SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 7
CompuDyne Corporation
(Name of Issuer)
Common Stock (Par Value $.75 Per Share)
(Title of Class of Securities)
20479530 6
(CUSIP Number)
Corcap, Inc.
90 State House Square
Hartford, Connecticut 06103-3720
(203) 247-7611
with a copy to:
Robert J. Metzler II, Esq.
Tyler Cooper & Alcorn
CityPlace - 35th Floor
Hartford, Connecticut 06103
(203) 725-6200
(Name, address and telephone number of person authorized
to receive notices and communications)
August 21, 1995
(Dates of events which require
filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this Schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement [ ].
CUSIP No. 20479530 6
____________________
_____________________________________________________________________________
(1) Name of Reporting Person and IRS Employer Identification Number:
Corcap, Inc. 06-1237135
_____________________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group:
(a) _____ (b) _____
_____________________________________________________________________________
(3) SEC USE ONLY:
_____________________________________________________________________________
(4) Source of Funds: (SC)
_____________________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(3): [ ]
_____________________________________________________________________________
(6) Citizenship or Place of Organization: Nevada
_____________________________________________________________________________
Number of Shares Beneficially Owned by Reporting Person With:
(7) Sole Voting Power: 670,881
_____________________________________________________________________________
(8) Shared Voting Power: 0
_____________________________________________________________________________
(9) Sole Dispositive Power: 670,881
_____________________________________________________________________________
(10) Shared Dispositive Power: 0
_____________________________________________________________________________
(11) Aggregate Amount Beneficially Owned By Reporting Person: 670,881
_____________________________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
_____________________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11):
18.8%
_____________________________________________________________________________
(14) Type of Reporting Person: CO
This Amendment No. 7 is filed to reflect certain material changes in
facts previously disclosed by Corcap, Inc. ("Corcap") and its wholly owned
subsidiaries Corcap Polymers, Inc., formerly known as Acadia Polymers, Inc.
("Polymers"), and Nacol, Incorporated ("Nacol") with respect to their
holdings of common stock, par value $0.75 per share (the "Common Stock") of
CompuDyne Corporation ("CompuDyne"). The reported changes result from (a)
the cumulative effect of various minor, immaterial transactions, (b) the
issuance to Martin A. Roenigk and Alan Markowitz on August 21, 1995 by
CompuDyne of (i) 1,260,460 shares of its Convertible Preference Stock, Series
D (the "Series D Preference Stock), convertible into 1,260,460 shares of
CompuDyne Common Stock, (ii) $400,000 principal amount of its Senior
Convertible Promissory Notes, convertible into 266,667 shares of CompuDyne
Common Stock, and (iii) options to acquire 200,000 shares of CompuDyne Common
Stock at an exercise price of $1.50 per share, and (c) the purchase by Corcap
on August 21, 1995 of 150,000 shares of CompuDyne Common Stock. The material
transaction occasioning the filing of this Amendment No. 7 is Corcap's
purchase of the 150,000 shares of CompuDyne Common Stock (hereinafter
sometimes referred to as the "Warrant Shares").
Because this Amendment No. 7 is the first amendment to the Schedule 13D
(originally filed by Lydall, Inc. in 1985) to be filed since CompuDyne became
an electronic filer pursuant to Regulation S-T, this Amendment No. 7 shall,
in compliance with Rule 13d-2(c), restate the entire text of the Schedule
13D, as amended previously by Amendment Nos. 1-6.
Item 1. Security and Issuer.
The class of securities to which this Statement relates is the common
stock, par value $0.75 per share (the "Common Stock"), of CompuDyne
Corporation, a Pennsylvania corporation, whose principal executive offices
are located at 90 State House Square, Hartford, Connecticut 06103-3720.
Item 2. Identity and Background.
(a) - (c) This Amendment No. 7 is being filed by:
(2) Corcap, a Nevada corporation, whose address and principal
business is located at 90 State House Square, Hartford, Connecticut 06103-
3720;
(2) Polymers, a Nevada corporation, whose address and principal
business is located at 90 State House Square, Hartford, Connecticut 06103-
3720; and
(3) Nacol, a Connecticut corporation, whose address and principal
business is located at 90 State house Square, Hartford, Connecticut 06103-
3720.
(d) and (e) Neither Corcap nor, to the best knowledge of Corcap, any
executive officer, director or controlling person of Corcap named in Exhibit
A has, during the last five years, been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors), or been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he or she was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On August 21, 1995, Corcap purchased the 150,000 Warrant Shares for $.40
per share in accordance with the terms of a Warrant issued by CompuDyne to
Corcap on March 10, 1993 and amended as of April 1, 1993, and August 15,
1995.
In payment of the purchase price for the Warrant Shares, Corcap executed
a promissory note for $60,000 payable to CompuDyne (the "Corcap Promissory
Note") a copy of which is attached as Exhibit B. The Corcap Promissory note
bears interest on the unpaid principal at the annual rate of eight percent
(8%). Payment of the unpaid principal of the Corcap Promissory Note and all
accrued and unpaid interest thereon is due on August 21, 2000.
Item 4. Purpose of Transaction.
Corcap exercised the right to acquire the Warrant Shares in connection
with and as a result of CompuDyne's issuance of (i) 1,260,460 shares of
Series D Preference Stock to Messrs. Roenigk and Markowitz, which shares are
convertible by the holders into 1,260,460 shares of CompuDyne Common Stock,
(ii) $400,000 principal amount of Senior Convertible Promissory Notes to
Messrs. Roenigk and Markowitz, which promissory notes are convertible by the
holders into 266,667 shares of CompuDyne Common Stock, and (iii) options to
purchase 200,000 shares of CompuDyne Common Stock to Mr. Roenigk at an
exercise price of $1.50 per share, all pursuant to a certain Stock Purchase
Agreement by and among CompuDyne, Messrs. Roenigk and Markowitz, and
MicroAssembly Systems, Inc. (the "Stock Purchase Agreement"). Corcap's
management believes that it is in Corcap's best interest that it acquire the
Warrant Shares so that it might maintain the maximum number of voting shares
with respect to CompuDyne as possible, without undertaking any additional
immediate, short term payment obligations, so as to minimize the dilutive
effect to it of the issuance by CompuDyne of the above common stock
equivalents to Messrs. Roenigk and Markowitz.
Mr. Roenigk, who is Chairman, President and Chief Executive Officer of
CompuDyne, is also a director of Corcap. Diane Burns, who is Secretary of
CompuDyne, is also President of Corcap. Elaine Chen, who is Treasurer and
Chief Financial Officer of CompuDyne, is also Treasurer and Chief Financial
Officer of Corcap. Millard H. Pryor, Jr. and David W. Clark, Jr., both of
whom are directors of CompuDyne, are also directors of Corcap.
Corcap has no present plans or proposals which relate to, or would
result in, an extraordinary corporate transaction, such as a merger,
reorganization or liquidation of CompuDyne, the sale or transfer of a
material amount of the assets of CompuDyne, any change in the present
management of CompuDyne, any material change in the present capitalization or
dividend policy of CompuDyne, any other material change in CompuDyne's
business or corporate structure, any changes in CompuDyne's charter or by-
laws which may impede the acquisition of control of CompuDyne by any person,
causing any class of securities of CompuDyne to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association, causing any class of equity securities of CompuDyne
becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended, or any action
similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As reported in Amendment No. 6, as of December 7, 1990, Corcap
had beneficial ownership of 695,547 shares of CompuDyne's Common Stock,
representing approximately 50.9% of the outstanding shares of CompuDyne
Common Stock at that time, which shares were held directly by Nacol, a
wholly-owned subsidiary of Polymers, which in turn was a wholly-owned
subsidiary of Corcap. On July 30, 1993, Nacol transferred to Corcap all of
the 695,547 shares of CompuDyne Common Stock held by Nacol.
Beginning in August 1993, Corcap began making regular sales of CompuDyne
Common Stock pursuant to Rule 144 on the following dates, in the following
amounts: 13,500 shares on August 19, 1993; 13,500 shares on November 24,
1993; 13,500 shares on March 3, 1994; 13,500 shares on June 13, 1994; 13,500
shares on September 12, 1994; 11,500 shares on January 20, 1995; 2,000 shares
on January 30, 1995; 13,500 shares on April 30, 1995; and 13,500 shares on
July 27, 1995. In addition, on October 6, 1993, Corcap conveyed 66,666
shares of CompuDyne Common Stock in the aggregate to Millard H. Pryor, Jr.
(16,667 shares), David W. Clark, Jr. (16,666 shares) and Antoine Dominic
(33,333 shares) in a private, negotiated transaction. The cumulative result
of the above transactions was to have reduced Corcap's beneficial ownership
of CompuDyne Common Stock to 520,881 shares immediately prior to its purchase
of the Warrant Shares. With the acquisition of the 150,000 Warrant Shares,
Corcap now holds 670,881 shares of CompuDyne Common Stock. Immediately prior
to the consummation of the Stock Purchase Agreement on August 21, 1995,
Corcap's 670,881 shares of CompuDyne Common Stock represented approximately
38.3% of CompuDyne's outstanding Common Stock.
The holders of the 1,260,460 shares of Series D Preference Stock issued
by CompuDyne to Messrs. Roenigk and Markowitz, which are convertible into
1,260,460 shares of CompuDyne Common Stock, are entitled, prior to such
conversion, to vote on a share for share basis with the Common Stock on all
corporate issues other than the election of directors and are entitled to
1/3.08 of a vote per share for the election of directors, as compared to the
Common Stock, which is entitled to one vote per share. Giving effect to the
issuance of the Series D Preference Stock, Corcap's 670,881 shares of
CompuDyne Common Stock represent approximately 22.3% of the voting power of
CompuDyne's issued and outstanding voting shares on all issues other than the
election of directors and 30.2% of the voting power of issued and outstanding
voting shares for the election of directors. Assuming the conversion of (i)
all of the Series D Preference Stock into 1,260,460 shares of Common Stock
and (ii) the entire $400,000 principal amount of Senior Convertible
Promissory Notes by Messrs. Roenigk and Markowitz into 226,667 shares of
CompuDyne Common Stock, and the exercise by Mr. Roenigk of his options to
purchase an additional 200,000 shares of CompuDyne Common Stock, Corcap's
current holdings of CompuDyne Common Stock would represent approximately
18.8% of CompuDyne's Common Stock on a fully-diluted basis.
(b) Corcap has the sole power to vote or direct the vote of, and
the sole power to dispose or direct the disposition of, the 670,881 shares of
CompuDyne Common Stock reported in this Statement.
(c) During the sixty (60) days preceding the date hereof other
than the acquisition of the Warrant Shares as disclosed in Items 3 and 4 of
this Statement, Corcap effected only one transaction in CompuDyne Common
Stock. On July 27, 1995 Corcap made a broker transaction sale of 13,500
shares of CompuDyne Common Stock pursuant to the provisions of Rule 144 on
the OTC market for a price of $1.50 per share.
(d) Corcap is aware of no other person having any right to receive
or the power to direct the receipt of dividends from, or the proceeds from
the sale of, the 670,881 shares of CompuDyne Common Stock beneficially owned
by Corcap.
(e) Polymers and Nacol both ceased to be beneficial owners of more
than five percent of CompuDyne's Common Stock on July 30, 1993.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In connection with the sale by Corcap Eastern, Inc., a wholly-owned
subsidiary of Corcap (hereinafter referred to as "Eastern"), of certain real
property (the "Lake Road Property") to Fabrilock, Inc., a Connecticut
corporation ("Fabrilock"), Corcap has entered into an agreement entitled 300
Lake Road Environmental Remediation Escrow Fund Agreement Dated July 14,
1995, by and among it, Eastern, Fabrilock and the firm of Courtney, Fink &
Forbes (the latter referred to as "Escrow Agent", the agreement referred to
hereinafter as the "Escrow Fund Agreement"), a copy of which is attached
hereto as Exhibit C. Prior to the sale of the Lake Road Property, Phase I
and Phase II environmental assessments of the Lake Road Property revealed the
existence of environmental contamination and an underground fuel storage tank
thereon, and the parties' representatives negotiated an approval by the
Connecticut Department of Environmental Protection of a remediation plan for
the cleanup of the Lake Road Property. In order to induce Fabrilock to close
the purchase of the Lake Road Property notwithstanding the existence of the
contamination and the underground fuel storage tank, Corcap and Eastern
agreed, in the Escrow Fund Agreement, to the establishment of an escrow fund
to be used to fund the environmental remediation and cleanup of the Lake Road
Property. Pursuant to the terms of the Escrow Fund Agreement, Corcap
deposited with the Escrow Agent 27,000 shares of CompuDyne Common Stock, but
retains all attendant rights of ownership of such shares other than the right
to transfer them during the pendency of the cleanup process. Beginning with
the end of the calendar quarter ending September 30, 1995, the Escrow Agent
will, ten days prior to the end of each calendar quarter, return to Corcap
4,000 shares of CompuDyne Common Stock for the purpose of Corcap selling such
shares pursuant to the provisions of Rule 144, and Corcap is required to
deposit into the escrow fund the proceeds of such sale. Corcap is obligated
to contribute additional shares of CompuDyne Common Stock to the escrow fund,
if necessary, so that the fair market of the CompuDyne Common Stock in the
escrow fund determined once every six months during the life of the escrow
fund, based upon the average bid and asked price of such stock for the six
months prior to the determination, is not less than 75% of: (i) $70,000, less
(ii) the cash proceeds deposited into the escrow fund by Corcap in return for
shares released by the Escrow Agent for sale by Corcap as described above
(the result of such calculation referred to as the "Stock Adjustment Value").
If the aggregate fair market value of the CompuDyne Common Stock in the
escrow fund, determined as set forth above, should, at any six month
valuation, exceed 125% of the Stock Adjustment Value, the Escrow Agent shall
return sufficient shares to Corcap such that the fair market value of the
CompuDyne Common Stock in the escrow fund shall equal the Stock Adjustment
Value. Upon certification that the environmental remediation and cleanup
have been completed, the Escrow Agent shall return to Corcap, among other
things, the shares of CompuDyne Common Stock in the escrow fund at that time.
Except as set forth above, Corcap has no contracts, arrangements,
understandings or relationships (legal or otherwise) with respect to any of
CompuDyne's securities which relate to such matters as transfer or voting of
any such securities, finder's fees, joint ventures, loan or option
agreements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies, and no such contract,
arrangement or understanding exists between Corcap and CompuDyne.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Name, Business Address, Present Principal Occupation, Address
of Employment, Citizenship of Each Executive Officer, Director
and Controlling Persons of Corcap, Inc.
Exhibit 2 Promissory Note of Corcap, Inc. dated August 21, 1995.
Exhibit 3 300 Lake Road Environmental Remediation Escrow Fund Agreement
Dated July 14, 1995 by and among Corcap, Inc., Fabrilock,
Inc., Corcap Eastern, Inc. and Courtney, Fink & Forbes.
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: August 30, 1995 CORCAP, INC.
By: /s/ Diane Burns
Diane Burns, President
CORCAP POLYMERS, INC.
By: /s/ Diane Burns
Diane Burns, Secretary
NACOL, INCORPORATED
By: /s/ Diane Burns
Diane Burns, Secretary
EXHIBIT 1
CORCAP, INC.
The name, business address or residence address, present principal
occupation or employment, and the name, principal business, and address of
the corporation or other organization in which such employment is conducted
and the citizenship of each of the executive officers, directors and
controlling persons of Corcap are as follows:
1. (a) John E. Sundman
(Chairman, Director)
(b) Business Address:
64 Homestead Road
P.O. Box 634
Oldwick, NJ 08858
(c) Present Principal Occupation:
Retired
64 Homestead Road
P.O. Box 634
Oldwick, NJ 08858
(d) Citizenship:
U.S.A.
2. (a) Diane W. Burns
(President)
(b) Business Address:
CompuDyne Corporation
90 State House Square
Hartford, CT 06103-3720
(c) Present Principal Occupation:
Corporate Secretary
CompuDyne Corporation
90 State House Square
Hartford, CT 06103-3720
(f) Citizenship:
U.S.A.
3. (a) Elaine Chen
(Chief Financial Officer and Treasurer)
(b) Business Address:
Quanta Systems Corporation
213 Perry Parkway
Gaithersburg, MD 20877
(c) Present Principal Occupation:
Chief Financial Officer & Treasurer
CompuDyne Corporation c/o
Quanta Systems Corporation
213 Perry Parkway
Gaithersburg, MD 20877
(f) Citizenship:
U.S.A.
4. (a) Martin A. Roenigk
(Director)
(b) Business Address:
MicroAssembly Systems, Inc./
CompuDyne Corporation
120 Union Street
Willimantic, CT 06226
(c) Present Principal Occupation:
Chairman and CEO
MicroAssembly Systems, Inc./
CompuDyne Corporation
120 Union Street
Willimantic, CT 06226
(f) Citizenship:
U.S.A.
5. (a) David W. Clark, Jr.
(Director)
(b) Business Address:
Pryor & Clark Company
90 State House Square
Hartford, CT 06103-3720
(c) Present Principal Occupation:
Managing Director
Pryor & Clark Company
90 State House Square
Hartford, CT 06103-3720
(f) Citizenship:
U.S.A.
6. (a) Millard H. Pryor, Jr.
(Director)
(b) Business Address:
Pryor & Clark Company
90 State House Square
Hartford, CT 06103-3720
(c) Present Principal Occupation:
Managing Director
Pryor & Clark Company
90 State House Square
Hartford, CT 06103-3720
(f) Citizenship:
U.S.A.
EXHIBIT 2
PROMISSORY NOTE
FOR VALUE RECEIVED the undersigned, Corcap, Inc. ("Corcap"), promises to
pay to the order of CompuDyne Corporation ("CompuDyne"), the principal sum of
Sixty-Thousand Dollars ($60,000) with annual interest at eight percent (8%) on
the unpaid balance. Principal and interest shall be paid in full on
August 21, 2000 (the "maturity date").
This Note may be prepaid without penalty. All payments shall be first
applied to earned interest and the balance to principal.
In the event of the insolvency or bankruptcy of Corcap, then the entire
unpaid principal, with all remaining unpaid interest, shall at the option of
CompuDyne, or any other holder hereof, become due and payable forthwith.
Failure to exercise this option shall not constitute a waiver of a right to
exercise the same in the event of any subsequent default.
The undersigned hereby waives all rights to presentment, demand, protest,
and all notices thereto in connection with any suit on this Note or any
extensions or renewals of the same or any deficiency thereon and agrees to pay
all reasonable attorneys' fees and costs of collection to the extent permitted
under law.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut.
Executed and delivered on August 21, 1995.
CORCAP, INC.
By /s/ Diane Burns
Diane Burns
Corporate Secretary
Accepted:
COMPUDYNE CORPORATION
By /s/ Diane Burns
Diane Burns
Corporate Secretary
EXHIBIT 3
300 LAKE ROAD ENVIRONMENTAL REMEDIATION ESCROW
FUND AGREEMENT DATED JULY 14, 1995
The parties agree for valuable consideration received to their full
satisfaction as follows:
1. The Parties.
1.1 Fabrilock, Inc. is a Connecticut corporation. It has an address of
P.O. Box 270109, West Hartford, CT 06127
1.2 Fabrilock, Inc. is referred to below as Fabrilock.
1.3 Corcap Eastern, Inc. is a Nevada corporation. It has an address of
90 State House Square, Hartford, CT 06103.
1.4 Corcap Eastern, Inc. is referred to below as Corcap.
1.5 Courtney, Fink & Forbes is a Connecticut Certified Public Accounting
Firm. It has an address of 533 Cottage Grove Road, Bloomfield,
Connecticut, 06002.
1.6 Courtney, Fink & Forbes is referred to below as Escrow Agent.
1.7 Corcap, Inc., is a Nevada corporation, with an address of 90 State
House Square, Hartford, Connecticut 06103 ("Corcap, Inc.")
1.8 Fabrilock, Corcap, Escrow Agent and Corcap, Inc. are collectively
referred to below as the Parties.
2. Reason for Fund.
2.1 Fabrilock is the purchaser and Corcap is the seller of 300 Lake
Road, Killingly, Connecticut.
2.2 Environmental Phase I and Phase II investigations of 300 Lake Road,
conducted by Haley & Aldrich, Inc. have revealed that 300 Lake Road
contains environmental contamination and an underground fuel storage
tank.
2.3 Haley & Aldrich, Inc. has negotiated with the Connecticut Department
of Environmental Protection ("DEP") a conceptual remediation plan
for a cleanup of the 300 Lake Road contamination which has been
approved by the DEP pursuant to a letter from Edward Parker,
Commissioner, dated October 18, 1994.
2.4 Corcap and Fabrilock wish to close the purchase of 300 Lake Road
notwithstanding the contamination and the presence of the
underground fuel storage tank.
2.5 Corcap and Fabrilock have agreed to establish an Environmental
Remediation Escrow Fund (the "Fund"), and Escrow Agent has agreed to
act as escrow agent for the Fund.
2.6 Corcap, Inc. owns 100% of the issued and outstanding stock of
Corcap. It is important to Corcap, Inc. that Corcap sell 300 Lake
Road, Killingly to Fabrilock and Corcap is entering into this
Agreement to induce Fabrilock to purchase 300 Lake Road.
3. Establishment of Remediation Escrow Fund.
3.1 By its signature below, Escrow Agent acknowledges:
a. receipt from Fabrilock of $25,000.00 by a check, subject to
collection;
b. receipt from Corcap, Inc. of 27,000 shares of common stock of
CompuDyne Corporation (the "Shares") which have a fair market
value of $70,000.00 based upon the average of the bid and asked
prices of CompuDyne common stock for the six months prior to
today's date.
c. receipt from Corcap of $5,000.00 by a check, subject to
collection.
3.2 The money in the Fund deposited pursuant to Section 3.1 hereof and
any other provision of this Agreement is called the "Money".
4. The Shares of Stock. Corcap, Inc. shall continue to own such Shares with
all attendant rights of ownership including, without limitation, voting
and dividend rights, but shall not be able to transfer or sell them
except in accordance with the terms of this Agreement. Commencing with
the quarter ended September 30, 1995 and ending the earlier of (a) the
release of all Shares in the Fund (and the redeposit of monies received
in exchange for the Shares back into the Fund) or (b) the issuance of a
certificate of completion by the DEP, or similar evidence of compliance
with DEP regulations (the "Certificate"), ten days prior to the end of
each calendar quarter, the Escrow Agent shall release to Corcap, Inc. in
trust four thousand (4,000) Shares. Corcap, Inc. shall sell such shares
pursuant to Rule 144 under the Securities Act of 1993, as amended ("Rule
144"), prior to the end of such quarter. Corcap, Inc. may aggregate such
Shares with other shares of CompuDyne common stock it may be selling
under Rule 144 for such quarter. Upon receipt of the proceeds of the
sale of such Shares, Corcap, Inc. shall promptly remit such proceeds to
the Escrow Agent who shall deposit such proceeds into the Fund. Corcap,
Inc. may, at its option, instruct the Escrow Agent to release additional
Shares to it in accordance with the preceding three sentences. In no
event shall Corcap or Corcap, Inc. be obligated to sell Shares in
violation of the Securities Act of 1993, as amended, or the rules and
regulations thereunder.
If any of such Share proceeds are expended pursuant to this agreement,
Fabrilock shall make Corcap, Inc. whole for any amounts so expended
within six (6) months of the issuance of the Certificate by paying
Corcap, Inc. cash in an amount equal to the aggregate sales price of
such Shares. The unused portion of Shares or cash equivalents shall be
released to Corcap, Inc. upon receipt of the Certificate.
5. Approved Investments.
5.1 Upon direction, Escrow Agent shall invest the Money as follows:
a. a savings or money market account in a bank having assets of at
least $50,000,000.00; or
b. in CD's or money market funds of a financial institution with
assets of at least $50,000,000.00; or
c. in securities backed by the full faith and credit of the United
States of America or the State of Connecticut.
5.2 All investments must be subject to withdrawal upon no greater than
thirty (30) days and such investments shall be staggered so that at
least one half shall be available to Escrow Agent upon no greater
than fifteen (15) days notice.
6. Release From Escrow; Termination of Escrow.
6.1 Escrow Agent shall release the Money or portions of the Money only
upon any one of the following:
(a) the amount drawn represents payments owed to Haley & Aldrich,
Inc. or a successor environmental remediation company (the
"Remediation Company") or the DEP for; (i) remediation work
performed at 300 Lake Road, (ii) underground storage tank
deactivation, or (iii) fees required to be paid to the DEP
arising from the foregoing clauses (i) and (ii) and for the
payment by Fabrilock of any fees relating to the Form III
Certificate submitted by Corcap Eastern, Inc. to the DEP
pursuant to Connecticut General Statutes Section 22a-134 to
22a-134(d), inclusive.
(b) a signed statement from the Remediation Company that 300 Lake
Road has been cleaned and/or the underground storage tank
deactivated in accordance with DEP requirements and all DEP
fees have been paid in connection therewith and as may be
required to be paid pursuant to this Agreement.
(c) Pursuant to Section 4 above.
Any Money released from the Fund pursuant to this Section 6.1 shall be
paid by the Escrow Agent which shall make the payment required.
6.2 Escrow Agent shall release portions of the Money pursuant to Section
6.1(a) and (b) only after receipt of a signed statement from
Fabrilock that the work performed by the Remediation Company has
been performed, along with a copy of the billing statement from the
Remediation Company, or that the fees required to be paid to the DEP
pursuant to this Agreement have been paid accompanied by satisfactory
evidence of payment.
6.3 Escrow Agent shall in no event be required to resolve any
controversy concerning the Fund or take any action concerning any
such controversy.
6.4 When the conditions set forth in Section 6.1(b) are met, the Escrow
Agent shall (i) return all Shares and cash equivalents for such
Shares that may be included with the Money to Corcap and (ii) pay
all other Money, excluding interest on such Money, to Fabrilock.
Interest shall be paid to Corcap and Fabrilock in the same
proportion as the amount of Money contributed by each of them.
Upon the release of all Shares and the payment of all Money
pursuant to the foregoing, the Fund shall terminate. This
Agreement shall terminate upon the satisfaction of each party's
respective obligations under this Agreement.
7. Insufficient Money. If the Money in the Fund is not adequate to enable
Escrow Agent to make payments, Escrow Agent shall sell enough Stock to
allow for the payment but only in accordance with Section 4 hereof
including the limitations set forth therein.
8. Interest. Escrow Agent shall remit all interest and/or dividends
accruing on the Money to the Fund when received by the Escrow Agent.
9. Dividends. Escrow Agent shall remit all dividends and distributions
accruing or the Stock to Corcap within five (5) days of receipt. Corcap
shall retain all rights of ownership including, without limitation,
voting and dividend rights, but shall not be able to transfer or sell
them except in accordance with the terms of this Agreement.
10. Additional Deposits.
10.1 Every month, during the term of this Agreement, by the tenth (10th)
day of each month, Fabrilock shall make a $2,500.00 deposit to
Escrow Agent for the Fund to become a portion of the Money.
10.2 Every six months, Escrow Agent shall determine the fair market value
of the Stock based upon the average of the bid and asked prices of
CompuDyne common stock for the six months prior to the date of
determination. If the aggregate fair market value of the shares
remaining in the Fund at such determination date is less than 75% of:
(i) $70,000.00 less (ii) the amount of the cash proceeds delivered
to the Escrow Agent pursuant to Paragraph 4, hereof, (the sum of
(i) and (ii) is referred to hereinafter as the "Stock Adjustment
Value") the Escrow Agent shall so inform Corcap which shall,
within fifteen (15) days place additional stock with Escrow Agent
so that the fair market value of the shares of stock in the Fund
equals the Stock Adjustment Value. If the aggregate fair market
value has increased to 125% or more of the Stock Adjustment Value,
Escrow Agent shall, within (15) days, return Stock to Corcap so
that the aggregate fair market value of the shares of Stock in the
Fund equals the Stock Adjustment Value.
11. Concerning the Escrow Agent.
11.1 Fees and Expenses. Escrow Agent shall not be entitled to any
compensation or reimbursement for any expenses, disbursements or
advances in connection with the performance of its duties hereunder
except as expressly provided herein.
11.2 Resignation and Removal. Escrow Agent may resign and be discharged
from its duties hereunder at any time by giving notice of such
resignation to the other parties hereto specifying a date (not less
than thirty (30) days after the giving of such notice) when such
resignation shall take effect. Promptly after such notice, a
successor shall be appointed by mutual agreement of the other
parties, such successor to become the Escrow Agent hereunder upon
the resignation date specified in such notice. If the other
parties are unable to agree upon a successor Escrow Agent within
thirty (30) days after such notice, Escrow Agent shall be entitled
to appoint its successor. Escrow Agent shall continue to serve as
Escrow Agent until its successor accepts the Fund. The other
parties hereto may agree at any time to substitute a successor
Escrow Agent by giving notice thereof to the Escrow Agent then
acting.
11.3 Performance. Escrow Agent shall undertake to perform such duties as
are specifically set forth herein. It shall not be liable for any
mistake of fact or error of judgment made in good faith or for any
acts or omissions by it of any kind other than its willful
misconduct or gross negligence. It shall be entitled to rely,
and shall be protected in doing so, upon (i) any written notice,
instrument or signature believed by it to be genuine and to have
been signed or presented by the proper party or parties duly
authorized to do so, and (ii) the advice of counsel (which may be
of the Escrow Agent's own choosing). The Escrow Agent shall have
no responsibility for the contents of any writing submitted to it
hereunder and shall be entitled in good faith to rely without any
liability upon the contents thereof.
11.4 Indemnification. Corcap and Fabrilock agree to indemnify the Escrow
Agent and hold it harmless against any and all liabilities incurred
by it hereunder, except for liabilities incurred by the Escrow Agent
resulting from its own willful misconduct or gross negligence.
11.5 Interpleader. If at any time prior to the termination of this
Agreement, conflicting demands are made upon the Escrow Agent for
the Money or any other assets in the Fund, the Escrow Agent shall
be authorized to bring an interpleader action in any court of
competent jurisdiction. If a suit is commenced against the Escrow
Agent, it may answer by way of interpleader and name the other
parties hereto (or any of them) as additional parties to such
action, and the Escrow Agent may tender the Money or any other
assets in the Fund into such court for determination of the
respective rights, titles and interests of the other parties
therein. If and when the Escrow Agent shall so interplead such
parties, or any of them, and deliver the Money or any other assets
in the Fund to the Clerk of such court, all of its duties
hereunder shall cease, and it shall have no further
obligation concerning the Money or any other assets in the Fund.
Upon tender of the Money or any other assets in the Fund to the
clerk of such court, the Escrow Agent shall be entitled to receive
from the other parties its reasonable attorney's fees and expenses
incurred in connection with the interpleader action. As between
the other parties, such fees, expenses and other sums shall be
paid by the party which does not prevail in the proceedings
brought to determine the appropriate release of the Money or any
other assets in the Fund. Nothing herein shall prejudice any
other right or remedy of the Escrow Agent.
11.6 Discharge by Delivery. After the Escrow Agent has delivered the
Money or any other assets in the Fund pursuant to the terms of this
Agreement the Escrow Agent shall have discharged all of its
obligations hereunder, and none of the other parties hereto shall
thereafter have any claim against the Escrow Agent on account of
this Agreement.
12. Miscellaneous.
12.1 Binding Effect. This Agreement will be binding upon, inure to the
benefit of, and be enforceable by the respective successors and
assigns of the parties hereto.
12.2 Entire Agreement; Amendments. This Agreement, as read in
conjunction with the Lease, contains the entire understanding of
the parties with respect to the subject matter hereof, and may be
amended only by an instrument duly executed by all the parties
hereto.
12.3 Notices. All notices given under any of the provisions of this
Agreement shall be deemed to have been duly given when made in
writing and either delivered personally to the party to whom notice
is to be given or on the date mailed by certified mail, return
receipt requested, postage prepaid, or sent by nationally recognized
delivery service, charges prepaid, addressed as follows:
(a) If to Corcap:
Corcap Eastern, Inc.
90 State House Square
Hartford, CT 06103
(b) If to Fabrilock:
Fabrilock, Inc.
300 Lake Road
Killingly, CT 06239
(c) If to Escrow Agent:
Courtney, Fink & Forbes
533 Cottage Grove Road
Bloomfield, CT 06002
Attn: Russell Fink
or to such other address as each party shall specify by written notice to
the other parties hereto. Any notice served upon the Escrow Agent shall
also be sent to all the other parties.
12.4 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with the laws of the State of
Connecticut, without regard to the choice of law rules utilized in
that jurisdiction.
12.5 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same instrument.
12.6 Continuing Effect. This Agreement shall remain in full force and
effect until the Escrow Agent has delivered the Funds held by it
hereunder in accordance with the terms hereof.
12.7 Headings. Section and Paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning
or interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this instrument
this 14th day of June, 1995.
WITNESS: FABRILOCK, INC.
/s/ Michael S. Stiebel By: /s/ James M. Godbout
Its President
_____________________________
WITNESS: CORCAP EASTERN, INC.
/s/ Anju Gupta By: /s/ Norman Silberdick
Its
_____________________________
WITNESS: CORCAP, INC. (100% owner of
Corcap Eastern, Inc. and holder of the
Shares)
/s/ Anju Gupta By: /s/ Norman Silberdick
Norman Silberdick
Its President
_____________________________
WITNESS: COURTNEY, FINK & FORBES
/s/ Michael S. Stiebel By: /s/ Russell Fink
Russell Fink
Its
_____________________________
