entity affiliated with the Company,
and the shareholders, partners, officers, directors, employees, professional
advisors, and agents of each of the foregoing, from and against any and all
loss, damage, liability or expense, including reasonable attorneys' fees and
other legal expenses, which the indemnified party may incur by reason of or in
connection with, any misrepresentation made by Investor, any breach of any of
Investor's representations and warranties, or Investor's failure to fulfill any
of its covenants or agreements under this Agreement.
4. Transaction Restrictions. The Investor understands and
------------------------
acknowledges that the Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Investor represents that, until
40 days after the later of the commencement of the offering and the Closing
Date, it will offer or sell the Securities only in accordance with Rule 903 of
Regulation S under the Securities Act. Accordingly, the Investor represents,
warrants and covenants that it is not a U.S. person and neither it, its
affiliates nor any persons acting on its or their behalf have engaged or will
engage in any directed selling efforts in the United States with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Terms used in this paragraph 4 have
the meanings given to them by Regulation S.
5. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, U.S.A., without regard to its
conflicts of law rules or principles. The parties acknowledge, however, that
they have executed and delivered this Agreement in ___________________ and that
the sale of the Securities has occurred in ___________________.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to Investor's purchase of the Securities, and no
amendment, alteration,
(4)
<PAGE>
or modification of this Agreement shall be valid, unless such amendment,
alteration, or modification is expressed in a written instrument duly executed
by Investor and the Company.
(c) This Agreement shall insure to the benefit of and be binding upon
the successors, assigns, legal representatives, executors, and/or administrator
of Investor and the Company, but shall not be assignable by Investor.
(d) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(e) If any of the provisions contained herein shall be deemed to be
unenforceable for any reason, the parties hereto agree this Agreement shall be
interpreted so as to be enforceable to the greatest extent possible.
(f) Investor's representations, warranties, and indemnification
obligations contained herein shall survive the acceptance hereof.
(5)
<PAGE>
SIGNATURE PAGE - INDIVIDUALS ONLY
(ORGANIZATIONS ON FOLLOWING PAGE)
_____________________________
Name(s) of Investor (s)
(Please print)
_____________________________
Signature of Investor (s)
_____________________________
Signature of Joint Investor
(if any)
Home Address:__________________________________________________
_________________________________________________________________
Home telephone Number:___________________________________________
Occupation:______________________________________________________
- -------------------------------------------------------------------
ACCEPTED:
MEMRY CORPORATION
By:_________________________________________
Title:______________________________________
Date:_______________________________________
At:_________________________________________
(6)
<PAGE>
SIGNATURE PAGE - ORGANIZATIONS ONLY
(INDIVIDUALS ON PREVIOUS PAGE)
BANQUE POUR L'INDUSTRIE
-------------------------
FRANCAISE REF GAN.
-------------------
-------------------------
Names(s) of Investor
(Please Print)
/s/ S. DRINGENBERG
-------------------------
/s/ E. SOBCZAK
-------------------------
Signature of Authorized
Representative of Investor
Type of Organization (e.g., Corporation, Trust, Limited Partnership, General
Partnership):
____________________________________________________________________
Date of Formation or Incorporation:_________________________________
Jurisdiction of Formation or Incorporation:_________________________
Type of Business:___________________________________________________
Address of Principle Office:________________________________________
- --------------------------------------------------------------------------------
Business Telephone Number: _________________________________________
List any other person(s) who should receive copies of correspondence sent to the
organization, if any:
Name:_______________________________________________________________
Address:____________________________________________________________
- --------------------------------------------------------------------
ACCEPTED:
MEMRY CORPORATION
By:/s/ James G. Binch
----------------------
Title: President & CEO
-------------------
Date: 12/16/94
--------------------
At: Brookfield, Ct. 06804
---------------------
4776b
(7)
<PAGE>
Exhibit 10.52
Investor: Banque pour L'Industrie Francaise (ref: GAN)
--------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of May 22, 1995, by and among MEMRY
CORPORATION, a corporation formed under the laws of the State of Delaware, with
its principal office at 57 Commerce Drive, Brookfield, Connecticut 06804 (the
"Company"), and the investor whose name is set forth at the top of this page
("Investor").
RECITALS
--------
1. The Company desires to issue in an unregistered securities offering
307,690 shares of the Company's Common Stock, par value $.01 per share at a
purchase price of $0.65 per share (the "Common Stock," or, the "Securities"), on
the terms and conditions set forth in this Agreement.
2. Investor desires to purchase the number of shares of the Common Stock
set forth below, on the terms and conditions set forth in this Agreement.
- --------------------------------------------------------------------------------
THE SECURITIES SOLD HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 , AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON EXEMPTIONS
THEREUNDER. THE SALE OR OTHER DISPOSITION OF THE SECURITIES SOLD HEREBY MAY ONLY
BE MADE PURSUANT TO A REGISTRATION UNDER THAT ACT AND THOSE LAWS OR PURSUANT TO
AN EXEMPTION FROM SUCH REGISTRATION. NO OFFER, SALE, OR OTHER DISPOSITION OF
THESE SECURITIES MAY BE MADE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF
AMERICA (INCLUDING ITS TERRITORIES OR POSSESSIONS) OR TO NATIONALS OR RESIDENTS
THEREOF EXCEPT IN ACCORDANCE WITH THAT ACT, THOSE LAWS, THE RULES THEREUNDER,
AND THIS AGREEMENT.
THE SECURITIES COVERED HEREBY ARE BEING OFFERED IN RELIANCE UPON REGULATION S
UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED AND SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (1) AS PART OF
THEIR DISTRIBUTION AT ANY TIME OR (2) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF
THE COMMENCEMENT OF THE OFFERING AND THE CLOSING DATE, EXCEPT IN EITHER CASE IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. TERMS USED IN THIS
PARAGRAPH HAVE THE MEANING GIVEN TO THEM BY REGULATION S.
(1)
<PAGE>
AGREEMENT
In consideration of the foregoing, and of the mutual promises contained
herein, the Company and Investor hereby agree as follows:
1. Purchase and Delivery. Investor agrees to purchase 307,960 shares of the
Common Stock for a purchase price of $0.65 per share. The Company shall execute
and deliver to Investor at Investor's address set forth on the signature page
hereof a certificate representing the Common Stock purchased by Investor within
60 days of the date of the acceptance of this Agreement by the Company.
2. Representations and Warranties of Investor. Investor hereby represents
and warrants to the Company, and acknowledges and intends that the Company rely
thereon, as follows:
(a) Investor will not sell, assign, pledge, transfer, or otherwise dispose
of, whether directly or indirectly, all or a portion of the Investor's
Securities to any person or entity without complying with applicable securities
laws and the transaction restrictions set forth in Section 4 hereof;
(b) Investor is acquiring the Securities for Investor's own account, for
investment purposes only and not with a view to any distribution of such
Securities and no other person has a direct or indirect beneficial interest in
such Securities;
(c) Investor acknowledges and agrees that the Company has informed Investor
that the Securities are not registered under any securities laws, the Securities
are subject to substantial restrictions on transfer, and the Securities may not
be transferred for an indefinite period of time;
(d) Investor has investigated the purchase of the Securities to the extent
Investor deems necessary or desirable, and the Company has provided Investor
with any assistance in connection therewith which Investor has requested.
Investor or Investor's Purchaser Representative(s) has such knowledge and
experience in financial and business matters that Investor is capable of
evaluating the merits and risks of the acquisitions of the Securities and of
making an informed investment decision with respect thereto and Investor has the
ability to bear the economic risk of an investment in the Company and to
withstand a complete loss of it s investment. Investor is financially able to
hold the Securities for an indefinite period of time;
(2)
<PAGE>
(e) Investor is not relying on the Company or any of its directors,
officers, employees, or agents for guidance with respects to tax and other
applicable laws of any jurisdiction, or other economic considerations, and
Investor has been furnished by the Company with all information Investor has
deemed necessary or appropriate in order to form an informed investment decision
concerning the purchase of the Securities. Investor has been afforded an
opportunity to ask questions of, and receive answers from, representatives of
the Company concerning the terms and conditions of Investor's purchase of the
Securities and has been afforded the opportunity to obtain any additional
information (to the extent the Company had such information or could acquire it
without unreasonable effort or expense) necessary to verify the accuracy of
information otherwise furnished by the Company;
(f) Unless Investor completed and delivered a Purchaser Representative
Questionnaire, Investor has not used a Purchaser Representative;
(g) If Investor has delivered a Purchaser Representative
Questionnaire, Investor represents that the Purchaser Representative about whom
information has been furnished on such Questionnaire is the person who has
advised Investor in connection with an evaluation of the merits and risks of
Investor's investing in the Units and is Investor's Purchaser Representative;
(h) Investor understands that no United States federal or state agency
or any agency of any other government has passed upon or made any recommendation
or endorsement of any investment in the Company;
(i) Investor is not a United States Person (as defined in Section 4
hereof) and Investor's principle residence (if Investor is an individual) or
Investor's principle office (if Investor is an organization) is presently at the
address designated on the signature page hereof;
(j) If Investor is an organization, Investor; (i) has not been
organized for the purpose of purchasing the Securities, or (ii)has been
organized for the purpose of purchasing the Securities and has made the
representations and warranties contained in this Agreement with respect to and
on behalf of all of the beneficial owners thereof;
(k) If Investor is an organization, that (i) this Agreement and the
transactions contemplated hereby have been duly authorized by all necessary
directors, officers, trustees, partners, or other necessary persons of investor
and will not violate any agreement to which Investor is a party; (ii) the
undersigned natural person executing this Agreement on behalf of Investor has
the requisite right, power, capacity, and authority under Investor's governing
instruments, a copy of which shall be provided to the Company at its request, to
enter into this Agreement; (iii) this Agreement will be binding on and
enforceable against Investor in accordance
(3)
<PAGE>
with its terms; and (iv) the undersigned natural person, as well as investor,
will be fully subject to the provisions of Paragraph 3.
(1) Investor is an "accredited investor" as such term is defined in
Rule 501 adopted pursuant to the United States Securities Act of 1933, as
amended (the "Securities Act").
3. Indemnification. Investor hereby indemnifies, and agrees to hold
---------------
harmless, the Company, each corporation and entity affiliated with the Company,
and the shareholders, partners, officers, directors, employees, professional
advisors, and agents of each of the foregoing, from and against any and all
loss, damage, liability or expense, including reasonable attorneys fees and
other legal expenses, which the indemnified party may incur by reason of or in
connection with, any misrepresentation made by Investor, any breach of any of
Investor's representations and warranties, or Investor's failure to fulfill any
of its covenants or agreements under this Agreement.
4. Transaction Restrictions. The Investor understands and
------------------------
acknowledges that the Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Investor represents that, until
40 days after the later of the commencement of the offering and the Closing
Date, it will offer or sell the Securities only in accordance with Rule 903 of
Regulation S under the Securities Act. Accordingly, the Investor represents,
warrants and covenants that it is not a U.S. person and neither it, its
affiliates nor any persons acting on its behalf have engaged or will engage in
any directed selling efforts in the United States with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Terms used in this paragraph 4 have
the meaning given to them by Regulation S.
5. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, U.S.A., without regard to its
conflicts of law rules or principles. The parties acknowledge, however, that
they have executed and delivered this agreement in ___________________, and that
the sale of the Securities has occurred in ___________________.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to Investor's purchase of the Securities, and no
amendment, alteration, or modification of this Agreement shall be valid, unless
such amendment, alteration, or modification is expressed in a written instrument
duly executed by Investor and the Company.
(c) This Agreement shall insure to the benefit of and be
(4)
<PAGE>
binding upon the successors, assigns, legal representatives, executors, and/or
administrator of Investor and the Company, but shall not be assignable by
Investor.
(d) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(e) If any of the provisions contained herein shall be deemed to be
unenforceable for any reason, the parties hereto agree this Agreement shall be
interpreted so as to be enforceable to the greatest extent possible.
(f) Investor's representations, warranties, and indemnification
obligations contained herein shall survive the acceptance hereof.
(5)
<PAGE>
SIGNATURE PAGE - INDIVIDUALS ONLY
(ORGANIZATIONS ON FOLLOWING PAGE)
_____________________________
Name(s) of Investor (s)
(Please print)
_____________________________
Signature of Investor (s)
_____________________________
Signature of Joint Investor
(if any)
Home Address:__________________________________________________
_________________________________________________________________
Home telephone Number:___________________________________________
Occupation:______________________________________________________
- -------------------------------------------------------------------
ACCEPTED:
MEMRY CORPORATION
By:_________________________________________
Title:______________________________________
Date:_______________________________________
At:_________________________________________
(6)
<PAGE>
SIGNATURE PAGE - ORGANIZATIONS ONLY
(INDIVIDUALS ON PREVIOUS PAGE)
Banque pour L'Industrie
----------------------------
Francaise
----------------------------
Names(s) of Investor
(Please Print)
/s/ S. Dringenberg
----------------------------
/s/ E. Sobczak
----------------------------
Signature of Authorized
Representative of Investor
Type of Organization (e.g., Corporation, Trust, Limited Partnership,General
Partnership):
_________________________________________________________________
Date of Formation or Incorporation:______________________________
Jurisdiction of Formation or Incorporation:______________________
Type of Business: Banque
------------------------------------------------
Address of Principle Office:26 rue Laffitte
-------------------------------------
75009 Paris - France
- -----------------------------------------------------------------
Business Telephone Number: 42 47 79 75
---------------------------------------
List any other person(s) who should receive copies of correspondence sent to the
organization, if any:
Name:____________________________________________________________
Address:_________________________________________________________
_________________________________________________________________
- -------------------------------------------------------------------
ACCEPTED:
MEMRY CORPORATION
By:/s/ James G. Binch
----------------------------------
Title:______________________________
Date:_______________________________
At:_________________________________
4776b
(7)
<PAGE>
Exhibit 10.53
SECURITIES PURCHASE AGREEMENT
-----------------------------
MEMRY CORPORATION
JUNE 21, 1995
<PAGE>
SECURITIES PURCHASE AGREEMENT
-----------------------------
THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made as of the 21st day
of June, 1995 by and between MEMRY CORPORATION, a Delaware corporation (the
"Company"), and Dr. Nicholas Grant, an investor with an address at 10 Leslie
Road, Winchester, MA 01890 (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Securities.
-------------------------------
1.1. Sale and Issuance of Securities. Subject to the terms and
-------------------------------
conditions of this Agreement, on the Closing Date (defined below) the Investor
agrees to purchase and the Company agrees to sell and issue to the Investor
Fifteen Thousand Three Hundred Eighty-Four (15,384) shares of the Company's
Common Stock for a purchase price of Ten Thousand Dollars ($10,000.00), being
$0.65 per share (the "Closing"). The shares of the Company's Common Stock
purchased pursuant to this Section 1.1 are hereinafter referred to as the
"Shares" and the "Securities," and the purchase price paid pursuant to this
Section 1.1 is hereinafter referred to as the "Purchase Price."
1.2 Closing.
-------
(a) The Closing shall take place at the offices of Finn Dixon & Herling,
Stamford, Connecticut, on later than June 30, 1995 (the "Closing Date").
(b) At the Closing the Company shall deliver to the Investor a certificate
representing the appropriate number of shares of Common Stock which the Investor
is purchasing against delivery to the Company by such Investor of a check in the
amount applicable portion of the Purchase Price to be paid at such Closing.
2. Representations and Warranties of the Investor. Investor hereby
----------------------------------------------
represents and warrants to the Company and acknowledges and intends that the
Company rely thereon, as follows:
(a) Investor will not sell, assign, pledge, transfer, or otherwise dispose
of, whether directly or indirectly, all or any portion of the Securities
purchase hereby to any person or entity without complying with applicable
securities laws;
(b) Investor is acquiring the Securities for Investor's own account, for
investment purposes only and not with a view to any distribution of such
Securities;
<PAGE>
- 2 -
(c) Investor acknowledges and agrees that the Company has informed Investor
that the Securities are not registered under any securities laws, and,
therefore, that (absent registration under or exemption from applicable
securities laws) the Securities are subject to substantial restrictions on
transfer and the Securities may not be transferred for an indefinite period of
time;
(d) Investor has investigated the purchase of the Securities to the extent
Investor deems necessary or desirable, and the Company has provided Investor
with any assistance in connection therewith which Investor has requested.
Investor has such knowledge and experience in financial and business matters
that Investor is capable of evaluating the merits and risks of the acquisition
of the Securities and of making an informed investment decision with respect
thereto and Investor has the ability to bear the economic risk of an investment
in the Company and to withstand a complete loss of its investment. Investor is
financially able to hold the Securities for an indefinite period of time;
(e) Investor is not relying on the Company or any of its directors,
officers, employees, or agents for guidance with respect to tax and other
applicable laws of any jurisdiction, or other economic considerations, and
Investor has been furnished by the Company with all information Investor has
deemed necessary or appropriate in order to form an informed investment decision
concerning the purchase of the Securities. Investor has been afforded an
opportunity to ask questions of, and receive answers from representatives of the
Company concerning the terms and conditions of Investor's purchase of the
Securities and has been afforded the opportunity to obtain any additional
information (to the extent of the Company had such information or could acquire
it without unreasonable effort or expense) necessary to verify the accuracy of
information otherwise furnished by the Company;
(f) Investor understands that no United States federal or state agency or
any agency of any other government has passed upon or made any recommendation or
endorsement of any investment in the Company;
(g) Investor has not been organized for the purpose of purchasing the
Securities; and
(h) Investor understands that the certificates evidencing the Shares will
bear a legend stating in substance:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTER UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED,
<PAGE>
- 3 -
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH SALE, OFFER FOR SALE, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION DOES NOT VIOLATE THE PROVISIONS OF SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT."
provided, however that the Company agrees to cause such legend to be removed
from any certificates representing the Shares after such Shares have been
transferred pursuant to an effective registration under the Securities Act of
1933 or an available exemption under Section 4(1) of that Act, or Rule 144,
promulgated thereunder.
3. Registration. The Company covenants and agrees as follows:
------------
3.1 Definitions. For purposes of this Section 3:
-----------
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means (1) the Shares, and (2)
any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such Shares, excluding in all cases, however, any Registrable Securities sold by
a person in a transaction in which its rights under this Section 4 are not
assigned;
(c) The number of shares of "Registrable Securities then outstanding"
shall be the number of shares of Common Stock outstanding which are, and the
number of shares of Common Stock issuable pursuant to exercisable or convertible
securities which are, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 3.10 hereof; and
(e) The term "Form S-1" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted by
the SEC which permits inclusion or
<PAGE>
- 4 -
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
3.2 Registration.
------------
(a) The Company shall use its best efforts to effect the registration
under the Act of all Registrable Securities within forty-five days after the
availability of audited financial statements for its fiscal year ending June 30,
1995, but in no event later than December 31, 1995.
(b) If the Holders intend to distribute the Registrable Securities
covered by the registration by means of an underwriting, they shall so advise
the Company. All Holders proposing to distribute their securities through such
underwriting ("Participating Holders") shall (together with the Company as
provided in subsection 3.3(e)) enter into an underwriting agreement in customary
from with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Participating Holders. Notwithstanding any other
provision of this Section 3.2, if the underwriter advises the Participating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all
Participating Holders thereof in proportion (as nearly as practicable) to the
amount of Registrable Securities of the Company owned by each Participating
Holder.
(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders a certificate signed by the President of the Company stating that the
Company is engaged in an activity which, in the good faith judgement of the
Board of Directors of the Company, would be adversely affected by the requested
registration to the material detriment of the Company, then the Company shall
have the right to defer such filing for a period of not more than four months,
provided that such right may not be exercised more than once.
3.3 Obligations of the Company. Whenever required under this Section
--------------------------
3 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective until all of the Registrable Securities shall have been sold by the
Investor;
<PAGE>
- 5 -
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of the securities covered by such
registration statement;
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders to
enable the Holders to consummate the disposition in such jurisdictions of such
securities, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering, (each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement);
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading in the light of the circumstances then existing; and
(g) Furnish, at the request of any Holder, on the date that such
Holder's Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 3, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes
<PAGE>
- 6 -
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders and (ii) a letter, dated such date, from the
independent public accountants of the Company, in form and substance as is
customarily given by independent public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and the
Holders.
3.4 Obligations of Selling Holders.
------------------------------
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 3 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company in writing such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(b) The Holders of Registrable Securities included in the registration
statement will not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus.
3.5 Expenses of Registration. All expenses other than underwriting
------------------------
discounts and commissions incurred in connection with registrations, filings, or
qualifications pursuant to Section 3.2, including (without limitation) all
registration,, filing and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company, transportation expenses,
mailing expenses, and the fees and disbursements of counsel for the selling
Holders shall be borne and paid by the Company.
3.6 Underwriting Requirements. In connection with any offering
-------------------------
involving an underwriting of shares being issued by the Company, the Company
shall not be required to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between he Company and the underwriters selected by it, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize to success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of Securities to be sold other than by the Company
that the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that
<PAGE>
- 7 -
number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling Holders
according to the total amount of securities entitled to be included therein
owned by each selling Holder or in such other proportions as shall mutually be
agreed to by such selling Holders).
3.7 Delay of Registration. No Holder shall have any right to obtain
---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
3.8 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Section 3:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder requesting to join in such registration, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act") against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements made therein not misleading, or (iii) any violation or
alleged violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities law applicable to the Company in connection with any such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonable incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided however,
that the indemnity agreement contained in this subsection 3.8(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company
<PAGE>
- 8 -
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 3.8(b) in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 4.8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
3.8 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 3, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnified party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by
<PAGE>
- 9 -
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
3.8, but omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 3.8 mutually satisfactory to the parties;
provide, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
3.8, but omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnifed party
otherwise than under this Section 3.8.
(d) The obligations of the Company and Holders under this Section 3.8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 3, and otherwise.
3.9 Reports Under Securities Exchange Act of 1934. With a view to
---------------------------------------------
making available tot he Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-1, the Company agrees on and after the
Closing to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) Use its best efforts to enable the Holders to utilize Form S-
1 for the sale of their Registrable Securities;
(c) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
<PAGE>
- 10 -
(d) Furnish to any Holder, so long as the Holder owns Registrable
Securities representing two percent (2%) or more of the Company's Common Stock,
(i) forthwith upon request a written statement by the Company that it has
complied with the reporting requirements of SEC Rule 144, the Act and the 1934
Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-1 (at any time after it so qualifies), (ii) substantially
concurrently with the filing thereof, copies of the annual and quarterly reports
of the Company filed with the SEC and such other reports and documents so filed
by the Company, (iii) as soon as they shall become available to the Company, any
and all audited financial statements of the Company and management letters from
the Company's independent auditors and the Company's response thereto, and (iv)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
3.10 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 3 may be
assigned by a Holder to a transferee or assignee of such securities provided the
Company is, prior to or simultaneously with such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provide, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
3.11 Amendment of Registration Rights. Any provision of this Section
--------------------------------
3 may be amended and the observance thereof 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 a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph 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.
4. Miscellaneous.
-------------
4.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing shall in no way be
<PAGE>
- 11 -
affected by any investigation of the subject matter thereof made by or on behalf
of the Investor or the Company.
4.2 Successors and Assigns. The terms and conditions of this
----------------------
agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
4.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Connecticut as applied to agreements among
Connecticut residents entered into and to be performed entirely within
Connecticut.
4.4 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.
4.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this agreement.
4.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
48 hours after deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties, (iii) upon transmission of a confirmed telecopy to such party
at a telecopier number furnished by such party for such purpose, or (iv) upon
delivery to such address by Federal Express or other courier service.
4.8 Amendments and Waivers. Except as specified in Section 3.11, any
----------------------
term of this Agreement may be amended and the observance of any term 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 a majority of the outstanding Shares. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this
<PAGE>
- 12 -
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.
4.9 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
4.10 Indemnification.
---------------
(a) The Company shall, with respect to the representations,
warranties, covenants and agreements made by the Company herein, indemnify,
defend and hold the Investor harmless against all liability, loss or damage,
together with all reasonable costs and expenses related thereto (including legal
and accounting fees and expenses), arising from the untruth, inaccuracy or
breach of any such representations, warranties, covenants or agreements of the
Company.
(b) The Investor shall, with respect to the representations,
warranties, covenants and agreements made by the Investor herein, indemnify,
defend and hold the Company harmless against all liability, loss or damage,
together with all reasonable costs and expenses related thereto (including legal
and accounting fees and expenses), arising from the untruth, inaccuracy or
breach of any such representations, warranties, covenants or agreements of the
Investor.
4.11 Remedies. In case any one or more of the covenants and/or
--------
agreements set forth in this Agreement shall have been breached by the Company,
the Investor may proceed to protect and enforce its or their rights either by
suit in equity and/or by action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement. A
party acting pursuant to this Section 4.11 shall be indemnified against all
liability, loss or damage, together with all reasonable costs and expenses
related thereto (including legal and accounting fees and expenses) in accordance
with Section 4.10.
4.12 Nouns and Pronouns. Whenever the context may require, any
------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice versa.
<PAGE>
- 13 -
4.13 Information to be provided by Investor. Investor agrees to
--------------------------------------
provide to the Company such information as the Company may reasonably request in
order to make accurate and timely required filings and disclosures to its
stockholders and to federal, state and self-regulatory agencies.
4.14 Confidentiality. Any information provided to Investor pursuant
---------------
to this Agreement shall be used by the Investor solely for, and will only be
disclosed to Investor's officers, employees, agents and professional advisors
who need to know such information and who will use such information solely for,
the purpose of evaluating the Investor's investment in the Company and in
furtherance of its interests as an investor in the Company, and the Investor
will, and will cause such officers, employees, agents and professional advisors
to, maintain the confidentiality of all non-public information of the Company
obtained pursuant to this Agreement which is designated by the Company as
confidential and which could not otherwise be legally and legitimately obtained
by the Investor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MEMRY CORPORATION
57 Commerce Drive
Brookfield, Connecticut 06804
By: /s/ James G. Binch
-----------------------------
James G. Binch, President
INVESTOR
/s/ Nicholas J. Grant
------------------------------
Name:
Title, if appropriate:
<PAGE>
Exhibit 10.54
MEMRY CORPORATION AND SUBSIDIARIES
EMPLOYEE AGREEMENT ON
INVENTIONS AND PATENTS
Agreement made between Memry Corporation (and Subsidiaries), hereinafter
referred to as "Company" and James G. Binch, hereinafter referred to an
"Employee".
In consideration of the employment or continued employment of Employee by
Company, the parties agree as follows:
1) Employee will or may have possession of or access to facilities, apparatus,
equipment, drawings, systems, formulae, reports, manuals, invention
records, customer lists, computer programs, or other material embodying
trade secrets or confidential technical or business information of Company
or its Affiliates. Employee therein agrees not to use any such information
or material for himself or others, and not to take any such material or
reproductions thereof from the Company, at any time during or after
employment by the Company, except as required in Employee's duties to the
Company. Employee agrees immediately to return all such material and
reproductions thereof in his possession to the Company upon request and in
any event upon termination of employment.
2) Except with prior written authorization by the Company, Employee agrees not
to disclose or publish any trade secret or confidential technical or
business information or material of the Company or its affiliates, or of
another party to whom the Company owes an obligation of confidence, at any
time during or after employment by the Company.
3) Employee shall promptly furnish to the Company a complete record of any and
all inventions, patents and improvements, whether patentable or not, that
relate in any way to the actual or anticipated business or activities of
the Company or its affiliates, or that are anticipated by or result from
any task or work for or on behalf of the Company, which he, solely or
jointly, may conceive, make, or first disclose during the period of his
employment by the Company.
4) Employee agrees to and does hereby grant and assign to the Company or its
nominee, his entire right, title and interest in and to inventions, patents
and improvements that relate in any way to the actual or anticipated
business or activities of the Company or its affiliates, or that are
anticipated by or result from any task or work for or on behalf of the
Company together with any and all domestic and foreign patent rights in
such inventions and improvements. To aid the Company or its nominee in
securing full benefit and protection thereof, Employee agrees promptly to
do all lawful acts reasonably requested, at any time during and after
employment by the Company, without additional compensation but at the
Company's expense.
<PAGE>
5) Employee agrees that in the event he accepts employment with any firm or
engages in any type of activity of his own behalf, or in behalf of any
organization in competition with the Company or its affiliates during a
period of three (3) years following termination of his employment with the
Company, he shall notify the Company in writing within thirty (30) days of
the name and address of such organization and the nature of such activity.
6) Employee agrees to give Company timely written notice of any of his prior
employment agreements or patent rights that might conflict with the
interests of the Company or its affiliates.
7) No waiver by either party of any breach by the other party of any provision
of this Agreement shall be deemed or construed to be a waiver of any
succeeding breach of such provision or as a waiver of the provision itself.
8) This Agreement shall supersede the term of any prior employment agreement
or understanding between Employee and the Company. This Agreement may be
modified or amended only in writing and signed by and executive officer of
the Company and by the Employee.
9) Should any portion of this agreement be invalid, unenforceable or void,
such holding shall not have the effect of the invalidating the remainder of
this Agreement or any other part thereof, the parties hereby agreeing that
the portion so held to be invalid, unenforceable, or void shall, if
possible, be deemed amended or reduced in scope.
10) This Agreement shall be binding upon and pass to the benefit of the
successors and assigns of the Company and, insofar as the same may be
applied thereto, the heirs, legal representatives and assigns of the
Employee.
MEMRY CORPORATION James G. Binch
----------------------- ------------------------------
Employee's Full Name
Employee acknowledges reading,
understanding and receiving a
signed copy of this Agreement.
By /s/ Wendy Gavaghan /s/ James Gardner Binch
------------------------ ----------------------------
Company Officer or Witness Employee's Full Signature
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEMRY
CORPORATION'S CONSOLIDATED FINANCIAL STATEMENTS TO ITS ANNUAL REPORT ON FORM
10-KSB FOR THE YEAR ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 57
<SECURITIES> 0
<RECEIVABLES> 597
<ALLOWANCES> 29
<INVENTORY> 2044
<CURRENT-ASSETS> 2732
<PP&E> 5958
<DEPRECIATION> 2077
<TOTAL-ASSETS> 9679
<CURRENT-LIABILITIES> 3584
<BONDS> 0
0
36
<COMMON> 130
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,679
<SALES> 3195
<TOTAL-REVENUES> 3674
<CGS> 2915
<TOTAL-COSTS> 3337
<OTHER-EXPENSES> 2,163
<LOSS-PROVISION> 29
<INTEREST-EXPENSE> 250
<INCOME-PRETAX> (2,105)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,105)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,105)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)<F1>
<FN>
<F1>Common Stock equivalents have been excluded from the computation of the net
loss per common share because inclusion of such equivalents would be
anti-dilutive.
</FN>
</TABLE>
