Document:

THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “1933
ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR
(ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE 1933 ACT
IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS SUCH TRANSFER
IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.  THIS LEGEND
SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR THIS WARRANT OR ANY
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT.

     

    WARRANT
TO PURCHASE COMMON STOCK

     

    OF

     

    VECTOR
INTERSECT SECURITY ACQUISITION CORP.

     

    W121008-1

     

    This is
to certify that, FOR VALUE RECEIVED, Centurion Credit Group Master Fund
L.P., a Delaware limited partnership, or its assigns (“Holder”), is entitled
to purchase, subject to the provisions of this Warrant, from Vector Intersect
Security Acquisition Corp., a Delaware corporation (the “Company”), 100,000
shares of fully paid, validly issued and nonassessable shares of the common
stock of the Company, par value $.001 per share (“Common Stock”), at a
price of $8.00 per share. The number of shares of Common Stock to be received
upon the exercise of this Warrant and the price to be paid for each share of
Common Stock may be adjusted from time to time as hereinafter set
forth.  The shares of Common Stock deliverable upon such exercise, and
as adjusted from time to time, are hereinafter sometimes referred to as “Warrant Shares” and
the exercise price of a share Common Stock in effect at any time and as adjusted
from time to time is hereinafter sometimes referred to as the “Exercise
Price.”  This Warrant is issued pursuant to the terms of a Note
Purchase Agreement dated December 10, 2008.

     

    (a)           EXERCISE
OF WARRANT.

     

    (1)           This
Warrant may be exercised in whole or in part at any time or from time to time
from the date the Company consummates a Business Combination (as defined in the
Company’s certificate of incorporation) for a period of three years following
such date (the “Exercise Period”);
provided, however, that (i) if either such day is a day on which banking
institutions in the State of New York are authorized by law to close, then on
the next succeeding day which shall not be such a day, and (ii) in the
event of any merger, consolidation or sale of substantially all the assets of
the Company as an entirety, resulting in any distribution to the Company’s
stockholders, prior to termination of the Exercise Period, the Holder shall have
the right to exercise this Warrant commencing at such time through the
termination of the Exercise Period into the kind and amount of shares of stock
and other securities and property (including cash) receivable by a holder of the
number of shares of Common Stock into which this Warrant might have been
exercisable immediately prior thereto.  This Warrant may be exercised
by delivery to the Company in the manner set forth in this Section of this
Warrant, of the Purchase Form annexed hereto duly executed and accompanied by
payment of the Exercise Price for the number of Warrant Shares specified in such
form.  As soon as practicable after each such exercise of this
Warrant, but not later than seven (7) days following the receipt of good and
available funds, the Company shall issue and deliver to the Holder a certificate
or certificates for the Warrant Shares issuable upon such exercise, registered
in the name of the Holder or its designee.  If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder.  As of the end of business on the date of receipt by the
Company of the Purchase Form, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares shall not then be
physically delivered to the Holder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (2)           At
any time during the Exercise Period, the Holder may, at its option, exercise
this Warrant on a cashless basis by exchanging this Warrant, in whole or in part
(a “Warrant
Exchange”), into the number of Warrant Shares determined in accordance
with this Section (a)(2), by delivery to the Company of the duly completed
and executed Purchase Form.  The Warrant Exchange shall take place on
the date specified in the Purchase Form or, if later, the date the Purchase Form
is received by the Company (the “Exchange
Date”).  Certificates for the shares issuable upon such Warrant
Exchange and, if this Warrant should be exercised in part only, provided an
original Warrant is delivered to the Company, a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder, shall be issued as of the Exchange Date and delivered to
the Holder within seven (7) days following the Exchange Date.  In
connection with any Warrant Exchange, this Warrant shall represent the right to
subscribe for and acquire the number of Warrant Shares equal to (i) the
number of Warrant Shares specified by the Holder in its Purchase Form (the
“Total Number”)
less (ii) the number of Warrant Shares equal to the quotient obtained by
dividing (A) the product of the Total Number and the existing Exercise
Price by (B) Fair Market Value of a share of Common
Stock.  “Fair Market Value”
shall equal the 5 trading day average closing trading price of the Common Stock
on the relevant market or exchange for the 5 trading days preceding the date of
determination or, if the Common Stock is not listed or admitted to trading on
any market or exchange, and the average price cannot be determined as
contemplated above, the Fair Market Value of the Common Stock shall be as
reasonably determined in good faith by the Company’s Board of Directors with the
concurrence of the Holder.

     

    (b)           RESERVATION
OF SHARES.  The Company shall at all times reserve for issuance and/or
delivery upon exercise of the this Warrant such number of shares of Common Stock
as shall be required for issuance and delivery upon exercise of this
Warrant.

     

    (c)           FRACTIONAL
SHARES.  No fractional shares or scrips representing fractional shares
shall be issued upon the exercise of this Warrant.  With respect to
any fraction of a share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction multiplied by the
then Fair Market Value of a share of Common Stock, as defined in Section (a)(2)
above.

     

    (d)           LOSS
OR DESTRUCTION OF WARRANT.  Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date.  Any such new Warrant executed and delivered
shall constitute an additional contractual obligation on the part of the
Company, whether or not this Warrant so lost, stolen, destroyed, or mutilated
shall be at any time enforceable by anyone.

     

    (e)           RIGHTS
OF THE HOLDER.  The Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth
herein.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (f)           ANTI-DILUTION
PROVISIONS.

     

    (1)           In
case the Company shall hereafter (i) declare a dividend or make a distribution
on its outstanding Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification shall be adjusted so that it shall equal the
price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
action.  Such adjustment pursuant to this Section shall be made
successively whenever any event listed above shall occur.

     

    (2)           Whenever
the Exercise Price payable upon exercise of each Warrant is adjusted pursuant to
Subsection (1) above, the number of Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying the number of Shares
initially issuable upon exercise of this Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.

     

    (3)           Except
for permitted issuances, which shall mean (i) Common Stock or any other
securities exercisable or exchangeable for, or convertible into shares of Common
Stock issued pursuant to a “Business Combination” as such term is defined in the
Fourth Amended and Restated Certificate of Incorporation of the
Company,  (ii) Common Stock issued pursuant to a stock split or
subdivision, (iii) Common Stock issuable or issued to employees, consultants or
directors of the Company directly or pursuant to a stock plan or other
compensation arrangement, (iv) capital stock, debt instruments convertible into
capital stock or warrants or options to purchase capital stock issued in
connection with bona fide acquisitions, mergers, purchases, corporate partnering
agreements, joint ventures or similar transactions, and (v) Common Stock issued
or issuable upon exercise or conversion of any warrants, options or any other
securities exercisable or exchangeable for, or convertible into shares of Common
Stock outstanding as of the date hereof (“Permitted
Issuances”), in case the Company shall issue shares of its Common Stock
or any securities convertible into or exchangeable for its Common Stock for a
consideration per share of Common Stock or having a conversion or exercise price
less than the Exercise Price, the Exercise Price shall be immediately reset to
equal such lower price.

     

    (4)           Notwithstanding
the foregoing, no adjustment shall be effected due to, or as a result of, any
Permitted Issuances.

     

    (g)           NOTICES
TO WARRANT HOLDERS.  So long as this Warrant shall be outstanding,
(i) if the Company shall pay any dividend or make any distribution upon the
Common Stock or (ii) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of any class or any other
rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed to the Holder, at least fifteen days prior the date specified in
(x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of Common Stock or
other securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (h)           RECLASSIFICATION,
REORGANIZATION OR MERGER.  In case of any reclassification, capital
reorganization or other change of outstanding Common Stock of the Company, or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a subsidiary in which merger the Company
is the continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding Common Stock of the class
issuable upon exercise of this Warrant) or in case of any sale, lease or
conveyance to another corporation of the property of the Company as an entirety,
the Company shall, as a condition precedent to such transaction, cause effective
provisions to be made so that the Holder shall have the right thereafter by
exercising this Warrant at any time prior to the expiration of the Warrant, to
purchase the kind and amount of shares of stock and other securities and
property receivable upon such reclassification, capital reorganization and other
change, consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock that might have been purchased upon exercise of this
Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance.  Any such provision shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant.  The
foregoing provisions of this Section (h) shall similarly apply to
successive reclassifications, capital reorganizations and changes of Common
Stock and to successive consolidations, mergers, sales or
conveyances.  In the event that in connection with any such capital
reorganization or reclassification, consolidation, merger, sale or conveyance,
additional shares of Common Stock shall be issued in exchange, conversion,
substitution or payment, in whole or in part, for a security of the Company
other than Common Stock, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Section (f) hereof.

     

    (i)           MODIFICATION
OF AGREEMENT.  The provisions of this Warrant may from time to time be
amended, modified or waived, by the Company and the holder of this
Warrant.

     

    (j)           MAXIMUM
EXERCISE.  The Holder shall not be entitled to exercise this Warrant
on an exercise date, in connection with that number of shares of Common Stock
which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of
this Warrant with respect to which the determination of this limitation is being
made on an exercise date, which would result in beneficial ownership by the
Holder and its affiliates of more than 4.99% of the outstanding shares of Common
Stock on such date.  For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Rule 13d-3 thereunder.  Subject to the foregoing, the Holder shall not
be limited to aggregate exercises which would result in the issuance of more
than 4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to exercise this
Warrant to achieve an actual 4.99% or up to 9.99% ownership position as
described above, but not in excess of 9.99%.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (k)           NOTICES.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company, to:
Vector Intersect Security Acquisition Corp., 65 Challenger Road, Ridgefield
Park, NJ 07660, Attention:  Mr. Yaron Eitan, Facsimile: (201)
712-9498, and (ii) if to the Holder, to: Centurion Credit Group Master Fund
L.P., 152 West 57th Street,
54th
Floor, New York, NY 10019, Attention: Mr. David Levy,
Facsimile:  (212) 581-0002.

     

    (l)           LAW
GOVERNING THIS WARRANT.  This Warrant shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws.  Any action brought by either party
against the other concerning the transactions contemplated by this Warrant shall
be brought only in the state courts of New York or in the federal courts located
in the state and county of New York.  The parties to this Warrant
hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Warrant by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law.

     

    (Signature
page follows.)

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Dated:
December10, 2008

    

    
      
        
          
            
              	
                      VECTOR
      INTERSECT SECURITY ACQUISITION CORP.

                    
	 
	
                      By:  

                    	 
      
	 
      	
                      Name:  Yaron
      Eitan

                    
	 
      	
                      Title:  Chief
      Executive
Officer

                    

            

          

        

      

    

    

    Holder:

    

    
      
        
          	
                  CENTURION
      CREDIT GROUP MASTER FUND L.P.

                
	 
      	 
      
	
                  By:

                	 
      
	
                  Name:

                
	
                  Title:

                

        

      

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    PURCHASE
FORM

    (to be
signed only on exercise of Warrant)

     

    TO:  VECTOR
INTERSECT SECURITY ACQUISITION CORP.

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

    

    ___    ________
shares of the Common Stock covered by such Warrant; or

     

    ___    the
__________ shares of Common Stock covered by such Warrant pursuant to the
cashless exercise procedure set forth in Section (a) (2).

    

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

    

    ___     $__________
in lawful money of the United States; and/or

     

    ___     the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section (a)(2) of the Warrant to
exercise this Warrant with respect to the number of shares of Common Stock
purchasable pursuant to the cashless exercise procedure set forth in Section
(a)(2) employing an Exercise Price of $____ per Warrant Share or a Fair Market
Value of $________ per Warrant Share.

    

    The
number of Warrant Shares to be delivered is __________________.  The
number of Warrant Shares to be cancelled is _____________.

    

    The
undersigned requests that the certificates for such shares be issued in the name
of ________________ and delivered to:
_______________________________________________________________________________________________.

    

    
      
        
          
            
              	
                      Dated:__________________________

                    	 
      
	 
      	
                      (Signature)

                    
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                      (Address)

                    

            

          

        

      

    

    
      
         

      

      
        7Exhibit
10.1

    

    

    

    

    

    

    SEPARATION AGREEMENT AND
GENERAL RELEASE

    

    THIS SEPARATION AGREEMENT AND GENERAL
RELEASE (the
“Agreement”) is dated as of December 1, 2008, by and between Merrimac Industries,
Inc., with offices at 41 Fairfield Place, West Caldwell, New
Jersey 07006 (“Merrimac”), and Robert V. Condon,
residing at 222
Stanhope Road,
Sparta, New Jersey 07871
(“Condon”).

    

    WHEREAS, Condon’s last day of active
work and employment with Merrimac was November 6, 2008.  Since then,
Condon has been receiving vacation pay as set forth below; and

    

    WHEREAS, Condon and Merrimac agree
that it is in the best interests of both parties to enter into this
Agreement.

    

    NOW, THEREFORE, in consideration of
the premises and covenants set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Condon and Merrimac agree as follows:

    

    1A. In
consideration of Condon’s representations, acknowledgments, agreements and
obligations set forth in this Agreement, Merrimac agrees to make certain
payments (less applicable federal and state taxes and withholdings) and offer
certain benefits to Condon as follows:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    	 	1	)	
                                                            Vacation
      pay of forty-four (44) days commencing November 7, 2008, and payable on a
      weekly basis commencing November 13, 2008, until paid in
    full.

                                                          	 	$	31,313.92	 
	 	2	)	
                                                            After
      payment of all vacation pay in #1 above, salary continuation/severance pay
      of 33.33% of weekly base salary for twenty-six (26) weeks at the rate of
      $1,186.01 per week.

                                                          	 	$	30,836.26	 
	 	3	)	
                                                            After
      payment of all salary continuation/severance pay in #2 above, salary
      continuation/severance pay of 40% of weekly base salary for forty-three
      and 0.336 (43.336) weeks at the rate of $1,423.36 per
week.

                                                          	 	$	61,682.14	 
	 	4	)	
                                                            Merrimac
      to pay premiums for current healthcare benefits provided to Condon and his
      spouse under its existing plans (as may be amended) for a period of
      fifty-two (52) weeks. 

                                                          	 	$	12,331.08	 
	 	 	 	 
      	Value	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	
                                                          	

                                                            Total

                                                          	$	136,163.40	 

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    1B. All
salary continuation/severance payments under Par. 1A hereof shall be payable in
accordance with Merrimac's normal payroll practices.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2A. Notwithstanding the schedule of
salary continuation/severance payments set forth in Par 1A(2) and (3) above, in
the event Condon files a claim with Unum for short term disability benefits and
such claim has been denied and all pre-litigation appeal periods have expired,
or in the event Condon decides not to file any claim with Unum for short term
disability benefits, and upon Condon’s written notice to Merrimac of the
foregoing, Merrimac shall provide salary continuation/severance pay of
$92,518.40, payable at the rate of $2,312.96 per week for forty (40) weeks, in
lieu of the payments set forth in Par. 1A(2) and (3) above; provided, however,
such salary continuation/severance pay as set forth in this Par. 2A shall only
commence after the payment in full of all vacation pay set forth in Par. 1A(1)
above.  In the event any salary continuation/severance payments have
already been made to Condon, then the forty (40) weekly payments of salary
continuation/severance pay shall be equally and proportionately reduced to
account for such payments.  All salary continuation/severance payments
under Par. 2A shall be subject to applicable federal and state tax deductions
and withholdings.

    

    2B. Except for vacation pay, Condon
acknowledges that he is receiving the above described payments and benefits
under this Agreement that he would not otherwise be entitled to receive but for
the execution of this Agreement.  Condon further acknowledges and
agrees that no other wages, compensation, benefits, salary continuation or
severance pay, incentives, bonuses, commissions, vacation pay, monies, damages
or relief, of any kind or nature whatsoever, are due him.

    

    2C.
Condon understands and agrees that Merrimac shall not make any payments or
provide any benefits under this Agreement until seven (7) days after Merrimac
has received this document duly executed by Condon.  As used in this
Agreement, the term "days" shall mean calendar days.

    

    3. In
consideration of the payments and benefits to be provided under this Agreement,
Condon hereby releases and forever discharges Merrimac, its subsidiaries,
affiliates and related entities, and the present and former officers, directors,
employees, trustees, fiduciaries,  administrators, agents, attorneys,
successors and assigns of Merrimac and its subsidiaries, affiliates and related
entities (collectively, the “Releasees”), from and against any and all claims,
demands, causes of action, suits, judgments, liabilities, damages, losses, costs
and expenses, of any kind or nature whatsoever, disputed or undisputed, known or
unknown, in law or in equity, which Condon ever had, now has, or hereafter may
have against the Releasees up to the date of execution of this Agreement,
including but not limited to: (a) any and all claims arising out of Condon’s
employment with Merrimac or the termination thereof; (b) any and all claims
under Title VII of the Civil Rights Act of 1964, as amended, Civil Rights Act of
1866, as amended, Age Discrimination in Employment Act of 1967, as amended,
Older Workers Benefit Protection Act, as amended, New Jersey Law Against
Discrimination, as amended, Employee Retirement Income Security Act of 1974, as
amended, Americans With Disabilities Act of 1990, as amended, Family and Medical
Leave Act, as amended, New Jersey Family Leave Act, as amended, and New Jersey
Conscientious Employee Protection Act, as amended; (c) any and all claims
arising out of wrongful discharge, intentional or negligent infliction of
emotional distress, personal injury, pain and suffering, injury to reputation,
defamation, misrepresentation, any other negligent or intentional torts,
harassment or retaliation; (d) any and all claims arising out of oral or written
representations, agreements, promises or assurances, or  breach of any
express or implied contract; (e) any and all claims arising out of or under any
of Merrimac’s policies, plans, programs, procedures, handbooks or manuals; (f)
any and all claims arising out of or under any of Merrimac’s stock purchase,
stock option, severance, salary continuation or other incentive or compensation
policies, plans or programs; (g) any and all claims arising out of or under any
federal or state disability or handicap laws, or any and all claims against the
Releasees for short term or long term disability benefits; (h) any and all
claims arising out of or under any Merrimac sponsored life, health or other
insurance policies, plans or programs; (i) any and all claims arising out of or
under any  Merrimac benefit or leave of absence policies, plans or
programs, or any employee benefit booklets; (j) any and all claims for
compensatory or punitive damages or attorneys fees or costs; or (k) any and all
claims arising out of or under any federal, state or local constitution,
statute, regulation, rule or principle of common law.  Condon further
understands and acknowledges that he is not releasing any claims against the
Releasees that may arise after the date of execution of this Agreement. This
general release excludes any claim by Condon for accrued and vested rights under
the Merrimac sponsored 401(k) Plan, or any claim by Condon against Unum
insurance carrier for short term or long term disability benefits.  In
no event shall the Releasees be liable to Condon for any short term or long term
disability benefits, or in connection with Condon’s filing or processing any
claims for any disability benefits, or for any decisions, determinations, or
denials of coverage by the Unum insurance carrier.  Merrimac agrees to
complete any forms and provide any information reasonably required by Unum in
connection with any claim by Condon against Unum for short term or long term
disability benefits under the Unum Plan.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4. Condon
acknowledges and agrees that neither this Agreement nor the execution thereof
nor the payment of any monies or provision of any benefits hereunder shall
constitute an admission of any liability or violation of any law, rule or
regulation by Merrimac, as to which Merrimac expressly denies any such liability
or violation.

    

    5A.
Condon represents that as of the date of his execution of this Agreement, he has
not filed, instituted, submitted, asserted, initiated or participated in any
claim, complaint, action, suit, proceeding, charge, investigation or grievance
against any of the Releasees in any federal, state or local court, or
administrative, regulatory or investigative agency, or board, commission,
committee, legislative body or other forum.

    

    5B.
Condon agrees that he shall fully cooperate with Merrimac in connection with any
claim, complaint, action, suit, proceeding, charge, investigation or grievance
brought by or against any of the Releasees.

    

    5C.
Condon waives and releases any right to recover any monies, compensation,
benefits, damages, penalties or other relief of any kind or nature whatsoever in
any claim, complaint, action, suit, proceeding, charge, investigation or
grievance brought by Condon, any governmental agency, any Person or Entity (as
defined below) on Condon’s behalf, or which includes Condon in any class against
any of the Releasees.

    

    5D.
Condon hereby resigns as an officer of Merrimac and shall promptly execute and
submit a formal resignation as may be requested by Merrimac.

    

    6.
Notwithstanding anything contained in this Agreement to the contrary, nothing
set forth in this Agreement shall: (a) affect the rights of the Equal Employment
Opportunity Commission to enforce applicable age discrimination laws or conduct
any investigation or proceeding, or (b) interfere with the protected rights of
Condon under the Older Workers Benefit Protection Act.

    

    7A. As
used in this Agreement, the term “Person or Entity” shall mean any person, firm,
association, partnership, company, corporation, governmental agency or any other
form of entity (collectively, “Person or Entity”), and the term “Agreement”
shall mean, collectively, this Separation Agreement and General Release, the
terms, conditions and provisions thereof, and the payments and benefits provided
thereunder.

    

    7B.
Condon agrees to keep the Agreement, and the existence thereof, in strict
confidence, and shall not disclose, directly or indirectly, the Agreement or the
existence thereof to any Person or Entity; provided, however, Condon may
disclose the Agreement: (1) as permitted under Par. 6 hereof; (2) to Condon’s
attorney, accountant, financial advisor or spouse, provided Condon informs such
Person or Entity of the confidentiality obligations of this Par. 7 and requires
such Person or Entity to comply with such confidentiality obligations; (3) to
any governmental tax authority; or (4) as otherwise required by law or validly
issued subpoena or process.  Condon represents that he has not
disclosed the Agreement, or the existence thereof, to any Person or Entity
except as permitted by this Par. 7B.

    

    8A.
Condon represents and agrees that he has not, directly or indirectly, used,
copied or disclosed to any Person or Entity (except in connection with his
duties with Merrimac), and shall not, directly or indirectly, use, copy or
disclose to any Person or Entity, any confidential, proprietary or financial
information or trade secrets of Merrimac (the “Confidential Information” as
defined below).

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    8B. As
used in this Agreement, the term “Confidential Information” shall include
without limitation any of Merrimac’s: (a) Multi-Mix® or other technology,
innovations, inventions, discoveries, improvements, ideas, developments,
technical or engineering information, data, data bases, software, computer
programs, drawings, plans, specifications, designs, processes, production
processes, sketches, photographs, techniques, know-how, knowledge, protocols,
procedures, test procedures, formulas, patterns, methods of doing business,
manuals, logs, prototypes or samples; (b) processes of making multi-layer
integrated circuits, or processes of making multi-function modules, or processes
of fusion bonding; (c) all other intellectual property; (d) client or customer
names, lists or information; (e) vendor or supplier names, lists, information or
purchasing systems; (f) costs, pricing, or pricing plans, strategies or
policies, or any financial reports, financial information or accounting systems;
(g) the terms of any past or current loans, credit facilities or bank
transactions; (h) sales or marketing plans, policies or strategies or any other
sales or marketing information; (i) quality control plans, strategies, policies,
procedures, protocols, tests, test results, test data or any other quality
information; (j) manufacturing plans, strategies, policies, operations or any
other manufacturing information; (k) human resources organization, plans or
policies or any other human resources information; (l) business plans,
strategies or policies or any other business information; (m) telephone or email
lists or information; or (n) any form of computer, software, electronic or other
information, records, documentation, files, reports, or notes relating to any of
the foregoing.  This includes all written, oral, electronic, computer,
software, visual or any other form or media of Confidential Information
disclosed by or on behalf of Merrimac to Condon or which Condon has created,
developed, prepared or received during his employment with
Merrimac.  All Confidential Information is and shall be the sole and
exclusive property of Merrimac.  Notwithstanding the above, this
provision shall not preclude Condon from the use, copy or disclosure of
information which is in the public domain through no fault or breach of this
Agreement by Condon or from disclosure required by law or court
order.

    

    8C. In
the event a subpoena or other process is issued by any Person or Entity to
Condon to produce or disclose any Confidential Information or the Agreement, or
provide testimony relating to Merrimac, Condon shall provide notice to Merrimac
with a copy of the subpoena or process at least ten (10) days prior to the due
date, and Condon shall not make any disclosure or provide any testimony until
Merrimac has had a reasonable opportunity to contest such subpoena or
process.    Nothing contained in this Agreement shall affect
or impair any rights that Condon may have to indemnification for attorneys fees,
costs or expenses pursuant to applicable statutes, or under Merrimac’s Directors
and Officers Insurance Policy, Certificate of Incorporation or
Bylaws.

    

    9. Condon
represents and acknowledges that he has returned all property of Merrimac, and
all property prepared, created, developed, generated or received by Condon
relating to Merrimac during Condon’s employment with Merrimac, including all
copies or duplicates thereof.  Such property includes without
limitation any and all records, documentation, files, information, notes, plans,
policies, data, software, computers, computer user names and passwords,
voicemail codes, laptops, computer drives, computer disks, other intellectual
property, keys, identification cards, access cards, credit cards, Blackberry,
cell phones, supplies and equipment.  Condon further represents and
acknowledges that he has no custody, possession or control of any of the
foregoing property.

    

    10. To
induce Merrimac to enter into the Agreement and in consideration of the payments
and benefits provided by Merrimac to Condon under the Agreement, Condon agrees
that for a period of one (1) year after his execution of this
Agreement:

    

    A. He
shall not, directly or indirectly: (1) engage in any activity, business or
service on his own behalf, or provide services to, or enter the employ of, or
become an owner, partner, principal, shareholder, investor, lender or otherwise
in any Person or Entity, that in whole or in part is competitive with or adverse
to the best interests of Merrimac; (2) recruit, solicit, entice or initiate
contact with any former, current or future employees of Merrimac for the purpose
of offering employment to such employees with any other Person or Entity; or (3)
solicit, interfere with, or endeavor to entice away from Merrimac any of its
employees, customers, suppliers, consultants, or sales or field
representatives.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    B. He
shall not, directly or indirectly: (1) seek a position on the Board of Directors
of Merrimac; (2) solicit proxies for the election of a member of the Board of
Directors of Merrimac; (3) join with any other person to form a “group” for
purposes of participating in any registration under Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder, with respect to shares of capital stock of Merrimac.

    

    11A.
Except as otherwise provided in Par. 6 hereof, Condon agrees that he shall not,
directly or indirectly, file, institute, submit, assert, initiate or participate
in any claim, complaint, action, suit, proceeding, charge, investigation or
grievance against any of the Releasees in any federal, state or local court, or
administrative, regulatory or investigative agency, or board, commission,
committee, legislative body or other forum, based on any actions or omissions of
any of the Releasees arising on or prior to the date of Condon’s execution of
this Agreement.

    

    11B.
Except as otherwise provided in Par. 6 hereof, Condon agrees that he shall not,
directly or indirectly, solicit, advise, encourage, induce, assist or support
any Person or Entity to file, institute, submit, present, assert, initiate or
participate in any claim, complaint, action, suit, proceeding, charge,
investigation or grievance against any of the Releasees in any federal, state or
local court, or administrative, regulatory or investigative agency, or board,
commission, committee, legislative body or other forum, based on any actions or
omissions of any of the Releasees arising on or prior to the date of Condon’s
execution of this Agreement.

    

    12.
Condon agrees that he shall not, directly or indirectly, publish or otherwise
communicate in any manner whatsoever any comments, statements or other
information that could reasonably be interpreted as negative, critical,
derogatory, disparaging, harmful, injurious, discrediting, belittling or
defamatory to any of the Releasees, or to any of the Releasees’ products,
services, businesses, conduct of business, financial matters, securities,
reputations or shareholders.  As used in this Agreement, the term
“publish or otherwise communicate” shall include without limitation: (a) the
making of any oral, written, visual, computer, electronic, telephonic,
telegraphic or other communication of any comments, statements or information;
(b) the use of email communications or the Internet, including without
limitation the posting, presentation, communication or other transmittal of any
message, comment, statement or information on any Internet media, sites, message
boards, platforms, blogging sites, chat rooms, websites or otherwise, or (c) any
other form of public disclosure or communication of any comments, statements or
information.

    

    13A.
Condon acknowledges that a breach of any of his representations or agreements
under Par. 5, 7, 8, 9, 10, 11 or 12 of this Agreement will cause immediate and
irreparable injury to the Releasees for which a remedy at law or monetary
damages will be inadequate.  In the event of any such actual or
threatened breach by Condon, Condon acknowledges that the Releasees shall be
entitled to temporary, preliminary and/or permanent injunctive relief: (a)
restraining such breach; (b) requiring Condon to comply with his representations
or agreements under Par. 5, 7, 8, 9, 10, 11 or 12 of this Agreement; or (c)
granting an appropriate decree of specific performance.  Such
injunctive relief shall be granted without the necessity of: (d) showing actual
damages or that monetary damages would not afford an adequate remedy at law; or
(e) posting any bond or security.

    

    13B. In
the event Condon breaches any of his representations or agreements under Par. 5,
7, 8, 9, 10, 11 or 12 of this Agreement and any of the Releasees asserts a claim
or counterclaim or files suit against Condon due to such breach, then any of the
Releasees shall also be entitled to recover from Condon damages, reasonable
attorneys fees and costs of suit if any of the Releasees prevail in such suit or
with respect to such claim or counterclaim.  Further, in the event
Condon breaches any of his representations or agreements under Par. 5, 7, 8, 9,
10, 11 or 12 of this Agreement, Condon shall forfeit and Merrimac shall
immediately cease making or providing any further payments or benefits under
this Agreement, and Merrimac shall be entitled to recover all payments and
benefits that have been provided to Condon under this Agreement.  All
rights and remedies of the Releasees under this Agreement and at law or equity
shall be cumulative.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    14.
Condon waives any claim for re-employment with Merrimac and shall not apply for
re-employment for any position.

    

    15.
Condon represents and acknowledges that in executing this Agreement, he does not
rely and has not relied upon any representation, statement, promise, agreement
or assurance made by any of the Releasees, except as specifically set forth in
this Agreement.

    

    16.
Condon acknowledges that Merrimac has entered into this Agreement in reliance on
and will, subsequent to the execution of this Agreement, reasonably rely on each
and every representation and acknowledgment made by him in this
Agreement.  Condon affirms the truthfulness of each and every
representation and acknowledgment made herein.

    

    17. This
Agreement has been negotiated and executed within the State of New Jersey and
shall be governed, construed and interpreted in all respects in accordance with
the laws of the State of New Jersey without giving effect to any conflict of law
rules.  Except for injunctive relief sought by any of the Releasees,
any action to enforce, or which arises out of, or in any manner relates to, any
of the provisions of this Agreement shall be brought exclusively in the federal
or state courts of Essex County, New Jersey.  The parties hereto
expressly consent to the jurisdiction of such courts, and to service of process
by certified mail in accordance with the notice provisions of Par. 20 hereof, or
by any other manner provided by the laws or Rules of Court of the federal or
state courts of New Jersey.

    

    18A.
Condon
acknowledges that he has been given twenty-one (21) days from the date of
receipt of this Agreement to review and consider this
document.  Condon may waive his right to the full twenty-one
(21) day review period and execute and return this Agreement prior to the
expiration of such twenty-one (21) day period.  In the event Condon
fails to execute and return this Agreement to Merrimac within such twenty-one
(21) day review period, then this offer and Agreement shall be automatically
withdrawn without any further notice or action and become null and void in its
entirety. Condon and Merrimac also agree that any changes, whether material or
immaterial, to this Agreement shall not restart the running of such twenty-one
(21) day period.

    

    18B. In
the event Condon fails to execute and return this Agreement within such
twenty-one (21) day review period, Condon shall not be entitled to any salary
continuation/severance payments or benefits from Merrimac.

    

    18C.
Condon
understands and agrees that this Agreement shall not be effective or enforceable
for a period of seven (7) days following the date of Condon’s execution and
Merrimac’s receipt of this Agreement, and that Condon may revoke this Agreement
for any reason during this seven (7) day period by giving written notice of
revocation to Merrimac prior to the expiration of such seven (7) day
period.  In the event of such revocation, this Agreement shall become
null and void in its entirety.

    

    19. Condon is
advised to consult with an attorney of his choice at his own expense prior to
executing this Agreement.  Condon represents and acknowledges that he
has been given sufficient time and opportunity to do so, that he has been
represented by the firm of Bonny G. Rafel, LLC in this matter, and that he has
received legal advice concerning the terms, conditions and provisions of this
Agreement prior to the execution thereof.

    

    20. Any
notice required or permitted under this Agreement shall be in writing and
delivered personally or sent by certified mail, return receipt requested,
postage prepaid, addressed as follows:

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    If to
Condon:

    Mr. Robert V. Condon

    222 Stanhope Road

    Sparta,
New Jersey 07871

    

    

    If to
Merrimac:

    Merrimac Industries, Inc.

    41 Fairfield Place

    West Caldwell, New
Jersey 07006

    Attn:  Ms. Adriana
Mazza

    

    21.
Condon represents and acknowledges that he has read this Agreement, fully
understands all of the provisions hereof, voluntarily and knowingly agrees to
all such provisions, and executes this Agreement of his own free will without
any duress or coercion.  Condon further represents and acknowledges
that no other promise or assurance of any kind or nature whatsoever has been
made by any Person or Entity to cause him to execute this
Agreement.  The enforceability of this Agreement is expressly
contingent upon Condon’s furnishing an affidavit, in a form acceptable to
Merrimac, by his physician stating that Condon is competent to execute this
Agreement.

    

                22.
In the event any restriction or other provision of this Agreement is held by a
court of competent jurisdiction to be invalid, unenforceable or void for any
reason, but would be valid, effective and enforceable if such restriction or
provision, or part thereof, were revised or reduced in scope, then such
restriction or provision, or part thereof, shall apply with such appropriate
revision or reduction.  If such restriction or other provision of this
Agreement, or part thereof, cannot be so revised or reduced in scope, then such
restriction or other provision, or part thereof, shall be deemed deleted and the
remaining provisions of this Agreement shall continue in full force and
effect.

    

    23. This
Agreement sets forth the entire understanding between the parties hereto and
supersedes any and all prior agreements or understandings, written or oral,
between the parties hereto pertaining to the subject matter
hereof.  The parties acknowledge that there are no verbal
understandings or agreements contrary to or in addition to the terms, conditions
or provisions of this Agreement.  This Agreement shall not be
modified, altered or amended unless a writing is executed by both parties
hereto.  This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
legal representatives, successors and assigns.

    

    

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        7

        
          

        

      

      
        
        

      

    

    
 

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the dates set forth
below.

    

    

    CONDON HAS READ THIS SEPARATION
AGREEMENT AND

    GENERAL RELEASE, FULLY UNDERSTANDS IT,
VOLUNTARILY

    AND KNOWINGLY AGREES TO ITS TERMS, AND
SIGNS IT OF

    HIS OWN FREE WILL WITHOUT ANY COERCION
OR DURESS.

    

    

    

    
      
        
          
            	
                    /s/ Robert V. Condon

                  	
                    Date of Execution: 12/04/2008

                  
	
                    Robert V. Condon

                  	 
      

          

        

      

    

    

    

    State of
New Jersey)

    County of
Morris)  SS:

    

    I certify
that on this 4th day of Dec., 2008, Robert V. Condon personally came before me
and acknowledged under oath, to my satisfaction, that he is the person who
executed the within document and thereupon did acknowledge that he signed and
delivered the same as his voluntary act and deed for the uses and purposes
expressed therein.

    

    Signed
and sworn to before me on

    this 4th
day of Dec., 2008.

    

    /s/ Debra J.
Fetchik

    (Notary
Public)

    

    [Notarial
Seal]

    

    

    

    

    MERRIMAC INDUSTRIES,
INC.:

    

    

    
      
        	
                By:

              	
                /s/
      Mason N. Carter

              	 
	
                Name:

              	
                Mason
      N. Carter

              	 
	
                Title:

              	
                President
      & CEO

              	 

      

    

    

    Date of
Execution:  December 5, 2008

    

    

    
      
        
        

      

      
        8

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