AMENDED AND RESTATED PROMISSORY NOTE


US $360,000                                          West Caldwell, New Jersey
                                                     May 4, 1998

     FOR VALUE  RECEIVED,  MASON N.  CARTER  ("Payor"),  hereby  unconditionally
promises to pay, in accordance  with the terms of this  promissory  note (as the
same may be amended from time to time, this "Promissory  Note"), to the order of
MERRIMAC  INDUSTRIES,  INC., a New Jersey  corporation,  or its  successors  and
assigns  ("Note  Holder"),  in lawful  money of the United  States of America in
immediately  available funds, on May 4, 2003 and in such account, at such place,
or to such party as Note Holder may designate in writing,  the principal  amount
of  Three   Hundred   Sixty   Thousand   Dollars  (US   $360,000).   Payor  also
unconditionally  promises to pay  interest  quarterly  in arrears  from the date
hereof (as specified  below) on the unpaid  principal  amount of this Promissory
Note  outstanding  from time to time at a rate  calculated  each 12-month period
beginning on the date hereof,  which rate is based upon the weighted  average of
the rates  announced  publicly  from  time to time  during  such  period by Note
Holder's primary lending bank (currently, Summit Bancorp) as its prime rate.

     Payment of this  Promissory  Note is secured by the Pledged  Collateral (as
defined in the Amended and Restated Pledge Agreement dated as of the date hereof
by Payor for the benefit of Note Holder (the  "Pledge  Agreement")),  including,
without limitation,  the Pledged Shares (as defined in the Pledge Agreement) and
any property or interest  provided in addition to or in substitution  for any of
the foregoing.

     Interest on the unpaid principal amount of this Promissory Note outstanding
from time to time shall  accrue  quarterly  in arrears  from the date hereof and
shall be paid on the 4th day of August,  November,  February  and May of each of
1998,  1999,  2000,  2001,  2002 and 2003,  except that  interest  accrued  from
November  1998 to November 1999 shall be paid to the Note Holder on May 4, 2003.
Interest shall be paid from dividends declared in respect of the Pledged Shares.
To the extent that in a given  quarter such  dividends are  insufficient  to pay
interest on the date when due,  then Payor shall be liable for the  remainder of
the interest payment then due.

     Payor may, at its option, prepay all or, from time to time, any part of the
unpaid principal balance of this Promissory Note, together with interest accrued
thereon, without payment of any premium or penalty.

     Payor hereby  waives  presentment,  demand,  notice,  protest and all other
demands and notices in connection  with the delivery,  acceptance,  performance,
default or enforcement of this Promissory Note.

     If Payor's  employment  with Note Holder is terminated  pursuant to Section
6(c) of the Amended and Restated  Employment  Agreement,  dated January 1, 1998,
between  Payor and Note  Holder,  then Note  Holder,  at its option,  by written
notice to Payor, may declare the entire principal amount of this Promissory Note
to be due and payable,  together with accrued  interest  thereon,  without other
notice, demand, presentment or protest, all of which are hereby waived by Payor.

     Payor shall not assign this Promissory  Note or its  obligations  hereunder
without the prior written consent of Note Holder.  This Promissory Note shall be
binding upon Payor and its  permitted  assigns and shall inure to the benefit of
Note Holder and its successors and assigns.

     This  Promissory  Note has been  executed and delivered in the State of New
Jersey and shall be governed by, and  construed  and  interpreted  in accordance
with,  the internal laws of the State of New Jersey without giving effect to any
conflicts  of  laws  provisions  of  such  State.  Payor  hereby  expressly  and
irrevocably agrees and consents that any suit, action, or proceeding arising out
of or relating to this Promissory Note may be instituted in any State.



                                                       /S/   Mason N. Carter
                                                       ---------------------
                                                             Mason N. Carter