<PAGE>
REGISTRATION NO. 333-15201
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------------
AMENDMENT NO.1
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------------------------
MEMRY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-1084424
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
57 Commerce Drive
Brookfield, Connecticut 06804
(203) 740-7311
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
__________________________________
James G. Binch
Chairman, President, Chief Executive Officer and Treasurer
Memry Corporation
57 Commerce Drive
Brookfield, Connecticut 06804
(203) 740-7311
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
__________________________________
Copies to:
David I. Albin, Esq.
Finn Dixon & Herling LLP
One Landmark Square, Suite 600
Stamford, Connecticut 06901
__________________________________
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
__________________________________
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
__________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 3,550,630 $2.00 $7,101,260 $1,921.44
===================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the amount of the registration
fee, based on the average of the closing bid and asked prices per share of
Common Stock of the Registrant reported on the OTC Bulletin Board on
January 27, 1997.
(2) The Registrant paid $1,613.16 with the initial filing of this Registration
Statement, based on the average of the bid and asked prices per share of
Common Stock on October 30, 1996 (which date was incorrectly listed as
October 1, 1997 on the Registration Statement as initially filed).
Pursuant to Rule 457(a) of the Securities Act of 1933, the registration fee
payable upon the filing of this Amendment No. 1 to the Registration
Statement has been increased to $1,921.44 (an increase of $308.28),
computed on the basis of the closing bid and asked price per share of
Common Stock of the Registrant on January 27, 1997 with respect to the
508,667 additional shares of Common Stock of the Registrant registered
hereby.
____________________________________________
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
PROSPECTUS
- ----------
3,550,630 SHARES
MEMRY CORPORATION
COMMON STOCK, PAR VALUE $0.01 PER SHARE
The 3,550,630 shares of common stock, par value $0.01 per share (the
"Common Stock") offered hereby (the"Offering"), including 2,123,935 shares that
are issuable upon the exercise of warrants held by certain stockholders, are
being sold by certain stockholders of Memry Corporation, a Delaware corporation
(the "Company"), with principal executive offices located at 57 Commerce Drive,
Brookfield, Connecticut 06804, telephone number (203) 740-7311. See "Selling
Stockholders." The Company will not receive any of the proceeds from the
Offering. The Company would, however, receive the exercise prices payable upon
issuance of the 2,123,935 shares of Common Stock eligible for sale hereunder
which underlie warrants. The Common Stock is traded on the OTC Bulletin Board
under the symbol "MRMY."
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGES 3 THROUGH 7 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=====================================================================
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Selling Stockholders(2)
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.. $ 2.00 N/A $ 2.00
- ---------------------------------------------------------------------
Total...... $ 7,101,260 N/A $ 7,101,260
=====================================================================
</TABLE>
(1) Estimated based on the average of the closing bid and asked prices per
share of Common Stock of Memry Corporation reported on the OTC Bulletin
Board on January 27, 1997.
(2) Expenses payable by the Company are estimated to be $33,921 (approximately
$0.01 per share).
------------------------------------
The date of this Prospectus is January 31, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-2 (the "Registration
Statement," which term shall include all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder,
covering the offer and sale of the Common Stock being offered hereby (the
"Shares"). This Prospectus does not contain all the information set forth
in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the
provisions of any contract, agreement or other document referred to in the
Registration Statement are summaries of the material terms of such
contracts, agreements and other documents and are not necessarily complete.
With respect to each such contract, agreement or other document filed or
incorporated by reference as an exhibit to the Registration Statement,
reference is made to such exhibit for a more complete description of the
matter involved, and each such statement is qualified in its entirety by
such reference.
The Company is subject to the periodic reporting and other
information requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Commission. Such reports, proxy
statements, the Registration Statement and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices at 7 World
Trade Center, 13th Floor, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Although the Company currently does not intend to send copies of such
material to its stockholders, copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, the Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding issuers, such as the Company,
that file electronically with the Commission, at http://www.sec.gov.
-2-
<PAGE>
RISK FACTORS
In addition to the other information contained in this
Prospectus, the prospective purchaser of the Common Stock offered hereby
should carefully consider the following factors:
ABSENCE OF PROFITABLE OPERATING HISTORY
The Company was incorporated in Delaware in November 1981 and, to
date, its sales revenues have not been sufficient to cover operating costs.
Excluding the first quarter of fiscal 1997 (in which the Company had a net
profit of $5,000 due to a $140,000 negotiated pay-out discount with the
Company's then-principal lender), the Company has not made a profit since
its incorporation in 1981, and has accumulated a net loss through September
30, 1996 of approximately $33 million. The Company's operations have been
financed principally by a series of equity sales, and there can be no
assurance that the Company will be able to obtain such financing in the
future or that the Company will become profitable and able to finance its
operations through operating revenues.
CURRENT WORKING CAPITAL SHORTFALL
As of September 30, 1996, the Company had a working capital
deficit of approximately $800,000. (It should be noted, however, that this
deficiency is caused by the inclusion of the full amount of a $1.135
million five-year term loan made to the Company in August of 1996 as a
current liability because the lender retained the contractual right to
require full repayment of such loan at any time upon demand.) Prior to the
commencement of the Company's 1996 fiscal year, the Company was at times
unable to pay certain managerial and executive employees and meet other
obligations. Therefore, while the Company's liquidity has significantly
improved in the last year, the Company's ability to continue its operations
is dependent upon its ability to generate positive cash flow from
operations and/or raise additional funds. There can be no assurance that
the Company will be able to raise additional funds (or that if such funds
are available that they will be available at an acceptable cost), or
generate cash flow from operations. Furthermore, any funds raised through
the issuance of equity will dilute individual interests in the Company's
outstanding equity. In addition, the Company's working capital could be
materially and adversely affected by the exercise by Connecticut
Innovations, Incorporated ("CII") of its contingent "put" right, if such
right were to be exercisable. See "Selling Stockholders."
RISKS ASSOCIATED WITH ACQUISITIONS
On June 28, 1996, the Company consummated the acquisition (the
"Raychem Acquisition") of certain assets comprising the nickel-titanium
product line of Raychem Corporation ("Raychem"). Sales of the acquired
business in fiscal 1996 significantly exceeded the Company's consolidated
sales on a stand-alone basis. As is the case in most instances where a
small business acquires a larger one, the Company's ability to successfully
operate the acquired business will depend on many factors, including
management's ability to integrate the acquired business and personnel with
the Company's prior operations and work force, the ability of Raychem, as
the acquired business's exclusive distributor for most applications, to
generate end user demand for the acquired business's products, and
management's ability to operate the acquired business with substantially
less overhead than was used by Raychem. While the Company is pleased with
the progress it has made integrating and operating the acquired business to
date, there can be no assurances that the Company will be able to operate
the acquired business successfully in the future.
In addition, the Company intends to continue to pursue potential
acquisitions in the future as a means of growth. The Company's ability to
expand successfully by acquisition depends on many factors, including those
described in the preceding paragraph with respect to the Raychem
Acquisition, the ability to identify potential
-3-
<PAGE>
targets and the consideration paid to effect any such acquisitions. The
consummation of any such future acquisitions, as well as the diversion of
the attention of the Company's management to effect any such acquisitions
and integrate the acquired operations with the Company, could have an
adverse effect on the Company's operations and financial results in the
future.
REQUIREMENT OF CONNECTICUT PRESENCE; CII PUT RIGHT
Due to the various agreements that the Company has entered into
with CII, the Company is required to transact certain portions of its
operations within the State of Connecticut. Specifically, the Company must
(a) maintain its corporation headquarters and all of its product business
operations in the State of Connecticut, (including the assembly of all
products to be sold to United States Surgical Corporation), excluding
business operations relating to the production by the Company's subsidiary,
Wright Machine Corporation ("Wright"), 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. While the aforesaid
restrictions have not to date adversely affected the Company's
competitiveness and/or the ability of the Company to enter into material
transactions with other parties, there can be no assurances that they will
not have such effect in the future. If the Company defaults on any of
these requirements, as well as other requirements set forth in the
agreements with CII, CII may exercise its right to "put" to the Company
certain securities of the Company that it owns. See "Selling
Stockholders." 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. Such a put could
significantly and adversely effect the Company's liquidity.
DEVELOPING MARKET AND TECHNOLOGICAL CHANGE
The market for the Company's shape memory alloy ("SMA") products
is relatively new and still developing, and is subject to technological
change. The future financial performance of the Company will depend in
part on the development and continuing growth of this market. There can be
no assurances that many of the Company's products will gain market
acceptance. Current or new competitors may introduce new products that
could adversely affect the Company's competitive position. The Company
believes that, to remain competitive, it must continue to improve its
products and develop and successfully market new products. There can be no
assurance that the Company will be able to do so. The success of new
products depends on a variety of factors, including understanding market
needs and being able to develop products that solve such needs. There can
be no assurances that the Company will be able to identify new product
opportunities successfully and develop and bring to market such new
products or that the Company will be able to respond effectively to
technological changes or new products developed by competitors.
DEPENDENCE ON KEY CUSTOMERS
The Company's two largest customers, Raychem and United States
Surgical Corporation, together represented approximately $4.7 million (or
74%) of the Company's total revenues derived from product sales during
the first six months of fiscal 1997. The loss of either such customer
could have a material adverse effect on the Company. However, the Company
has entered into a Private Label/Distribution Agreement, dated as of June
28, 1996, with Raychem, which requires Raychem to purchase certain products
and materials solely from the Company, until June 30, 2001 (although there
can be no assurances that Raychem will continue to purchase materials at
its current rate or that it will not, subsequent to June 30, 2001,
terminate such agreement).
-4-
<PAGE>
EFFECT OF POSSIBLE COMPETITION
The Company expects that competition will intensify in the SMA
field as the technology becomes more widely known. A small number of U.S.,
Belgian and Japanese companies pose a potential source of competition in
SMA materials and products. Some of these companies, and other potential
competitors, have considerably greater resources than the Company, and have
(or have the ability to acquire) considerable technical resources.
INTELLECTUAL PROPERTY RISKS
The Company's success will depend in part on its ability to
obtain and maintain patent protection for its products, to preserve its
trade secrets and to operate without infringing on the proprietary rights
of third parties. The Company attempts to protect its technology by, among
other things, investing in, obtaining and maintaining patents, trademarks
and trade secrets. Although the Company has never been party to litigation
involving its technology, the SMA industry has produced disputes over
intellectual property rights which have resulted in significant and
expensive litigation. Any assertions of intellectual property claims could
require the Company to cease the manufacture and sale of infringing
products, to incur significant litigation costs and to develop non-
infringing technology or acquire licenses to the alleged infringed
technology. There can be no assurance that the Company would be able to
obtain such licenses on acceptable terms or to develop non-infringing
technology. In addition, there can be no assurance that any of the
Company's patents will not be challenged, invalidated or circumvented or
that rights granted thereunder will provide competitive advantages to the
Company. Furthermore, the laws of certain countries do not protect the
Company's intellectual property rights to the same extent as do the laws of
the United States.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends, in large part, upon a small number
of key managerial, engineering and technical personnel, and the loss of
certain key personnel could have an adverse effect on the Company's
business. The Company has obtained key man life insurance with respect to
its President in the amount of $2,200,000 ($500,000 of which has been
collaterally assigned to the Company's lender).
EXISTENCE OF CONSENT DECREE
On February 22, 1989, the Company entered into a consent decree
(the "Consent Decree") with the Securities and Exchange Commission (the
"SEC") in order to settle litigation brought by the Commission alleging
that during 1985 and 1986 the Company made false and/or misleading
statements in the registration statement relating to the Company's initial
public offering, in a series of press releases, in selling materials in
connection with a private placement of securities to foreign institutions
and in a registration statement with respect to a secondary shelf offering.
While certain portions of the Consent Decree have expired, the Company has
in the past failed to comply with the requirement that it timely file all
of its Annual Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB.
It cannot be clear what, if any, effect such violations of the Consent
Decree may have upon the Company.
DIVIDENDS NOT LIKELY
For the foreseeable future, it is anticipated that earnings (if
any) will be used to finance the operations of the Company and that
dividends will not be paid. The Company's loan agreement with its
principal lenders prohibits the payment of dividends.
-5-
<PAGE>
SIGNIFICANT STOCKHOLDERS
As of January 6, 1997, the Company's directors and executive
officers beneficially owned in the aggregate approximately 17% of the
Company's Common Stock. In addition, three institutional European
investors beneficially owned 25.4%, 8.5% and 7.4% of the Company's Common
Stock, respectively, Connecticut Innovations, Incorporated beneficially
owned approximately 16% of the Company's Common Stock and Raychem
beneficially owned 12.5% of the Company's Common Stock. (Because of the
Securities and Exchange Commission's rules on calculating beneficial
ownership percentages, the percentage of the Company's Common Stock
beneficially owned by all of such parties combined would be substantially
less than if the aforesaid percentages were merely added together but would
still constitute approximately 70% of the Company's outstanding Common
Stock). This concentration of Common Stock in the hands of a small number
of individuals and entities means that there may be little chance for other
stockholders to influence the business and affairs of the Company by the
exercise of voting rights. Furthermore, the aforesaid concentration in
shares may cause extreme fluctuations in the trading volume of the
Company's Common Stock in a given period, which in turn may cause the
Company's Common Stock to suffer market price fluctuations without regard
to the Company's operating results.
NO CUMULATIVE VOTING
The Certificate of Incorporation of the Company, as amended (the
"Certificate of Incorporation"), does not provide for cumulative voting.
Therefore, holders of less than a majority of the Company's outstanding
Common Stock have no right to elect any of the Company's directors.
POSSIBLE EFFECT OF ADDITIONAL PREFERRED STOCK ISSUANCES
The Certificate of Incorporation of the Company authorizes the
issuance of up to 100,000 shares of preferred stock, $100 par value per
share ("Preferred Stock"). The Board of Directors is authorized to issue
shares of Preferred Stock from time to time in one or more series and,
subject to the limitations contained in the Certificate of Incorporation
and any limitations prescribed by law, to establish and designate series
and to fix the number of shares and the relative rights, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions) and liquidation preferences of each such series. Currently, no
Preferred Stock is outstanding. If shares of Preferred Stock are issued,
such issuance could adversely affect the voting rights of the holders of
the Company's Common Stock by increasing the number of outstanding shares
having voting rights, or by the creation of class or series voting rights,
and, if such shares have conversion rights, could increase the number of
shares of Common Stock outstanding. In addition, shares of Preferred Stock
could have preferences with respect to dividend and liquidation rights.
The Company has no present plans to issue additional Preferred Stock.
LIQUIDITY OF STOCK
The Company was de-listed from the National Association of
Securities Dealers Automated System ("NASDAQ") in November of 1992 due to
the Company not meeting various requirements of NASDAQ. The Company's
Common Stock is currently trading on the OTC Bulletin Board. Thus, only
bid and asked prices between dealers (rather than sales prices) are
currently available with respect to the Common Stock. The fact that the
Company is trading on the OTC Bulletin Board rather than on NASDAQ or an
exchange could have the effect of significantly reducing news coverage of
the Company and might cause the market price of the Common Stock to be
lower than it otherwise would be. Although the Company intends to apply
for listing on NASDAQ as soon as possible, it currently would not qualify
to be so listed. Thus, holders of the Common Stock might not realize the
extent of liquidity as they might were the stock listed on NASDAQ or a
national securities exchange.
-6-
<PAGE>
BROKER-DEALER SALES OF COMPANY'S COMMON STOCK
The Company's Common Stock is covered by a rule under the
Exchange Act that imposes additional requirements on broker-dealers who
sell such "penny stock" to, or effect the purchase of such "penny stock"
by, any person in a transaction in which the purchaser is not an
established customer, that does not meet the requirements of Rule 505 or
Rule 506 under the Securities Act, that does not fall within Section 4(2)
under the Securities Act or that is not exempt under Rule 15g-1 of the
Exchange Act. For transactions covered by the rule, prior to the
transaction the broker-dealer must make a special suitability determination
for the purchaser and must have received the purchaser's written agreement
to the transaction prior to the sale. Consequently, the rule may affect
the ability of the broker-dealers to sell the Company's Common Stock and
also may affect the ability of any purchaser in this Offering to sell its
shares in the secondary market.
DILUTION
As of January 6, 1997, there were outstanding warrants to
purchase 5,685,368 shares of Common Stock of the Company at exercise prices
ranging from $0.01 per share to $5.00 per share and options to purchase
870,000 shares at exercise prices ranging from $0.90 per share to $1.78 per
share. (Of the aforesaid warrants, 414,525 warrants, each with an exercise
price of $5.00 per share, expire during 1997.) In the event of a
substantial increase in the market value of the Company's Common Stock, it
is likely that many or all of those warrants and options would be
exercised. Since the exercise prices would be likely to be less than the
market value of the Common Stock, the market value of each share of Common
Stock would be reduced by any such exercise, and holders of Common Stock
would to that extent suffer a dilution of the value of their Common Stock.
In addition, 230,000 shares of Common Stock are reserved for issuance upon
the exercise of additional options which may be granted under the Memry
Corporation Stock Option Plan.
UPDATES TO DESCRIPTION OF BUSINESS
A full description of the Company's business is set forth in Item
1 of the Company's Annual Report on Form 10-KSB, as amended, for the fiscal
year ended June 30, 1996. Said Annual Report has been incorporated into
this Prospectus by reference. See "Incorporation by Reference."
Between the date of said description and the date hereof,
however, three modifications to the Company's business have occurred
which should be noted. First, the Company's operations relating to the
finishing of shape memory alloys ("SMAs") into components for sales to
United States Surgical Corporation, which operations were acquired from
Raychem on June 28, 1996, have been relocated from the Company's Menlo
Park, California facility to its Brookfield, Connecticut facility, and such
components are now being finished and assembled in Brookfield. Second, on
January 24, 1997, the Company terminated its contract with the distributor
of the ZeeMet/(TM)/ inserts for golf clubs, through which distributor the
Company's inserts were being sold to the Nicklaus Golf Equipment Company
("Nicklaus"). The Company terminated the contract because the distributor
has defaulted on various obligations (including payment obligations) to the
Company. The Company intends to market the ZeeMet/(TM)/ inserts directly to
Nicklaus and other golf club manufacturers, but it is not yet possible to
determine if and when sales of ZeeMet/(TM)/ will continue. Third, the
Company's Wright Machine Corporation subsidiary has stopped manufacturing
standard taper pins, which did not produce a material amount of revenue in
fiscal 1996, to concentrate on its other lines of business.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
the Shares. However, the Company would receive the exercise prices payable
upon issuance of the 2,123,935 shares of Common Stock eligible for sale
hereunder which underlie warrants issued to certain Selling Stockholders.
If all of these warrants are
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<PAGE>
exercised at their current exercise prices, the Company will receive
$2,052,457 in proceeds from the exercise thereof. The Company would use
the proceeds from exercise of these warrants for general working capital
purposes. The principal reason for the Offering is to satisfy certain
contractual obligations to CII as well as to certain other stockholders.
See "Selling Stockholders."
SELLING STOCKHOLDERS
An aggregate of up to 3,550,630 shares of Common Stock may be
offered by the Selling Stockholders. Because the Selling Stockholders may
offer from time to time some or all of the Shares that they hold (including
Shares issuable upon exercise of certain securities), no estimate can be
given as to the amount of Shares that will be offered for sale by the
Selling Stockholders hereunder at any particular time. The following table
sets forth certain information with respect to the Selling Stockholders for
which the Company is registering Shares for resale to the public. The
Company will not receive any of the proceeds from the sale of such Shares.
However, the Company would receive an aggregate of $2,052,457 in proceeds
from the exercise of certain warrants held by certain Selling Stockholders,
which warrants are exercisable to purchase 2,123,935 shares of Common
Stock, which shares of Common Stock are eligible for resale hereunder, as
described below.
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares of Maximum Number Common Stock to Percentage
Common Stock of Shares To Be be Owned After Ownership After
Owned Prior to Offered by Selling Completion of the Completion Of the
Selling Stockholder Offering Stockholder Offering(1) Offering(1)(2)
- ------------------- ------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
Connecticut 3,041,963(4) 3,041,963(4) 0 *
Innovations,
Incorporated(3)
Peter J. Creedon 136,144 108,644 27,500 *
Harry C. Hagerty, 91,335 66,335 25,000 *
Jr.
Andrew Olear II & 33,529(5) 33,529(5) 0 *
Barbara L. Olear
Precision Castings, 23,077 23,077 0 *
Inc.
Max Ambach 66,000 40,000 26,000 *
The Amerling 10,000 10,000 0 *
Company
Jonathan Olear 5,882 5,882 0 *
Mary O'Lear 11,765 11,765 0 *
Frank Ciardullo, Jr. 105,769 17,435 88,334 *
Wendy A. 30,383(7) 5,883 24,500(7) *
Gavaghan(6)
James L. Winter 11,765 11,765 0 *
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares of Maximum Number Common Stock to Percentage
Common Stock of Shares To Be be Owned After Ownership After
Owned Prior to Offered by Selling Completion of the Completion Of the
Selling Stockholder Offering Stockholder Offering(1) Offering(1)(2)
- ------------------- ------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
Donald Resnick 143,589 48,352 95,237 *
Dawn M. Morton(8) 95,000(9) 18,000(9) 77,000 *
Dominion Financial 18,000(11) 18,000(11) 0 *
Group International,
LDC(10)
Whitman & Ransom 30,800 30,800 0 *
Connecticut 46,200 46,200 0 *
Affiliated Law
Partners (12)
Edward A. 13,000 13,000 0 *
Murphy(13)
</TABLE>
- ----------
* Less than 1%
(1) Assumes that all shares of Common Stock the disposition of which is
being registered on behalf of the Selling Stockholders are sold
pursuant to this Prospectus and that no additional shares of Common
Stock or other securities of the Company convertible into or
exercisable for shares of Common Stock are issued to or sold by the
Selling Stockholders.
(2) In each case where shares underlying options or warrants are included
as beneficially owned by a person or entity, the percentage of all
shares owned by such person or entity is calculated as if all such
securities owned by such person or entity had been exercised prior to
such calculation.
(3) As of January 6, 1997, CII was the beneficial owner of 16.2% of the
Company's Common Stock.
(4) Includes 2,087,935 shares underlying warrants issued to CII.
(5) Includes 23,529 shares of Common Stock owned by Andrew Olear II
individually.
(6) Since September 24, 1994, Ms. Gavaghan has been Corporate Controller
and Secretary of the Company, and since September 1994, she has been a
director and Secretary of Wright Machine Corporation, the Company's
subsidiary. From September 1994 until December 1995, Ms. Gavaghan was
also Treasurer of Wright Machine Corporation.
-9-
<PAGE>
(7) Includes options exercisable to purchase 24,500 shares of Common
Stock. As of December 5, 1996, Ms. Gavaghan was issued additional
options exercisable to purchase 12,000 shares of Common Stock, which
options are exercisable in three equal annual installments beginning
December 5, 1997. In addition, the Company has also granted to Ms.
Gavaghan 1,500 share appreciation rights.
(8) Ms. Morton's husband, William H. Morton, Jr., has been Senior Vice
President and Chief Operating Officer of the Company since November 7,
1995.
(9) Includes 18,000 shares of Common Stock underlying warrants issued to
Ms. Morton by the Company at an exercise price of $1.50 per share.
Also includes: (i) options to purchase 25,000 shares of the Company's
Common Stock at $0.90 per share owned by Ms. Morton's husband, William
H. Morton, Jr. (which options represent the currently exercisable
portion of options exercisable to purchase an aggregate of 125,000
shares of Common Stock, which options are exercisable in five equal
annual installments beginning on November 7, 1996), (ii) 50,000 shares
of Common Stock owned by Ms. Morton's husband, and (iii) 2,000 shares
of Common Stock owned by Ms. Morton's children. Mr. Morton also has
been granted additional options exercisable to purchase 5,000 shares
of Common Stock, which options become exercisable in three equal
annual installments beginning on December 5, 1997.
(10) W. Andrew Krusen, Jr., a director of the Company, is the Chairman of
the Executive Committee of Dominion Financial Group International LDC
and is the President as well as a principal shareholder of Dominion
Financial Group, Inc., the managing general partner of Dominion
Capital Partners. Dominion Capital Partners is the majority
stockholder in Dominion Financial Group International, LDC.
(11) Consists of shares of Common Stock underlying warrants issued to
Dominion Financial Group International, LDC by the Company, at an
exercise price of $1.50 per share.
(12) Over the last three years, Connecticut Affiliated Law Partners has
provided various legal services to the Company under the name Whitman
Breed Abbott & Morgan.
(13) From April 13, 1994 until September 22, 1995, Mr. Murphy was President
and a director of Wright Machine Corporation, the Company's
subsidiary, and Vice President of the Company.
__________________________________
The Shares to be sold by CII are shares of Common Stock acquired by
CII or to be acquired upon the exercise of warrants issued to CII by the
Company. Such securities were issued to CII for consideration comprised of
cash and forgiveness of indebtedness in connection with a Convertible
Subordinated Debenture Purchase Agreement, dated as of December 22, 1994
(the "Purchase Agreement"), as amended. Pursuant to the Purchase
Agreement, on December 22, 1994 the Company issued to CII the following
securities (the "CII Securities"): (i) a Convertible Subordinated
Debenture dated December 22, 1994 from the Company to CII in the principal
amount of $763,208 (the "Debenture"), (ii) a warrant dated December 22,
1994 to purchase 508,805 shares of Common Stock at an initial exercise
price of $2.15 per share (the "Class I Warrants"), (iii) a warrant dated
December 22, 1994 to purchase 305,283 shares of Common Stock at an initial
exercise price of $2.75 per share (the "Class II Warrants"), and (iv) a
warrant dated December 22, 1994 to purchase 100,000 shares of Common Stock
at an initial exercise price of $1.00, such warrant being an amendment and
restatement of a warrant previously held by CII to purchase 10,000 shares
of Common Stock at an exercise price of $10.00 per share (the "Class III
Warrants"). On October 12, 1995, the Purchase Agreement and the CII
Securities were modified, such that the Debenture became convertible into
954,010 shares of Common Stock, and due to anti-dilution provisions, the
Class I Warrants became exercisable for 1,176,269 shares of Common Stock at
an exercise price of $0.93 per share and the Class II Warrants became
exercisable for 705,485 shares of Common Stock at
-10-
<PAGE>
an exercise price of $1.19 per share. The number of shares of Common Stock
for which the Class III Warrants were exercisable remained the same, but
the exercise price per share was adjusted to $0.65. On June 24, 1996, the
parties agreed that in order to help the Company market the Common Stock
sold to fund the acquisition of Raychem's nickel-titanium product line, CII
would convert the Debenture into equity, and a further amendment to the
Purchase Agreement was executed by CII and the Company, which amendment
became effective on June 28, 1996. Pursuant to such amendment, on June 28,
1996, the Debenture was converted into 285,528 shares of Common Stock and
66.85 shares of Series H Preferred Stock (the "Series H Shares"). The
parties agreed that additional shares of Common Stock which were issuable
to CII due to a penalty adjustment provision of the Debenture would be
folded into the Class I Warrants. Accordingly, the number of shares of
Common Stock for which the Class I Warrants are exercisable was increased
to 1,282,450, with the exercise price per share of such Class I Warrants
being adjusted to $0.853 per share. The Class II and III Warrants were not
adjusted. As of the close of business on September 4, 1996, all of the
Series H Shares automatically were converted into 668,500 shares of Common
Stock, pursuant to the terms of the Certificate of Designations, Rights and
Preferences of the Series H Preferred Stock.
The Class I, II and III Warrants are subject to certain antidilution
rights. In addition, pursuant to the terms of the Purchase Agreement, as
amended, the Company is required to file a registration statement (the
"Registration Statement") to cover, inter alia, the resale by CII of the
shares of Common Stock underlying the CII Securities and the Series H
Shares (the "Registrable Securities"). The registration statement to which
this Prospectus relates has been filed to fulfill such obligation. The
Company is required to cause the Registration Statement to become effective
no later than January 31, 1997, maintain the effectiveness of the
Registration Statement for a period of three years from its effective date,
subject to the provisions of the Purchase Agreement, as amended, and use
its best efforts to allow CII to continually sell Registrable Securities
pursuant to such Registration Statement free from any stop orders or
suspensions by the Company or advice of counsel to the contrary. CII also
has been granted 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
Registrable Securities the Company ceases to (a) maintain its corporation
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 the U.S. Surgical Corporation), 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 cause the effectiveness of the Registration Statement
by January 31, 1997, or (b) to keep the Registration Statement effective
for an aggregate of 120 days during any rolling twelve month period. Upon
CII's exercise of its put, the Company would be obligated to purchase from
CII all CII Securities and Registrable Securities held at that time by CII
for a price equal to the greater of (x) the then current market price of
such CII Securities and Registrable Securities (on an as-converted basis)
and (y) $2.00, multiplied by the number of CII Securities and Registrable
Securities (on an as-converted basis), less in the case of Common Stock
underlying the Class I Warrants, the Class II Warrants or the Class III
Warrants, any exercise price that would have to be paid to acquire such
Common Stock.
Other than as set forth above, there are no material relationships
between the Selling Stockholders and the Company (or any affiliate of the
Company), nor have any such material relationships existed within the past
three years, and the Selling Stockholders do not hold any other securities
of the Company.
-11-
<PAGE>
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of
30,000,000 shares of Common Stock, $0.01 par value per share, and 100,000
shares of Preferred Stock, $100.00 par value per share.
The holders of Common Stock are entitled to one vote per share.
The Common Stock has non-cumulative voting rights, which means that holders
of more than 50% of the shares voting for the election of directors can
elect all of the directors and take most other actions submitted to a vote
of stockholders, if they so determine. In such event, the holders of the
remaining shares will not be able to elect any directors or take such other
actions. The holders of Common Stock have no preemptive rights to maintain
their respective percentage ownership interest in the Company or other
subscription or conversion rights for other securities of the Company.
The Company has never paid a cash dividend on its Common Stock
and the Company does not contemplate paying any cash dividends on its
Common Stock in the near future. Pursuant to the Company's August 9, 1996
loan agreement with its principal lender, the Company is prohibited from
declaring or paying any dividends, or making a distribution to its
stockholders, until the termination of such agreement and the repayment of
all amounts due to such lender.
By letter agreement dated May 22, 1995 between Harbour Holdings
Limited Partnership ("Harbour") and the Company, Harbour agreed to accept
the issuance to it by the Company of 747,500 shares of Common Stock as
payment in full of declared, accrued and unpaid dividends in the amount of
$598,000 that accrued prior to June 30, 1993 with respect to shares of
Series A Preferred Stock and Series B Preferred Stock held at such time by
Harbour.
CII has certain antidilution protections as well as a put right
in connection with the CII Securities. See
"Selling Stockholders."
PLAN OF DISTRIBUTION
The Shares covered hereby may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the
timing, manner and size of each sale. Such sales may be made in the over-
the-counter market or otherwise, at prices related to the then current
market price or in negotiated transactions, including one or more of the
following methods: (a) purchases by a broker-dealer as principal and resale
by such broker or dealer for its account pursuant to this Prospectus; (b)
ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (c) block trades in which the broker-dealer so
engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction.
The Company has been advised by each of the Selling Stockholders that such
Selling Stockholder has not made any arrangements relating to the
distribution of the Shares covered by this Prospectus. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate. Broker-dealers may receive commissions or
discounts from the Selling Stockholders in amounts to be negotiated.
In offering the Shares covered hereby, the Selling Stockholders
and any broker-dealers and any other participating broker-dealers who
execute sales for the Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with
such sales, and any profits realized by the Selling Stockholders and the
compensation of such broker-dealer may be deemed to be underwriting
discounts and commissions. In addition, any Shares covered by this
Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
-12-
<PAGE>
In connection with the Offering, each of the Selling Stockholders
has agreed that during such time as it may be engaged in a distribution of
Shares covered hereby, it will not engage in any stabilization activity in
connection with the Company's Common Stock, will make arrangements with the
Company to furnish to each purchaser and/or broker-dealer through which
Shares covered hereby may be offered copies of this Prospectus and its
accompanying documents and reports and that it will not bid for or purchase
any securities of the Company or attempt to induce any person to bid or
purchase any securities of the Company except as permitted under the
Exchange Act. Each of the Selling Stockholders has agreed to inform the
Company when the distribution of its Shares is completed.
This Offering will terminate on the earlier of the third
anniversary of the effective date hereof and the date on which all Shares
offered hereby have been sold by the Selling Stockholders.
In order to comply with certain states' securities laws, if
applicable, the Shares offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, the
Shares may not be sold in certain states unless they have been registered
or qualified for sale in such state or an exemption from regulation or
qualification is available and is complied with. The Company intends to
use its best efforts to register or qualify the Shares for resale or to
seek an exemption from registration or qualification in any state required
in order to facilitate as to a particular sale, the resale of the Shares by
the Selling Stockholders.
CERTAIN FINANCIAL INFORMATION
The financial statements included in this Prospectus, as
previously filed with the Commission on September 13, 1996 as part of the
Company's Form 8-K/A-1, reflect historical and pro forma financial
information regarding the business acquired through the Raychem
Acquisition. The index to said financial statements can be found on page
F-1 of this Prospectus. Other than the Statement of Assets Acquired, such
financial statements were not reflected in the Company's Annual Report on
Form 10-KSB, as amended, for the fiscal year ended June 30, 1996.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Section 145 of the General Corporation Law of the State of
Delaware empowers a corporation incorporated under the General Corporation
Law to indemnify its directors, officers, employees and agents and its
former directors, officers, employees and agents and those who serve in
such capacities with another enterprise at its request, against expenses
(including attorneys' fees), as well as judgments, fines and amounts paid
in settlements actually and reasonably incurred by them in connection with
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by
or in the right of the corporation), in which they or any of them were or
are made parties or are threatened to be made parties by reason of their
serving or having served in such capacity. The power to indemnify shall
only exist where such officer, director, employee or agent has acted in
good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and, in the case of a criminal
action, such person had no reasonable cause to believe his conduct was
unlawful. In a threatened, pending or completed action or suit by or in
the right of the corporation, the corporation may indemnify such person
only for expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
except that if such person has been adjudged liable to the corporation then
the corporation shall have no power of indemnification unless and only to
the extent that a court shall determine upon application. Indemnity is
mandatory as to expenses (including attorneys' fees) actually and
reasonably incurred by a director, officer, employee or agent of a
corporation to the extent a claim, issue or matter has been successfully
defended. Expenses (including attorneys' fees) incurred by an officer or
director in defending any such action, suit or proceeding may be paid by
the corporation in advance of final disposition upon receipt of an
-13-
<PAGE>
undertaking by or on behalf of such person to repay such amount if it is
ultimately determined that he is not entitled to be indemnified by the
corporation. Indemnification is not deemed exclusive of any other rights
to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise. The
determination to make indemnification pursuant to Section 145 shall be made
by (i) a majority vote of disinterested directors even though less than a
quorum, (ii) if there are no such directors or if such directors so direct,
by independent legal counsel in a written opinion, or (ii) by the
stockholders. A Delaware corporation also has the power to purchase and
maintain insurance on behalf of the persons it has the power to indemnify,
whether or not indemnity against such liability would be allowed under the
statute.
Article VIII of the By-Laws of the Company provides as
follows:
The Corporation shall, to the fullest extent permitted by subsections
(a) through (e) of Section 145 of the General Corporation Law of the
State of Delaware (as such statute may, from time to time, be
amended), indemnify any and all persons whom it shall have power to
indemnify against any and all expenses, liabilities and other
matters.
The Certificate of Incorporation of the Company was amended in June
1989, as permitted by the Delaware General Corporation Law, pursuant to a
vote of its stockholders, to provide that, to the fullest extent
permissible under the Delaware General Corporation Law, directors of the
Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of the fiduciary duty as a director except
for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law,
(iii) for improper dividend payment or unlawful stock purchases or
redemption, or (iv) for any transaction from which the director derived an
improper personal benefit.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
INCORPORATION BY REFERENCE
The Company's Annual Report on Form 10-KSB, as amended by Form 10-
KSB/A1, Form 10-KSB/A2 and Form 10-KSB/A3, as previously filed with the
Commission, are hereby incorporated by reference into this Prospectus for
the fiscal year ended June 30, 1996.
All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since June 30, 1996 and prior to the termination of the
Offering shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon his written or oral request, a copy of any or
all of the documents incorporated herein by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into the documents which this Prospectus incorporates). Written
or telephone requests should be directed to the Company, 57 Commerce Drive,
Brookfield, Connecticut 06804 (telephone 203/740-7311), Attention: Wendy A.
Gavaghan.
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<PAGE>
This Prospectus is accompanied by a copy of the Company's Form 10-KSB
filed with the Commission for the fiscal year of the Company ended June 30,
1996 (as the same has been amended), and by a copy of the Company's Proxy
Statement used for the solicitation of proxies from stockholders for the
annual meeting of stockholders held on December 5, 1996. In lieu of the
foregoing, this Prospectus shall be accompanied by a copy of the Company's
Form 10-KSB, together with any amendments thereto, filed with the
Commission for each subsequent fiscal year of the Company during the
duration of this Offering and by a copy of the Company's Proxy Statement
used for the solicitation of stockholders for each subsequent annual
meeting of stockholders held during the duration of this Offering. If a
Form 10-QSB has been filed since the date of the Form 10-KSB described
above, this Prospectus is also accompanied by a copy of the Company's
latest Form 10-QSB filed with the Commission with respect to the most
recent fiscal quarter which ends after the end of the latest fiscal year of
the Company for which the Company has delivered the Form 10-KSB as
described above.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Company by Finn Dixon & Herling LLP,
Stamford, Connecticut.
EXPERTS
The consolidated financial statements of Memry Corporation and its
subsidiary at June 30, 1996 and 1995 and for the years then ended,
incorporated by reference in this Prospectus and Registration Statement
from the Company's Form 10-KSB for the period ended June 30, 1996, as
amended, have been audited by McGladrey & Pullen, LLP, independent
auditors, and are incorporated herein in reliance upon such report given
upon the authority of such firm as experts in auditing and accounting.
The statement of net assets acquired as of June 28, 1996 and the
statements of operations for each of the two years ended June 30, 1996 of
the Nickel-Titanium Product Line of the Electronics Business Segment of
Raychem Corporation included in this Prospectus have been so included
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on authority of said firm as experts in auditing and accounting.
-15-
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED
---------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Index to Financial Statements F-1
Report of Independent Accountants F-2
dated August 30, 1996
Statement of Assets Acquired F-3
as of June 28, 1996
Statements of Operations for the years F-4
ended June 30, 1996 and 1995
Notes to Statement of Assets Acquired F-5
and Statements of Operations
Pro Forma Financial Information F-9
Pro Forma Consolidated Statement F-10
of Operations (unaudited) for
year ended June 30, 1995
Pro Forma Consolidated Statement F-11
of Operations (unaudited) for
year ended June 30, 1996
Notes to Pro Forma Financial F-12
Information
</TABLE>
F-1
<PAGE>
Report of Independent Accountants
To the Board of Directors of
Raychem Corporation
We have audited the accompanying statement of assets acquired of the Nickel-
Titanium Alloy Product Line (the "Product Line") of the Electronics Business
Segment of Raychem Corporation as of June 28, 1996, and the statements of
operations of the Product Line for each of the two years in the period ended
June 30, 1996. These statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statements were prepared solely to present the assets of the
Product Line acquired by Memry Corporation and the statements of operations
of the Product Line for each of the two years in the period ended June 30,
1996, in order to comply with the requirements of the Securities and Exchange
Commission (for inclusion in the Current Report on Form 8-K/A of Memry
Corporation) as described in Note 1 and are not intended to be a complete
presentation of the assets and liabilities of the Product Line.
In our opinion, the statements referred to above present fairly, in all
material respects, the assets acquired of the Product Line at June 28, 1996
and the results of operations of the Product Line for each of the two years
in the period ended June 30, 1996, in conformity with generally accepted
accounting principles.
As discussed in Notes 1 and 3 to the statements, the Product Line has had
extensive transactions and relationships with its parent, Raychem
Corporation. It is possible that the terms of these transactions are not the
same as those which would result from transactions among wholly unrelated
parties.
/s/ Price Waterhouse LLP
San Jose, California
August 30, 1996
F-2
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Statement of Assets Acquired
June 28, 1996
- --------------------------------------------------------------------------------
Assets acquired:
<TABLE>
<S> <C>
Inventory $1,393,000
Property and equipment, net 1,681,000
----------
$3,074,000
==========
</TABLE>
See accompanying notes to statement of assets acquired and statements of
operations.
F-3
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
June 30,
1996 1995
<S> <C> <C>
Revenues $11,169,000 $ 6,238,000
Cost of goods sold 4,897,000 3,856,000
---------- -----------
Gross profit 6,272,000 2,382,000
---------- -----------
Operating expenses:
Research and development 1,884,000 2,035,000
Selling and marketing 1,427,000 1,314,000
General and administrative 1,051,000 1,643,000
Restructuring charge 678,000 280,000
---------- -----------
5,040,000 5,272,000
---------- -----------
Income (loss) before income taxes 1,232,000 (2,890,000)
Provision for income taxes 40,000 -
---------- -----------
Net income (loss) $1,192,000 $(2,890,000)
========== ===========
</TABLE>
See accompanying notes to statement of assets acquired and statements of
operations.
F-4
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Notes to Statement of Assets Acquired and Statements of Operations
- --------------------------------------------------------------------------------
1. Basis of Presentation
Raychem Corporation ("Raychem") invents, makes and sells high-performance
products based on its expertise in materials science, product design and
process engineering. Raychem serves customers that fall into three business
segments --industrial, electronics and telecommunications. The nickel-
titanium alloy product line (the "Product Line") has operated as part of the
electronics business segment ("Electronics"). The Product Line has been
engaged in designing, developing, processing, manufacturing and marketing
nickel-titanium alloy components for OEM applications. All activities of the
Product Line were combined with Electronics' other activities for purposes
of both external and internal reporting and, therefore, except for
inventory, property and equipment, net and statement of operations
information which was maintained at the Product Line level, separate
financial statement information for the Product Line is not available. The
accompanying financial information presents the net book value of the assets
of the Product Line acquired by Memry Corporation ("Memry") on June 28,
1996. This information is not intended to be a complete presentation of the
assets and liabilities of the Product Line. The accompanying statements of
operations for the two years ended June 30, 1996 were prepared to comply
with the requirements of the Securities and Exchange Commission (for
inclusion in the Current Report on Form 8-K/A of Memry).
The accompanying financial information has been prepared from the historical
accounting records of Raychem and does not purport to reflect the assets and
liabilities or results of operations that would have resulted if the Product
Line had operated as an unaffiliated independent company. The financial
information presented is based on Raychem's historical cost and does not
give consideration to the adjustments that will result from Memry's
acquisition. Since only certain assets are being acquired and no liabilities
are being assumed by Memry, a statement of cash flows is not applicable. On
June 28, 1996, the assets of the Product Line reflected in the accompanying
Statement of Assets Acquired were acquired by Memry for $4 million in cash,
and warrants which provide Raychem the right to acquire up to 1,250,000
shares of Memry common stock at $2.00 per share and up to 1,130,000 shares
of Memry common stock at $0.01 per share. In addition, pursuant to a private
label/distribution agreement entered into between Raychem and Memry
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 fiscal 1996 revenues. Sales to Raychem under the distributor 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.
F-5
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Notes to Statement of Assets Acquired and Statements of Operations
- --------------------------------------------------------------------------------
The accompanying Statements of Operations reflect the "carved-out" results
of operations of the Product Line as if the Product Line had been operating
as a separate company. Certain corporate, general and administrative
expenses of Raychem have been allocated to the Product Line (discussed in
Note 3) on various bases which, in the opinion of management, are
reasonable. However, such expenses are not necessarily indicative of, and it
is not practicable for management to estimate the level of, expenses which
might have been incurred had the Product Line been operating as a separate
company.
The preparation of the accompanying statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, revenues and
expenses. Actual results could differ from those estimates.
2. Summary of Significant Accounting Policies
Revenue Recognition
The Product Line recognizes revenue upon shipment of product. Bad debt
expense is included as an element of general and administrative expenses in
the accompanying statements of operations and was not material for the
periods presented.
For the year ended June 30, 1996, revenues from two customers represented
32% and 17% of total revenues. For the year ended June 30, 1995, revenues
from one customer represented 41% of total revenues. Revenues from shipments
to customers outside the United States, primarily in Europe and Asia,
represented 38% and 24% of total revenues for the years ended June 30, 1996
and 1995, respectively. Revenues from sales to European customers
represented 33% and 16% of total revenues for the years ended June 30, 1996
and 1995, respectively. All sales are denominated in U.S. dollars.
Inventory
Inventory is stated at the lower of cost (first-in, first-out method) or
market. The cost of inventory includes material, labor and manufacturing
overhead.
F-6
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Notes to Statement of Assets Acquired and Statements of Operations
- --------------------------------------------------------------------------------
Property and equipment
Machinery and equipment, and leasehold improvements are stated at cost.
Depreciation and amortization are computed using the straight-line method
over the estimated useful lives of the assets, generally three to ten years,
or the life of the lease, whichever is shorter. Depreciation and
amortization expense related to the property and equipment acquired by Memry
totaled $569,000 and $552,000 for the years ended June 30, 1996 and 1995,
respectively.
Income taxes
The results of the Product Line's operations are included in Raychem's
consolidated U.S. federal and applicable state income tax returns. The
provision for income taxes of $40,000 recorded for the year ended June 30,
1996 primarily represents alternative minimum taxes the Product Line would
have provided on a standalone basis. No current provision or benefit for
income taxes would have been provided on a standalone basis for the year
ended June 30, 1995 as the Product Line incurred a net operating loss for
income tax purposes and had no carryback potential. In addition, no deferred
provision or benefit for income taxes would have been recorded on a
standalone basis for fiscal 1995 as the Product Line was in a net deferred
tax asset position for which a full valuation allowance would have been
provided.
Earnings per share
Since there is no separate capitalization, nor are any shares of stock
specifically attributable to the Product Line upon which a per share
calculation can be based, earnings per share data is not presented in the
accompanying statements.
3. Relationship and Transactions with Raychem Corporation
The statements of operations include allocations to the Product Line of
certain administrative costs incurred by Raychem Corporation related to
facilities, sales, purchasing, human resources, management information
systems, accounting, credit and certain other corporate expenses. For the
years ended June 30, 1996 and 1995, these allocated costs were $3,049,000
and $2,285,000, respectively.
In the opinion of management, these allocations of expenses were made on a
reasonable basis. However, they are not necessarily indicative of the level
of expenses which may have been experienced on a standalone basis. The
F-7
<PAGE>
Nickel-Titanium Alloy Product Line
(A Business Unit of Raychem Corporation)
Notes to Statement of Assets Acquired and Statements of Operations
- --------------------------------------------------------------------------------
amounts that would have or will be incurred on a separate company basis
could differ significantly from the allocated amounts due to economies of
scale, differences in management and/or operational practices or other
factors.
4. Details of Inventory and Property and Equipment
Inventory consists of the following:
<TABLE>
<S> <C>
Raw materials $ 204,000
Work in progress 1,037,000
Finished goods 152,000
----------
$1,393,000
==========
Property and equipment consist of the following:
Machinery and equipment $2,636,000
Leasehold improvements 2,050,000
----------
4,686,000
Less accumulated depreciation and amortization (3,005,000)
----------
$1,681,000
==========
</TABLE>
5. Restructuring Charges
During the year ended June 30, 1996, the Product Line recorded a
restructuring charge totaling $678,000. The restructuring charge primarily
represents severance costs for employees that will not be retained by Memry
or Raychem. In addition, during the year ended June 30, 1995, the Product
Line recorded a restructuring charge totaling $280,000, primarily
representing severance costs for employees of the Product Line, in
connection with steps taken by Raychem to streamline its operations.
F-8
<PAGE>
Pro Forma Financial Information
-------------------------------
The accompanying unaudited pro forma consolidated statements of operations
are presented to illustrate the effect of the June 28, 1996 acquisition by Memry
Corporation of Raychem Corporation's Nickel-Titanium Alloy Product Line on Memry
Corporation's Statements of Operations for the fiscal years ended June 30, 1995
and 1996, as if such acquisition had occurred at July 1, 1994. While Memry's
stand-alone results of operations for the fiscal year ended June 30, 1995 have
been audited, the audit on Memry's results of operations for the fiscal year
ended June 30, 1996, has not yet been completed, and there can be no assurances
that the final audited results may not vary from the unaudited results set forth
herein.
The accompanying unaudited pro forma consolidated statements of operations
should be read in conjunction with the notes thereto appearing immediately
following the statements. The pro forma consolidated statements of operations
are presented for informational purposes only and are not necessarily indicative
of what actual results would have been had the acquisition taken place on July
1, 1994, nor do they purport to represent results of future operations of Memry.
F-9
<PAGE>
PRO FORMA FINANCIAL INFORMATION
MEMRY CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
----------------------------
Historical Raychem Other Pro Forma
----------- ----------- -- ----------- -----------
<S> <C> <C> <C> <C>
PRODUCT SALES $4,729,000 $6,238,000 A ($1,268,000) $9,699,000
COST OF SALES 4,147,000 3,856,000 B (775,000)
C (267,000)
D 335,000 7,296,000
----------- ----------- ----------- -----------
Gross profit 582,000 2,382,000 (561,000) 2,403,000
OPERATING EXPENSES
General, selling and administrative 2,374,000 2,957,000 B (1,461,000)
C (12,000)
E (884,000)
F 496,000
D 574,000 4,044,000
Research and development - 2,035,000 B (49,000)
C (25,000)
E (1,609,000)
F 85,000
D 50,000 487,000
Depreciation and amortization 240,000 - G 591,000 831,000
Restructuring charge - 280,000 J (280,000) -
----------- ----------- ----------- -----------
Total operating expenses 2,614,000 5,272,000 (2,524,000) 5,362,000
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (2,032,000) (2,890,000) 1,963,000 (2,959,000)
Interest expense, net 360,000 - - 360,000
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (2,392,000) (2,890,000) $1,963,000 (3,319,000)
----------- ----------- ----------- -----------
Provision for income taxes - - - -
----------- ----------- ----------- -----------
NET INCOME (LOSS) ($2,392,000) ($2,890,000) $ 1,963,000 ($3,319,000)
=========== =========== =========== ===========
Average Shares Outstanding
Including Common Stock Equivalents 5,353,222 - I 2,000,000 7,353,222
LOSS PER SHARE ($0.45) ($0.45)
=========== =========== =========== ===========
</TABLE>
F-10
<PAGE>
PRO FORMA FINANCIAL INFORMATION
MEMRY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
----------------------------
Historical Raychem Other Pro Forma
----------- ----------- -- ----------- -----------
<S> <C> <C> <C> <C>
PRODUCT SALES $3,691,000 $11,169,000 A ($2,804,000) $12,056,000
COST OF SALES 3,323,000 4,897,000 B (830,000)
C (283,000)
D (329,000) 7,436,000
----------- ----------- ----------- -----------
Gross profit 368,000 6,272,000 (2,020,000) 4,620,000
OPERATING EXPENSES
General, selling and administrative 2,123,000 2,478,000 B (1,864,000)
C (58,000)
E (548,000)
F 436,000
D 572,000 3,139,000
Research and development - 1,884,000 B (356,000)
C (28,000)
E (1,132,000)
F 85,000
D 50,000 503,000
Depreciation and amortization 90,000 - G 591,000 681,000
Restructuring charge - 678,000 J (678,000) -
----------- ----------- ----------- -----------
Total operating expenses 2,213,000 5,040,000 (2,930,000) 4,323,000
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (1,845,000) 1,232,000 910,000 297,000
Interest expense, net 297,000 - - 297,000
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (2,142,000) 1,232,000 910,000 -
----------- ----------- ----------- -----------
Provision for income taxes - 40,000 H 30,000 70,000
----------- ----------- ----------- -----------
NET INCOME (LOSS) ($2,142,000) $1,192,000 $880,000 ($70,000)
=========== =========== =========== ===========
Average Shares Outstanding Including
Common Stock Equivalents 8,280,452 - I 1,995,838 10,276,290
LOSS PER SHARE ($0.26) ($0.01)
=========== =========== =========== ===========
</TABLE>
F-11
<PAGE>
Notes to the Unaudited Pro Forma Financial Information
------------------------------------------------------
A Pursuant to an agreement between Memry Corporation ("Memry") and Raychem
Corporation ("Raychem"), Raychem will act as Memry's exclusive distributor
for certain products within a defined Field of Use, and Memry will sell
such products to Raychem at a discount from the anticipated resale price by
Raychem to its customers. Because the historical information reflects
sales by Raychem to its customers, the adjustment reflects the discount at
which Memry would have sold such products to Raychem.
B To reflect the elimination of Raychem's corporate allocations which include
sales, marketing and distribution costs relating to the sale of certain
products now sold to Raychem pursuant to the agreement as described in Note
A above. Pursuant to Note D, pro forma Memry corporate allocations are
provided for.
C To reflect the elimination of Raychem's depreciation expenses. Pursuant to
Note G, depreciation and amortization in the manner that Memry will be
depreciating and amortizing the property acquired from Raychem is provided
for.
D To provide for Memry's corporate allocations. See also Note B above.
E To reflect the elimination of all Raychem's payroll expenses. Pursuant to
Note F, pro forma Memry payroll expenses are provided for. Much of the
eliminated payroll relates to research and development activities relating
to certain medical applications which were not acquired by Memry.
F To provide for Memry's pro forma payroll expenses to operate the acquired
business, based upon actual post-acquisition costs. See also Note E above.
G To provide for Memry's pro forma depreciation and amortization of the
assets acquired from Raychem. This includes: depreciation of $2,700,000
of machinery and equipment over an estimated annual life of 7 years, for
$385,714 per year; (ii) amortization of $2,000,000 of patents and patent
rights over an estimated useful life of 15 years, for $133,333 per year;
(iii) amortization of $321,500 of acquisition costs over an estimated
useful life of 15 years, for $21,433 per year; (iv) amortization of $36,000
of deferred financing costs over the 5 year life of the related debt, for
$7,200 per year; and (v) amortization of $666,779 of acquired goodwill over
15 years, for $44,452 per year.
H To provide for the difference between (i) $70,000 of California state
income taxes, which would have been recorded based on the pro forma
profitability of Memry's California operations, minus (ii) the $40,000 of
federal alternative minimum taxes recorded by Raychem (which would not have
been recorded due to Memry's operating losses on a pro forma basis).
F-12
<PAGE>
I To treat the sale of 2,000,000 shares of Memry's Common Stock that occurred
on June 28, 1996, in order to finance the acquisition as if the sale had
occurred on July 1, 1994. The pro forma adjustment for fiscal 1996 is less
than 2,000,000 shares because the shares were included in actual numbers
for the last three days of fiscal 1996.
J To reflect the elimination of restructuring charges taken by Raychem.
F-13
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION WHERE, OR TO
ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF.
----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
====
<S> <C>
Available Information........................ 2
Risk Factors................................. 3
Updates to Description of Business........... 7
Use of Proceeds.............................. 7
Selling Stockholders......................... 8
Description of Securities.................... 12
Plan of Distribution......................... 12
Certain Financial Information................ 13
Limitation of Liability and Indemnification
Matters..................................... 13
Incorporation by Reference................... 14
Legal Matters................................ 15
Experts...................................... 15
Index to Financial Statements................ F-1
----------------------------
</TABLE>
UNTIL MARCH 12, 1997 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
================================================================================
- --------------------------------------------------------------------------------
3,550,630 SHARES
MEMRY CORPORATION
----------------------------
COMMON STOCK, $0.01 PAR VALUE PER SHARE
----------------------------
PROSPECTUS
JANUARY 31, 1997
----------------------------
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses of this offering, all
of which are to be paid by the Registrant. All amounts are estimated except for
the Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee............ $ 1,921.44
Accountants' fees and expenses.. 5,000.00
Attorneys' fees and expenses.... 20,000.00
Printing expenses............... 2,000.00
Miscellaneous................... 5,000.00
----------
Total...................... $33,921.44
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a corporation incorporated under the General Corporation Law to
indemnify its directors, officers, employees and agents and its former
directors, officers, employees and agents and those who serve in such capacities
with another enterprise at its request, against expenses (including attorneys'
fees), as well as judgments, fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), in
which they or any of them were or are made parties or are threatened to be made
parties by reason of their serving or having served in such capacity. The power
to indemnify shall only exist where such officer, director, employee or agent
has acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, in the case of a criminal
action, such person had no reasonable cause to believe his conduct was unlawful.
In a threatened, pending or completed action or suit by or in the right of the
corporation, the corporation may indemnify such person only for expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that if such person has
been adjudged liable to the corporation then the corporation shall have no power
of indemnification unless and only to the extent that a court shall determine
upon application. Indemnity is mandatory as to expenses (including attorneys'
fees) actually and reasonably incurred by a director, officer, employee or agent
of a corporation to the extent a claim, issue or matter has been successfully
defended. Expenses (including attorneys' fees) incurred by an officer or
director in defending any such action, suit or proceeding may be paid by the
corporation in advance of final disposition upon receipt of an undertaking by or
on behalf of such person to repay such amount if it is ultimately determined
that he is not entitled to be indemnified by the corporation. Indemnification
is not deemed exclusive of any other rights to which those indemnified may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise. The determination to make indemnification pursuant to
Section 145 shall be made by (i) a majority vote of disinterested directors even
though less than a quorum, (ii) if there are no such directors or if such
directors so direct, by independent legal counsel in a written opinion, or (ii)
by the stockholders. A Delaware corporation also has the power to purchase and
maintain insurance on behalf of the persons it has the power to indemnify,
whether or not indemnity against such liability would be allowed under the
statute.
Article VIII of the By-Laws of the Company provides as follows:
The Corporation shall, to the fullest extent permitted by subsections (a)
through (e) of Section 145 of the General Corporation Law of the State of
Delaware (as such statute may, from time to time, be amended), indemnify
any and all persons whom it shall have power to indemnify against any and
all expenses, liabilities and other matters.
II-1
<PAGE>
The Certificate of Incorporation of the Company was amended in June 1989,
as permitted by the Delaware General Corporation Law, pursuant to a vote of its
stockholders, to provide that, to the fullest extent permissible under the
Delaware General Corporation Law, directors of the Company shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of the fiduciary duty as a director except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for improper dividend payment or
unlawful stock purchases or redemption, or (iv) for any transaction from which
the director derived an improper personal benefit.
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
5 Opinion of Finn Dixon & Herling LLP as to the legality of the securities being registered (12)
10.1 Employment Agreement, dated January 1, 1990, between the Company and Ming H. Wu (1)
10.2 Lease Agreement, dated January 24, 1991, between the Company and Brookfield Commerce, (2)
relating to 57 Commerce Drive, Brookfield, CT
10.3 SBIR Contract, dated August 6, 1992, between the Company and the U.S. Air Force (4)
10.4 Warrant Issued to Connecticut Innovations, Inc. ("CII") as of March 1, 1992 (3)
10.5 Employment Agreement, dated September 24, 1993, between the Company and James G. Binch (5)
10.6 Warrant issued to American Equities Overseas Inc., pursuant to Placement Agreement of (5)
September 8, 1993
10.7 Warrant issued to American Equities Overseas Inc., pursuant to Placement Agreement of (5)
November 22, 1993
10.8 Agreement, dated January 25, 1993, between the Company and Sciatec, Inc. (5)
10.9 Memry Corporation Stock Option Plan adopted as of July 19, 1994 (6)
10.10 SBIR Contract dated December 9, 1993 between the Company and NASA (6)
10.11 Letter Agreement dated as of October 12, 1994 between the Company and Harbour Holdings Limited (6)
Partnership regarding Series A Preferred stock conversion calculation
10.12 Employee Non-Disclosure Agreement, dated as of October 18, 1994, between the Company and (6)
James G. Binch
10.13 Employee Non-Disclosure Agreement, dated as of January 24, 1994, between the Company and (6)
Wendy A. Gavaghan
10.14 Convertible Subordinated Debenture Purchase Agreement, dated as of December 22, 1994, (9)
between the Company and CII
10.15 Escrow Agreement, dated as of December 22, 1994, among the Company, CII and Finn (9)
Dixon & Herling as escrow agent
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
10.16 Letter Agreement, dated May 22, 1995, between Harbour Holdings Limited Partnership and the (7)
Company regarding conversion of Series A and Series B Preferred Stock and issuance of shares
of Common Stock as payment in full of accrued dividends.
10.17 Form of Securities Purchase Agreement relating to sales of Series G Preferred Stock of Memry Corporation (7)
10.18 Employment Agreement, dated November 7, 1995, between the Company and William H. Morton, Jr. (7)
10.19 First Amendment to Convertible Subordinated Debenture Purchase Agreement, dated October 11, 1995, (7)
between the Company and CII
10.20 First Addendum to Convertible Subordinated Debenture, dated October 11, 1995, made by the Company (7)
and agreed to by CII
10.21 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-4), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.22 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-5), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.23 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-6), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.24 Amendment to Escrow Agreement, dated October 11, 1995, among the Company, CII and Finn Dixon (7)
& Herling as escrow agent
10.25 Second Amendment to Convertible Subordinated Debenture Purchase Agreement, dated as of June 28, 1996,
between Memry and CII (9)
10.26 Second Amendment to Escrow Agreement, dated as of June 28, 1996, among Memry, CII and Finn Dixon &
Herling as escrow agent (9)
10.27 Amended an Restated Class I Warrant Certificate (Warrant Certificate No. 94-4A) issued by the (9)
Company to CII
10.28 Amended and Restated Class II Warrant Certificate (Warrant Certificate No. 94-5A) issued by the (9)
Company to CII
10.29 Second Addendum to Class III Warrants issued by the Company to CII (9)
10.30 Sublease, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.31 Tinel-Lock Supply Agreement, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.32 Private Label/Distribution Agreement, dated as of June 28, 1996, between the Company and Raychem
Corporation* (9)
10.33 Warrant Certificate exercisable for 1,130,000 shares of Common Stock, dated June 28, 1996, issued by
the Company to Raychem Corporation (10)
10.34 Warrant Certificate exercisable for 1,250,000 shares of Common Stock, dated June 28, 1996, issued by
the Company to Raychem Corporation (10)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
10.35 Finders Fee Agreement, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.36 Amended and Restated Asset Purchase Agreement between the Company and Raychem Corporation, (10)
dated May 10, 1996.
10.37 Letter Agreement, dated June 20, 1996, between Memry Corporation and Raychem Corporation. (10)
10.38 Amendment No. 1 to Amended and Restated Purchase Agreement between Memry Corporation and (10)
Raychem Corporation, dated June 28, 1996.
10.39 Amendment No.2 to Amended and Restated Purchase Agreement between Memry Corporation and Raychem (9)
Corporation, dated August 11, 1996.
10.40 Amendment to Lease Agreement between the Company and Brookfield Commerce relating to 57 (9)
Commerce Drive, Brookfield, CT.
10.41 Securities Purchase Agreement, dated as of June 14, 1996 between Memry Corporation and (9)
Wendy A. Gavaghan
10.42 Warrant Cert. No. 97-1, dated as of January 25, 1997, issued to Dominion Financial Group (12)
International, LDC
10.43 Warrant Cert. No. 96-5, dated as of July 15, 1996, issued to Dawn M. Morton (9)
10.44 Form of Securities Purchase Agreement relating to sales of Common Stock at $2.00 per share on (9)
June 28, 1996
10.45 Commercial Revolving Loan, Term Loan and Security Agreement, dated August 9, 1996, among the (9)
Company, Wright Machine Corporation and Affiliated Business Credit Corporation
10.46 Mortgage and Security Agreement dated as of August 9, 1996, from Wright Machine Corporation (9)
and Affiliated Business Credit Corporation
10.47 Letter Agreement, dated June 26, 1996, between Memry Corporation and James Proft (9)
10.48 Warrant Certificate No. 96-7, dated September 19, 1996, issued to James Proft (9)
10.49 Letter Agreement, dated as of May 29, 1996, between Memry Corporation and Dominion Capital (9)
Partners re: stock issuance
10.50 Securities Purchase Agreement, dated as of December 9, 1994, between Memry Corporation and (9)
Dominion Partners
10.51 Warrant Cert. No. 94-3, dated as of December 23, 1994, issued to Banque Pour L'Industrie (9)
Francaise (ref: GAN)
10.52 Securities Purchase Agreement, dated as of December 21, 1994, between Memry Corporation and (9)
Banque Pour L'Industrie Francaise (ref: GAN)
10.53 Securities Purchase Agreement, dated as of May 22, 1995, between Memry Corporation and Banque (9)
Pour L'Industrie Francaise (ref: GAN)
10.54 Securities Purchase Agreement, dated as of June 22, 1995, between Memry Corporation and (9)
Nicholas Grant
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- --------- ---------------------- ----------
<S> <C> <C>
10.55 Employee Agreement on Inventions and Patents, between the Company and James G. Binch (9)
11 Statement re: Computation of Per Share Earnings (7)
13 The Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1996 (11)
23.1 Consent of McGladrey & Pullen, LLP (12)
23.2 Consent of Price Waterhouse LLP (12)
23.3 Consent of Finn Dixon & Herling LLP (13)
24 Power of Attorney (14)
</TABLE>
- ----------
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1990.
(2) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1991.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991.
(4) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1992.
(5) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1993.
(6) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1994.
(7) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1995.
(8) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1995.
(9) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1996, as amended.
(10) Incorporated by reference to the Company's Current Report on Form 8-K filed
July 15, 1996.
(11) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1996, as amended.
(12) Submitted electronically.
(13) Included in the opinion of Finn Dixon & Herling LLP under Exhibit 5.
(14) Previously filed.
* Subject to a confidential treatment request, which has been granted.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes the following:
(1) File, during any period in which securities are offered or sold
hereunder, a post-effective amendment to this registration statement to:
II-5
<PAGE>
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, to treat each post-
effective amendment as a new registration statement of the securities offered
and that offering of the securities at that time as the initial bona fide
offering of those securities.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the latter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, in the Town of
Brookfield, State of Connecticut on January 28, 1997.
MEMRY CORPORATION
By:/s/ James G. Binch
---------------------------------------------
Name: James G. Binch
Title: Chairman of the Board, President,
Chief Executive Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ James G. Binch Chairman of the Board, January 28, 1997
- -------------------------- President, Chief Executive
James G. Binch Officer and Treasurer
(Principal Executive Officer)
/s/ Wendy A. Gavaghan Corporate Controller January 28, 1997
- -------------------------- (Principal Financial
Wendy A. Gavaghan Officer)
* Director January 28, 1997
- --------------------------
Nicholas J. Grant
* Director January 28, 1997
- --------------------------
Jack H. Halperin
* Director January 28, 1997
- --------------------------
W. Andrew Krusen, Jr.
* Director January 28, 1997
- --------------------------
John A. Morgan
*By /s/ James G. Binch
----------------------------------
James G. Binch, Attorney-in-fact
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
5 Opinion of Finn Dixon & Herling LLP as to the legality of the securities being registered (12)
10.1 Employment Agreement, dated January 1, 1990, between the Company and Ming H. Wu (1)
10.2 Lease Agreement, dated January 24, 1991, between the Company and Brookfield Commerce, (2)
relating to 57 Commerce Drive, Brookfield, CT
10.3 SBIR Contract, dated August 6, 1992, between the Company and the U.S. Air Force (4)
10.4 Warrant Issued to Connecticut Innovations, Inc. ("CII") as of March 1, 1992 (3)
10.5 Employment Agreement, dated September 24, 1993, between the Company and James G. Binch (5)
10.6 Warrant issued to American Equities Overseas Inc., pursuant to Placement Agreement of (5)
September 8, 1993
10.7 Warrant issued to American Equities Overseas Inc., pursuant to Placement Agreement of (5)
November 22, 1993
10.8 Agreement, dated January 25, 1993, between the Company and Sciatec, Inc. (5)
10.9 Memry Corporation Stock Option Plan adopted as of July 19, 1994 (6)
10.10 SBIR Contract dated December 9, 1993 between the Company and NASA (6)
10.11 Letter Agreement dated as of October 12, 1994 between the Company and Harbour Holdings Limited (6)
Partnership regarding Series A Preferred stock conversion calculation
10.12 Employee Non-Disclosure Agreement, dated as of October 18, 1994, between the Company and (6)
James G. Binch
10.13 Employee Non-Disclosure Agreement, dated as of January 24, 1994, between the Company and (6)
Wendy A. Gavaghan
10.14 Convertible Subordinated Debenture Purchase Agreement, dated as of December 22, 1994, (9)
between the Company and CII
10.15 Escrow Agreement, dated as of December 22, 1994, among the Company, CII and Finn (9)
Dixon & Herling as escrow agent
10.16 Letter Agreement, dated May 22, 1995, between Harbour Holdings Limited Partnership and the (7)
Company regarding conversion of Series A and Series B Preferred Stock and issuance of shares
of Common Stock as payment in full of accrued dividends.
10.17 Form of Securities Purchase Agreement relating to sales of Series G Preferred Stock of Memry Corporation (7)
10.18 Employment Agreement, dated November 7, 1995, between the Company and William H. Morton, Jr. (7)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
10.19 First Amendment to Convertible Subordinated Debenture Purchase Agreement, dated October 11, 1995, (7)
between the Company and CII
10.20 First Addendum to Convertible Subordinated Debenture, dated October 11, 1995, made by the Company (7)
and agreed to by CII
10.21 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-4), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.22 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-5), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.23 First Addendum to Stock Subscription Warrant (re: Warrant No. 94-6), dated October 11, 1995, made by the (7)
Company and agreed to by CII
10.24 Amendment to Escrow Agreement, dated October 11, 1995, among the Company, CII and Finn Dixon (7)
& Herling as escrow agent
10.25 Second Amendment to Convertible Subordinated Debenture Purchase Agreement, dated as of June 28, 1996,
between Memry and CII (9)
10.26 Second Amendment to Escrow Agreement, dated as of June 28, 1996, among Memry, CII and Finn Dixon &
Herling as escrow agent (9)
10.27 Amended an Restated Class I Warrant Certificate (Warrant Certificate No. 94-4A) issued by the (9)
Company to CII
10.28 Amended and Restated Class II Warrant Certificate (Warrant Certificate No. 94-5A) issued by the (9)
Company to CII
10.29 Second Addendum to Class III Warrants issued by the Company to CII (9)
10.30 Sublease, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.31 Tinel-Lock Supply Agreement, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.32 Private Label/Distribution Agreement, dated as of June 28, 1996, between the Company and Raychem
Corporation* (9)
10.33 Warrant Certificate exercisable for 1,130,000 shares of Common Stock, dated June 28, 1996, issued by
the Company to Raychem Corporation (10)
10.34 Warrant Certificate exercisable for 1,250,000 shares of Common Stock, dated June 28, 1996, issued by
the Company to Raychem Corporation (10)
10.35 Finders Fee Agreement, dated as of June 28, 1996, between the Company and Raychem Corporation (10)
10.36 Amended and Restated Asset Purchase Agreement between the Company and Raychem Corporation, (10)
dated May 10, 1996.
10.37 Letter Agreement, dated June 20, 1996, between Memry Corporation and Raychem Corporation. (10)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
10.38 Amendment No. 1 to Amended and Restated Purchase Agreement between Memry Corporation and (10)
Raychem Corporation, dated June 28, 1996.
10.39 Amendment No.2 to Amended and Restated Purchase Agreement between Memry Corporation and (9)
Raychem Corporation, dated August 11, 1996.
10.40 Amendment to Lease Agreement between the Company and Brookfield Commerce relating to 57 (9)
Commerce Drive, Brookfield, CT.
10.41 Securities Purchase Agreement, dated as of June 14, 1996 between Memry Corporation and (9)
Wendy A. Gavaghan
10.42 Warrant Cert. No. 97-1, dated as of January 25, 1997, issued to Dominion Financial Group (12)
International, LDC
10.43 Warrant Cert. No. 96-5, dated as of July 15, 1996, issued to Dawn M. Morton (9)
10.44 Form of Securities Purchase Agreement relating to sales of Common Stock at $2.00 per share on (9)
June 28, 1996
10.45 Commercial Revolving Loan, Term Loan and Security Agreement, dated August 9, 1996, among the (9)
Company, Wright Machine Corporation and Affiliated Business Credit Corporation
10.46 Mortgage and Security Agreement dated as of August 9, 1996, from Wright Machine Corporation (9)
and Affiliated Business Credit Corporation
10.47 Letter Agreement, dated June 26, 1996, between Memry Corporation and James Proft (9)
10.48 Warrant Certificate No. 96-7, dated September 19, 1996, issued to James Proft (9)
10.49 Letter Agreement, dated as of May 29, 1996, between Memry Corporation and Dominion Capital (9)
Partners re: stock issuance
10.50 Securities Purchase Agreement, dated as of December 9, 1994, between Memry Corporation and (9)
Dominion Partners
10.51 Warrant Cert. No. 94-3, dated as of December 23, 1994, issued to Banque Pour L'Industrie (9)
Francaise (ref: GAN)
10.52 Securities Purchase Agreement, dated as of December 21, 1994, between Memry Corporation and (9)
Banque Pour L'Industrie Francaise (ref: GAN)
10.53 Securities Purchase Agreement, dated as of May 22, 1995, between Memry Corporation and Banque (9)
Pour L'Industrie Francaise (ref: GAN)
10.54 Securities Purchase Agreement, dated as of June 22, 1995, between Memry Corporation and (9)
Nicholas Grant
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page
- ------- ---------------------- ----------
<S> <C> <C>
10.55 Employee Agreement on Inventions and Patents, between the Company and James G. Binch (9)
11 Statement re: Computation of Per Share Earnings (7)
13 The Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1996 (11)
23.1 Consent of McGladrey & Pullen, LLP (12)
23.2 Consent of Price Waterhouse LLP (12)
23.3 Consent of Finn Dixon & Herling LLP (13)
24 Power of Attorney (14)
</TABLE>
- ---------
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1990.
(2) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1991.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991.
(4) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1992.
(5) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1993.
(6) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1994.
(7) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1995.
(8) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1995.
(9) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1996, as amended.
(10) Incorporated by reference to the Company's Current Report on Form 8-K filed
July 15, 1996.
(11) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1996, as amended.
(12) Submitted electronically.
(13) Included in the opinion of Finn Dixon & Herling LLP under Exhibit 5.
(14) Previously filed.
* Subject to a confidential treatment request, which has been granted.
<PAGE>
EXHIBIT 5
FINN DIXON & HERLING LLP
ATTORNEYS AT LAW
ONE LANDMARK SQUARE
STAMFORD, CONNECTICUT 06901
TELEPHONE (203) 325-5000
FACSIMILE (203) 348-5777
January 31, 1997
Memry Corporation
57 Commerce Drive
Brookfield, Connecticut 06804
Re: Memry Corporation -- Registration Statement on Form S-2 (No. 333-15201)
-----------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Memry Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a registration statement on Form S-2
(No. 333-15201), as amended by Amendment No. 1 dated January 31, 1997 (as so
amended, the "Registration Statement"), of the Company, covering the offer and
sale of 3,550,630 shares of the Common Stock, $0.01 par value per share (the
"Shares"), all of which shares are to be sold by certain selling stockholders
(the "Selling Stockholders").
In rendering the opinion set forth herein, we have examined executed
copies, telecopies or photocopies of: (i) the Registration Statement; (ii) the
Certificate of Incorporation, as amended, the By-laws, as amended, and minute
books of the Company; and (iii) such other records, documents, certificates and
other instruments as in our judgment are necessary or appropriate as a basis for
the opinion expressed below. In our examination of such documents we have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies, and the authenticity of the originals of such copies. As
to any facts material to this opinion which we did not independently establish
or verify, we have relied upon statements and representations of officers and
other representatives of the Company.
Based upon the foregoing, and in reliance thereon, and subject to the
qualifications, assumptions and exceptions heretofore and hereinafter set forth,
we are of the opinion that the Shares to be sold by the Selling Stockholders
have been duly authorized and validly issued and are fully paid and
nonassessable.
<PAGE>
Memry Corporation
Page 2
January 30, 1997
We do not express, or purport to express, any opinion with respect to the
laws of any jurisdiction other than the General Corporation Law of the State of
Delaware and the federal securities laws of the United States of America.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and further consent to the use of our name under the
heading "Legal Matters" in the Registration Statement and the Prospectus which
forms a part thereof. In giving this consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder by the Securities and Exchange Commission. This opinion is given as
of the date hereof and we assume no obligation to update or supplement this
opinion to reflect any facts or circumstances which may hereafter occur or come
to our attention or any changes in law which may hereafter occur.
Very truly yours,
/s/ Finn Dixon & Herling LLP
<PAGE>
Exhibit 10.42
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN AND WILL
BE SOLD IN RELIANCE UPON EXEMPTIONS THEREUNDER. THE SALE OR OTHER DISPOSITION OF
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF IS RESTRICTED IN
ACCORDANCE WITH THAT ACT AND THOSE LAWS, MAY ONLY BE MADE PURSUANT TO A
REGISTRATION UNDER THAT ACT AND THOSE LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION AND, IN THE EVENT OF SUCH AN UNREGISTERED SALE OR OTHER
DISPOSITION, IS PROHIBITED UNLESS MEMRY CORPORATION RECEIVES AN OPINION OF
COUNSEL SATISFACTORY TO IT AND ITS COUNSEL THAT SUCH SALE OR OTHER DISPOSITION
CAN BE MADE WITHOUT REGISTRATION UNDER THAT ACT OR THOSE LAWS.
Warrant Cert. No. 97-1 Warrants to Purchase
18,000 Shares of
Common Stock
TRANSFERABLE WARRANTS
TO PURCHASE COMMON STOCK OF
MEMRY CORPORATION
THIS CERTIFIES THAT, for value received, Dominion Financial Group
International, LDC with an address of 2907 Bay-to-Bay Boulevard, Suite 200,
Tampa, Florida 33629, 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 the
date hereof to and including the "Final Exercise Date" (as hereinafter defined),
18,000 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 One and 50/100
Dollars ($1.50) per share, subject to adjustment as hereinafter provided.
Certain capitalized terms used in this Warrant Certificate and not
otherwise defined are defined in paragraph 8 hereof. By accepting this Warrant
Certificate, the holder agrees to be bound by the terms hereof.
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,
<PAGE>
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 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. Representations and Warranties of Holder. Each holder of the Warrants
and Warrant Shares, by acceptance hereof, represents and warrants to the Company
and acknowledges and intends that the Company rely thereon, as follows:
(a) Such holder will not sell, assign, pledge, transfer, or
otherwise dispose of, whether directly or indirectly, all or a portion of the
Warrants or any Warrant Shares obtained upon the exercise of any Warrants to any
person or entity without complying with applicable securities laws and the
transaction restrictions set forth in paragraph 4 hereof;
(b) Such holder is acquiring the Warrants and any Warrant Shares
obtained upon exercise of any Warrants for its own account, for investment
purposes only and not with a view to any distribution of such Warrants or
Warrant Shares and no other person has a direct or indirect beneficial interest
in such Warrants or the Warrant Shares;
(c) Such holder acknowledges and agrees that the Company has
informed it that the Warrants and the Warrant Shares are not registered under
any securities laws, are subject to substantial restrictions on transfer, and
may not be transferred for an indefinite period of time;
(d) Such holder has investigated the purchase of the Warrants and
the Warrant Shares to the extent it deems necessary or
2
<PAGE>
desirable, and the Company has provided it with any assistance in connection
therewith which it has requested. Such holder has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the acquisition of the Warrants and the Warrant Shares and of
making an informed investment decision with respect thereto and it has the
ability to bear the economic risk of an investment in the Company and to
withstand a complete loss of its investment. Such holder is financially able to
hold the Warrants and the Warrant Shares for an indefinite period of time;
(e) Such holder 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
it has been furnished by the Company with all information such holder has deemed
necessary or appropriate in order to form an informed investment decision
concerning the purchase of the Warrants and the Warrant Shares. Such holder has
been afforded an opportunity to ask questions of, and receive answers from,
representatives of the Company concerning the terms and conditions of such
holder's purchase of Warrants and any Warrant Shares 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) Such holder has not used a purchaser
representative;
(g) Such holder 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;
(h) Such holder (a) has not been organized for the purpose of
purchasing the Warrants and any Warrant Shares, or (b) has been organized for
the purpose of purchasing the Warrants and any Warrant Shares and has made the
representations and warranties contained herein with respect to and on behalf of
all of the beneficial owners thereof; and
(i) Such holder is an "accredited investor" as such term is defined
in Rule 501 adopted pursuant to the Securities Act.
The Company may condition any exercise of the Warrants and issuance of Warrant
Shares upon its receipt of the representations and covenants given above by the
original Warrant holder with respect to such Warrant Shares.
3. Indemnification. Each holder of this Warrant Certificate, by acceptance
hereof, hereby indemnifies, and agrees to hold harmless, the Company, each
corporation and entity
3
<PAGE>
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 the holder hereof or any breach of any of such
holder's representations and warranties.
4. Transaction Restrictions. Each holder of this Warrant Certificate, by
acceptance hereof, understands and acknowledges that none of these Warrants or
any Warrant Shares have been registered under the Securities Act and may not be
offered, sold, pledged, hypothecated or otherwise disposed of in the absence of
a registration statement in effect with respect to the offer and disposition of
said securities under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each holder of this Warrant
Certificate, by acceptance hereof, represents that it will offer or sell the
Securities only in accordance with the Securities Act and, in the case of offers
and sales made in accordance with exemptions therefrom, only after having
delivered to the Company a satisfactory legal opinion that said offer and sale
is in effect so exempt. Each holder hereof agrees and acknowledges that every
certificate representing the Warrants and the Warrant Shares will bear a legend
to the foregoing effect.
5. Special Agreements of the Company. The Company covenants and agrees
that:
(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. The Company will not, by amendment of its
Certificate or Articles of Incorporation or
4
<PAGE>
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; 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.
6. (a) Certain Adjustments. 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
5
<PAGE>
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
6(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 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
6
<PAGE>
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;
(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
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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 Protect Rights. If any event or condition occurs as
to which other provisions of this paragraph 6 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, 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.
7. Piggy-back Registration Rights.
(a) Right to Piggy-back. If at any time prior to the Final Exercise
Date the Company proposes to file a registration statement in order to register
any of its equity securities (as defined in the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) under the Securities Act (other than in
connection with a merger, and acquisition or an offering of securities under an
employee benefit plan), and the registration form to be used may be used for the
registration (a "Piggy-Back Registration") of Warrants and Warrant Shares, the
Company will give prior written notice to all registered holders of Warrants and
Warrant Shares of its intention to effect such a registration and will, subject
to paragraph 7(b) and 7(c) hereof, include in such registration all Warrants and
Warrant Shares with respect to which the Company has received written requests
for inclusion therein within 20 days after the receipt of the Company's notice.
Notwithstanding the foregoing, the Company shall have the right at any time
after it shall have given written notice pursuant to paragraph 7(a)
(irrespective of whether a written request for inclusion of any Warrants and/or
Warrant Shares shall have been made) to elect not to file any such proposed
registration statement or to withdraw the same after the filing but prior to the
effective date thereof.
(b) Limitation on Inclusion. If the registration of which the
Company gives notice pursuant to paragraph 7(a) is for an underwritten offering,
only securities which are to be included in the underwriting may be included in
the registration. Notwithstanding any provision of paragraph 7(a) to the
contrary, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten or determines that any
other limitation is advisable, the underwriter may exclude or otherwise limit
the number of Warrants or Warrant Shares to be included in the registration and
underwriting. The Company shall so advise all holders (except those holders who
have not indicated to the Company their decision to distribute any of their
Warrants or Warrant Shares through such underwriting), and the number of
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Warrants and/or Warrant Shares that may be included in such registration and
underwriting, if any, shall be allocated among such holders as determined by the
Company or otherwise as the underwriter shall advise. No Warrants or Warrant
Shares excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any holder disapproved of
any such underwriting, such person may elect to withdraw therefrom by written
notice to the Company and the underwriter. The Warrants and Warrant Shares so
withdrawn from such underwriting shall also be withdrawn from such registration.
In addition, whether or not such registration is underwritten, the inclusion of
Warrants or Warrant Shares in any particular registration shall be subject to
the rights of existing security holders to bar or limit the inclusion thereof.
(c) Two Piggy-Back Registrations Only. The Company shall only be
obligated to offer the opportunity for two Piggy-Back Registrations, pursuant to
this paragraph 7, with respect to all Warrants and Warrant Shares.
(d) Expenses of Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings, or
qualifications pursuant to paragraph 7(a), 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 one counsel selected by the selling
holders of Warrants and Warrant Shares to represent them shall be borne and paid
by the Company.
(e) Registration Conditions and Obligations. The obligations of the
Company with respect to Piggy-Back Registrations under this paragraph 7 are
subject to the conditions that each holder of the Warrants and Warrant Shares
which are to be included in any registration:
(i) cooperates with the Company in preparing such
registration, and executed such agreements as may be reasonable
necessary in favor of any underwriter selected by the Company; and
(ii) promptly supplies the Company with all information,
documents, representations and agreements requested by the Company
and reasonably necessary in connection with the registration of such
holder's Warrants and Warrant Shares,
(iii) agrees not to effect sales of Warrants and Warrant
Shares 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.
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In connection with any Piggy-Back Registration involving an underwritten public
offering, each holder of Warrants and Warrant Shares included therein shall
agree, if requested by the underwriters, not to effect any public sale of
Warrant and Warrant Shares not included in such registration during the seven
(7) days prior to, and the ninety (90) day period beginning on the effective
date of such underwritten registration.
Each holder of the Warrants and Warrant Shares included in a registration
statement effected pursuant to this paragraph 7 shall, at the end of the period
during which the Company keeps the registration statement current and effective,
discontinue sales of Warrants and Warrant Shares pursuant to such registration
statement upon receipt of notice from the Company of its intention to remove
from registration the Warrants or Warrant Shares covered by such registration
statement which remain unsold, and such holder shall notify the Company of the
number of Warrants and Warrant Shares registered which remain unsold immediately
upon receipt of such notice from the Company.
(f) Opinion of Counsel as Alternative. The registration rights
granted to the holders of Warrants and Warrant Shares under this paragraph 7
shall be subject to the condition that any registration of Warrants and Warrant
Shares proposed to be effected need not be effected if the Company shall deliver
to the holders requesting such registration an opinion satisfactory to such
holders and their counsel to the effect that the proposed disposition for which
registration was requested does not require registration under the Securities
Act.
(g) Company's Registration Obligations. Whenever the Company is
required to register any Warrants and Warrant Shares pursuant to the terms
hereof, the Company will use its best efforts to effect the registration for
sale of such Warrants and Warrant Shares in accordance with the intended method
of disposition thereof and pursuant thereto the Company will as expeditiously as
reasonably possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect
to such Warrants and Warrant Shares, which registration statement
will state that the holders of Warrants and Warrant Shares covered
thereby may sell such Warrants and Warrant Shares under such
registration statement, and use its best efforts to cause such
registration statement to become effective and to remain effective
as provided herein; provided that before filing a registration
statement or prospectus or any amendments or supplements thereto,
the Company will furnish to counsel selected by a majority of the
holders of Warrants and Warrant Shares covered by such registration
statement copies of all such documents
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<PAGE>
proposed to be filed, which documents will be subject to the review
of such counsel;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective until two years after the date
hereof or until after distribution is completed (if sooner), and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement, including without limitation, (A) setting forth any
information necessary in order that such registration statement not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading, (B) reflecting in the prospectus included in such
registration statement any facts or events arising after the
effective date of such registration statement (or the most recent
post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement, (C) to include any prospectus
required by Section 10(a)(3) of the Securities Act, or (D) to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information therein;
(iii) Furnish to each seller of Warrants and Warrant Shares
such number of copies of such registration statement, each amendment
and supplement thereto, the prospectus included in such registration
statement including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to
facilitate the disposition of Warrants and Warrant Shares owned by
such seller;
(iv) Use its best efforts to register or qualify such Warrants
and Warrant Shares under such securities or blue sky laws of such
jurisdictions as may reasonably be requested and do any and all
other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such
jurisdictions of the Warrants and Warrant Shares owned by such
seller (provided that the Company shall not be required to (A)
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this paragraph
7(g)(iv), (B) subject
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<PAGE>
itself to taxation in any such jurisdiction or (C) consent generally
to service of process in any such jurisdiction);
(v) Notify each seller of such Warrants and Warrant Shares, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, when it becomes aware of the
happening of any event as a result of which the prospectus included
in such registration statement (as then in effect) contains an
untrue statement of a material fact or omits to state any fact
necessary to make the statements therein not misleading in light of
the circumstances then existing, and, as promptly as practicable
thereafter, prepare in sufficient quantities a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Warrants and Warrant Shares, such prospectus will
not contain an untrue statement of a material fact or omit to state
any fact necessary to make the statements therein not misleading in
light of the circumstances then existing;
(vi) Cause all such Warrants and Warrant Shares so requested
by the holders thereof to be listed on each securities exchange on
which similar securities issued by the Company are then listed.
(vii) Provide a transfer agent and registrar for all of such
Warrants and Warrant Shares not later than the effective date of
such registration statement;
(viii) Enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions as the holders of majority of the Warrants and Warrant
Shares to be included in the registration statement reasonably
request in order to expedite or facilitate the disposition of such
Warrants and/or Warrant Shares;
(ix) Make available for inspection by any seller of Warrants
and/or Warrant Shares, any underwriter participating in any
disposition pursuant to such registration statement, any attorney,
accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such seller, under writer, attorney,
accountant or agent in connection with such registration statement
to the extent such information is necessary in such seller's
reasonable
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judgment to satisfy any of its obligations under applicable law; and
(x) Use its best efforts to obtain an appropriate opinion for
the Company's counsel and a cold-comfort letter from the Company's
independent public accountants in customary form and covering such
matters of the type customarily covered by opinions of Company
counsel and cold-comfort letters in similar registrations as the
holders of a majority of the Warrants and Warrant Shares being sold
reasonably request.
Each holder of the Warrants and Warrant Shares shall be deemed to have agreed by
acquisition of such Warrants and Warrant Shares that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
paragraph 7(g)(v) hereof, such holder will forthwith discontinue such holder's
disposition of Warrants and Warrant Shares until such holder's receipt of the
copies of the supplemented or amended prospectus contemplated by paragraph
7(g)(v) hereof and, if so directed by the Company, will deliver to the Company
(at the holder's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus covering such Warrants and Warrant
Shares current at the time of receipt of such notice. In the event the Company
shall give any such notice, the period mentioned in paragraph 7(g)(ii) hereof
shall be extended by the number of days during such period from and including
the date of the giving of such notice to and including the date when each seller
of any Warrants and Warrant Shares covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by paragraph 7(g)(v) hereof.
(h) Indemnification.
(i) The Company agrees to indemnify, to the extent permitted
by law, each holder of the Warrants and Warrant Shares, its officers
and directors and each person who otherwise controls such holder
(within the meaning of the Securities Act) (collectively,
"Indemnitees") against all losses, claims, damages, liabilities and
expenses caused by any untrue statement of a material fact contained
in any registration statement (including any post-effective
amendment thereto), prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are
caused by any information furnished in writing to the Company by or
on behalf of such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto which the
Company is not required to
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<PAGE>
deliver after the Company has furnished such holder with a
sufficient number of copies of the same, or any violation by the
Company of the Securities Act or any rule or regulation promulgated
under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any
such registration, qualification or compliance. In connection with
an underwritten public offering, the Company will indemnify such
underwriters, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the
indemnification of the holders of Warrants and Warrant Shares.
(ii) The Company will reimburse each such Indemnitee for any
legal and other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability
or action; provided, however, that this paragraph 7(h)(ii) shall not
apply to amounts paid in settlement of any such claim, loss, 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 be liable in any such case for any
such claim, loss, damage, liability or action to the extent that it
(A) arises out of or is based upon any untrue statement or omission
so made in conformity with written information furnished to the
Company by such Indemnitee(s) and stated to be specifically for use
therein or (B) relates to any such untrue statement (or alleged
untrue statement) or omission (or alleged omission) made in the
preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration
statement becomes effective or in the amended prospectus filed with
the Commission pursuant to Rule 424(b), if such prospectus was not
furnished to the person or entity asserting the claim, loss, damage,
liability or action at or prior to the time such furnishing is
required by the Securities Act. This indemnification shall not be
deemed to relieve any underwriter of any of its due diligence
obligations.
(iii) In connection with any registration statement in which a
holder of Warrants and Warrant Shares is participating, each such
holder will furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection
with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify the Company, its directors
and officers and each person who
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controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses
resulting from any untrue statement of a material fact contained in
the registration statement (including any post-effective amendment
thereto), prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit
so furnished in writing by or on behalf of such holder; provided
that the obligation to indemnify will be several, not joint and
several, among such holders of and Warrants and Warrant Shares and
the liability of each such holder of Warrants and Warrant Shares
will be in proportion to and limited to the net amount received by
such holder from the sale of Warrants and Warrant Shares pursuant to
such registration.
(iv) Any person entitled to indemnification hereunder will (A)
give prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification (but the omission so
to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than
under this paragraph) and (B) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party will not be subject
to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim.
(v) The indemnification provided for under this Warrant will
remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or
controlling person of such indemnified party and will survive the
transfer of securities.
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8. 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 6(c) 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 July 16, 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.
9. 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 which may be purchased hereunder. Subject to compliance with
paragraph 2, this Warrant and all rights hereunder (including without limitation
all registration rights) are transferable in
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<PAGE>
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 8
shall be paid by the Company.
10. No Rights as Stockholder; Survival of Rights. Neither this Warrant
Certificate nor the Warrants 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.
11. 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.
12. 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.
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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 January 29, 1997.
MEMRY CORPORATION
By:/s/ James G. Binch
----------------------------------------
James G. Binch
President
[Corporate Seal]
ATTEST:
/s/ Wendy A. Gavaghan
- ------------------------------
Wendy A. Gavaghan
Secretary
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NOTICE OF ELECTION
TO: MEMRY CORPORATION
The undersigned, the registered holder of Warrant Cert. No. 96-4, 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:_____________________________
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EXHIBIT 23.1
Consent of McGladrey & Pullen, LLP
We hereby consent to the incorporation by reference of our report dated
September 24, 1996 in the Prospectus constituting part of this Registration
Statement on Form S-2, which appears on page F-1 of the Annual Report on Form
10-KSB of Memry Corporation for the fiscal year ended June 30, 1996, as amended
and to the reference to our Firm under the caption "Experts" in such Prospectus.
/s/ McGladrey & Pullen LLP
New Haven, Connecticut
January 30, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-2 of our report dated August 30, 1996 relating
to the statement of assets acquired as of June 28, 1996 and the statements of
operations for each of the two years ended June 30, 1996 of the Nickel-Titanium
Product Line of the Electronics Business Segment of Raychem Corporation, which
appears in such Prospectus. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Jose, California
January 28, 1997
