SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 9
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:
Kathleen A. Maher, Esq.
Tyler Cooper & Alcorn
205 Church Street
P.O. Box 1936
New Haven, CT 06509-1910
(203) 784-8234
_______________________________________________________
(Name, address and telephone number of person authorized
to receive notices and communications)
March 25, 1996
(Dates of events which require
filing of this Statement)
If the filing person has previously filed a statement on Schedule
13D 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; I.R.S. Id. Nos.:
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: (OO)
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e): [ ]
(6) Citizenship or Place of Organization: Nevada
Number of Shares Beneficially Owned by Reporting Person With:
(7) Sole Voting Power: 308,881
(8) Shared Voting Power: 0
(9) Sole Dispositive Power: 308,881
(10) Shared Dispositive Power: 0
(11) Aggregate Amount Beneficially Owned By Reporting Person: 308,881
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares: [ ]
(13) Percent of Class Represented by Amount in Row (11):
17.1% Based on Issued and Outstanding
(14) Type of Reporting Person: CO
ITEM 1. SECURITY AND ISSUER.
The class of securities to which this Schedule 13D relates is the
common stock, par value $0.75 per share ("Common Stock"), of CompuDyne
Corporation ("CompuDyne"), a Pennsylvania corporation. The address of
CompuDyne's principal executive offices is 120 Union Street, Willimantic,
Connecticut 06206.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) This Amendment is filed by Corcap, Inc., a Nevada
corporation ("Corcap"), whose address and principal place of business is
located at 120 Union Street, Willimantic, Connecticut 06206.
(d) and (e) Neither Corcap nor, to the best knowledge of Corcap,
any executive officer, director or controlling person of Corcap has,
during the last five years, been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors), or has 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.
Corcap is reporting the disposition of 120,000 shares of CompuDyne
Common Stock. Corcap is not reporting the purchase of any securities.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction is to settle certain claims. On
March 25, 1996, Corcap, Inc. entered into a Settlement Agreement, dated
as of March 25, 1996 (the "Settlement Agreement"), with Lydall, Inc.
("Lydall") pursuant to which Corcap transferred 120,000 shares (the
"Transferred Shares") of CompuDyne Common Stock to Lydall in settlement
of certain claims.
Pursuant to a Post-Distribution Agreement, dated as of July 1, 1988,
which Corcap and Lydall had entered into as part of the spin-off of
Corcap's predecessor, Acadia Polymers, from Lydall in 1988, certain
obligations and liabilities between Lydall and Corcap were allocated.
Lydall and Corcap had been in dispute over certain of their obligations
and liabilities under the Post-Distribution Agreement. Lydall claimed
that Corcap owed it $881,365 under the Post-Distribution Agreement as a
result of settlements Lydall had reached with the Internal Revenue
Service for each of the tax years from 1983 through 1989. Separately,
Lydall acknowledged owing Corcap $60,279 under the Post-Distribution
Agreement as a result of certain retrospective insurance adjustments made
through 1995.
Under the Settlement Agreement, each of Lydall and Corcap released
all obligations arising out of such claims by the transfer from Corcap to
Lydall of 120,000 shares of CompuDyne Common Stock. In addition, Corcap
agreed to indemnify Lydall for all liabilities Lydall may incur in
connection with its former ownership of property in Dayville, Connecticut
which Corcap sold in August 1995 and which had previously been used in
connection with Acadia's operations. The Post-Distribution Agreement had
obligated Corcap to indemnify Lydall for certain environmental claims.
In all other respects, the Post-Distribution Agreement continues in
effect.
As part of the Settlement Agreement, Lydall required as a condition
to signing, that CompuDyne enter into a registration rights agreement
with Lydall obligating CompuDyne to register the Transferred Shares upon
demand of Lydall two years following the date of the Agreement or in a
"piggyback registration" at any time upon the proposed registration by
CompuDyne of its stock. In order to induce CompuDyne to enter into such
agreement, Corcap agreed to issue an option (the "Option") to CompuDyne
to purchase 16,666 shares of CompuDyne Common Stock at an exercise price
of $.01 per share exercisable immediately for a period of five years
under a Stock Option Agreement, dated as of March 25, 1996, between
Corcap and CompuDyne (the "Option Agreement"). Until recently, Corcap
had included the accounts of CompuDyne in Corcap's consolidated financial
statements in light of the significant ownership interest Corcap had in
CompuDyne stock and interlocking directors and officers. Due to the
declining ownership interest Corcap has in CompuDyne Common Stock and a
diminished overlapping of directors and officers, the financial
statements of Corcap and CompuDyne are no longer consolidated.
Currently, three of the four Corcap directors also serve on the CompuDyne
Board of Directors.
In addition, on February 15, 1996, Corcap sold 18,000 shares of
CompuDyne Common Stock pursuant to Rule 144 under the Securities Act of
1933, as amended, at a sales price of $1.375 per share.
Prior to Corcap entering into the Settlement Agreement and Option
Agreement and selling shares pursuant to Rule 144, Corcap owned 446,881
shares of CompuDyne Common Stock, or 25.5% of the issued and outstanding
shares. As a result of the transfer of 120,000 shares of CompuDyne
Common Stock to Lydall and the sale of 18,000 shares pursuant to Rule
144, Corcap owns 308,881 shares of CompuDyne Common Stock, or 17.1% of
the issued and outstanding shares, and upon exercise of the Option,
Corcap will own 292,215 shares of CompuDyne Common Stock, or 16.3% of the
issued and outstanding shares.
On March 25, 1996, the high and low bids per share for CompuDyne
Common Stock as quoted on the OTC bulletin Board were $1.375 and $1.375.
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. Corcap may sell its remaining holdings over time
under applicable rules of the Securities Act of 1933, as amended.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Corcap now has beneficial ownership of 308,881 of CompuDyne's
Common Stock which is approximately 17.1% of CompuDyne's issued and
outstanding stock as of March 25, 1996.
(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 308,881
shares of CompuDyne Common Stock reported in this Amendment.
(c) See Item 4 above.
(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 308,881 shares of CompuDyne Common Stock
beneficially owned by Corcap.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except as described in prior amendments to this Schedule 13D, Corcap
has no contracts, arrangements, understandings or relationships
concerning the CompuDyne Common Stock 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, understanding or relationship exists between
Corcap and CompuDyne.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1(a) Settlement Agreement, dated as of March 25, 1996,
between Corcap and Lydall.
1(b) Stock Option Agreement, dated as of March 25, 1996,
between Corcap and CompuDyne.
SIGNATURES
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.
Date: April 4, 1996
CORCAP, INC.
/s/ Diane Burns, President
By____________________________
Diane Burns, President
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (this "Agreement") is entered into as of
this 25th day of March, 1996 between Lydall, Inc., a Delaware corporation
("Lydall"), and Corcap, Inc., a Nevada corporation ("Corcap").
WHEREAS, Lydall and Corcap entered into a certain Post-Distribution
Agreement dated as of July 1, 1988, which was thereafter amended by
Amendments Nos. 1, 2 and 3 thereto (herein, as so amended, called the
"Post-Distribution Agreement"); and
WHEREAS, the Post-Distribution Agreement provides for the allocation
of certain obligations and liabilities between Lydall and Corcap; and
WHEREAS, Lydall and Corcap have been in dispute over certain of
their obligations and liabilities under the Post-Distribution Agreement;
and
WHEREAS, in order to resolve those disputes without further
controversy Lydall is prepared to relinquish its net claim against Corcap
exceeding $800,000 in exchange for the prompt receipt from Corcap of the
shares of CompuDyne Corporation Common Stock described below; and
WHEREAS, Lydall and Corcap wish to clarify certain provisions of the
Post-Distribution Agreement relating to Corcap's indemnification of
Lydall against environmental claims;
NOW, THEREFORE, in consideration of the premises and the mutual
promises set forth below, the parties agree as follows:
1. DISPUTES SETTLED. Lydall has entered into two separate
settlement agreements with the Internal Revenue Service which have
settled federal tax issues, one for tax years 1983, 1984, 1985 and 1986,
and one for tax years 1987, 1988 and 1989 (such settlement agreements are
herein called the "IRS Settlements"). As a result of the IRS
Settlements, Lydall claims that Corcap owes it $881,365 under the Post-
Distribution Agreement. Separately, as a result of certain retrospective
insurance adjustments made through December 31, 1995 (herein called the
"Insurance Adjustments"), Lydall acknowledges owing Corcap $60,279 under
the Post-Distribution Agreement, although Lydall believes that that
amount would be substantially reduced in the near future by further
credits. Lydall and Corcap hereby agree that all obligations of Corcap
to Lydall under the Post-Distribution Agreement arising out of the IRS
Settlements and all obligations of Lydall to Corcap under the Post-
Distribution Agreement arising out of the Insurance Adjustments shall be
settled and released by this Settlement Agreement.
2. SETTLEMENT OF CERTAIN CORCAP OBLIGATIONS. In settlement and
release of all obligations of Corcap to Lydall under the Post-
Distribution Agreement arising out of the IRS Settlements, Corcap and
Lydall agree that simultaneously with the execution of this Agreement:
(a) Corcap shall transfer to Lydall 120,000 restricted
shares of CompuDyne Corporation Common Stock, par value $.75 per share,
(the "Restricted Shares") now owned by and registered in the name of
Corcap. The date of such transfer is referred to herein as the "Transfer
Date".
(b) Lydall shall execute and deliver to Corcap an
Investment Purpose Agreement in the form of Exhibit A attached hereto,
evidencing Lydall's intent to acquire and hold the Restricted Shares for
investment in compliance with applicable securities laws and regulations.
(c) Corcap shall deliver to Lydall a written commitment
by CompuDyne Corporation ("CompuDyne") in the form of Exhibit B attached
hereto providing that CompuDyne shall, upon request by Lydall (i) after
expiration of two years from the Transfer Date or (ii) after receipt by
Lydall of written notice by CompuDyne to Lydall that CompuDyne proposes
to register any other shares of CompuDyne Corporation Common Stock (or
securities convertible into or exchangeable or exercisable for CompuDyne
Corporation Common Stock), undertake and complete all such registration
of the Restricted Shares (or any of them) under applicable securities
laws and regulations as may be necessary or appropriate to permit the
sale by Lydall at the time in question of the Restricted Shares (or any
of them) in the public market in compliance with applicable securities
laws and regulations.
3. SETTLEMENT OF CERTAIN LYDALL OBLIGATIONS. Corcap and Lydall
agree that all obligations of Lydall to Corcap arising out of the
Insurance Adjustments are settled and released in consideration of
Lydall's receipt of the Restricted Shares and its acceptance of the other
settlement provisions of Section 2 above.
4. INDEMNIFICATION OF DAYVILLE ENVIRONMENTAL CLAIMS. Corcap
acknowledges that under the Post-Distribution Agreement Corcap has
obligations to indemnify Lydall for certain environmental conditions. By
way of clarifying the Post-Distribution Agreement, and not in
substitution or repeal of any provision thereof, Corcap agrees that
Corcap shall indemnify Lydall for all payments, obligations, liabilities,
charges, fees, response and remediation costs and expenses paid, suffered
or incurred by Lydall, regardless of to whom owed or paid, including
reasonable attorneys fees, resulting from, caused by or arising out of:
(i) The presence of any Polluting Substance (as defined below)
in or upon the property now or formerly owned by Corcap in Dayville,
Connecticut and more particularly described in Exhibit C attached hereto
(the "Dayville Property";
(ii) The presence in or upon any other property of any
Polluting Substance which was at any time in or upon the Dayville
Property; or
(iii) Any failure by Corcap, Lydall or any other person to
comply with the terms of (x) any federal, state or municipal statute,
regulation or ordinance governing the management, control or remediation
of any Polluting Substance which was at any time in or upon the Dayville
Property, or (y) any lawful order, consent agreement or other action of
the Connecticut Department of Environmental Protection or any other
federal, state or municipal government authority under any federal, state
or municipal statute, regulation or ordinance governing the management,
control or remediation of any Polluting Substance which was at any time
in or upon the Dayville Property.
As used herein, the term "Polluting Substance" shall include
"hazardous waste" as defined in Section 1004(5) of the federal Resource,
Conservation and Recovery Act of 1976, as amended ("RCRA"), 42 U.S.C.
6903(5), and the regulations adopted thereunder; "hazardous constituents"
as listed within Appendix VIII of 40 C.F.R. Part 261; "hazardous
substances" as defined in Section 101(14) of the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), 42 U.S.C. Section 9601(14); and "oil or petroleum",
"chemical liquids", and "solid, liquid or gaseous products" as those
terms are defined in Section 22a-448 of the Connecticut General Statutes.
5. POST-DISTRIBUTION AGREEMENT CONTINUES. Except for the
settlement and release of those specific obligations described in Section
1 hereof and except for those specific provisions of the Post-
Distribution Agreement which by their terms are no longer applicable, all
obligations and liabilities of the parties to each other under, and all
terms and provisions of, the Post-Distribution Agreement, as amended to
this date, shall continue in full force and effect after the execution of
this Agreement.
6. CONTINGENT REINSTATEMENT OF DEBTS. In the event that the
consideration provided to Lydall under this Agreement is avoided in any
Corcap bankruptcy proceeding, Lydall and Corcap agree that (i) Corcap's
debt to Lydall in respect of the IRS Settlements shall be reinstated and
(ii) Lydall's debt to Corcap in respect of the Insurance Adjustments
shall be reinstated. The parties further agree that in the event of such
reinstatement (i) Corcap's debt to Lydall in respect of the IRS
Settlements is $881,365 and Lydall's debt to Corcap in respect of the
Insurance Adjustments is not more than $60,279 and (ii) their respective
debts as a result of the IRS Settlements and the Insurance Adjustments
arise from the same contract and Lydall may partially recoup the amount
Corcap owes Lydall from the amount Lydall owes Corcap.
7. NOTICES. All notices or other communications hereunder shall
be in writing, shall be delivered by Federal Express or other nationally
recognized overnight delivery service for next business day delivery, all
charges prepaid, shall be effective on the next business day following
deposit with such delivery service, and shall be addressed as follows:
If to Lydall:
Lydall, Inc.
One Colonial Road
Manchester, CT 06045
Attention: Vice President-Finance
If to Corcap:
Corcap, Inc.
120 Union Street
Willimantic, Connecticut 06226
Attention: President
or to such other address as either party shall have specified for itself
by written notice sent as herein provided to the other party.
8. BENEFIT, GOVERNING LAW. This Agreement shall be binding upon
and shall inure to the benefit of Lydall and Corcap and their respective
successors and assigns. This Agreement may not be assigned by either
party without the prior written consent of the other party. This
Agreement shall be governed by the laws of the State of Connecticut.
IN WITNESS WHEREOF, Lydall and Corcap have caused this Agreement to
be executed as of the date first set forth above.
ATTEST: LYDALL, INC.
/s/ Mary Adamowicz By: /s/ John E. Hanley
_____________________________ _____________________________
Secretary/Assistant Secretary John E. Hanley
Vice President-Finance and
Treasurer
Duly Authorized
ATTEST: CORCAP, INC.
/s/ Patricia A. Zielinski By: /s/ Diane W. Burns
_____________________________ _____________________________
Secretary/Assistant Secretary Diane W. Burns
President
Duly Authorized
STATE OF CONNECTICUT )
) ss. March 19, 1996
COUNTY OF HARTFORD )
Personally appeared JOHN E. HANLEY, Vice President-Finance and
Treasurer of Lydall, Inc., as aforesaid, signer of the foregoing
instrument, and acknowledged the same to be his free act and deed as such
officer and the free act and deed of said corporation, before me.
/s/ Maureen Ogrean
__________________________________
Notary Public
My Commission Expires:
April 30, 1988
STATE OF CONNECTICUT )
) ss. 25 March, 1996
COUNTY OF WINDHAM )
Personally appeared DIANE W. BURNS, President of Corcap, Inc., as
aforesaid, signer of the foregoing instrument, and acknowledged the same
to be her free act and deed as such officer and the free act and deed of
said corporation, before me.
/s/ Sarah J. Schenk
__________________________________
Notary Public
My Commission Expires:
March 31, 2000
EXHIBIT A TO SETTLEMENT AGREEMENT
FORM OF INVESTMENT PURPOSE AGREEMENT
THIS INVESTMENT PURPOSE AGREEMENT is made and entered into this 25th
day of March, 1996, by Lydall, Inc., a Delaware corporation ("Lydall"),
for the benefit of Corcap, Inc., a Nevada corporation ("Corcap").
WHEREAS, Lydall and Corcap have entered into a Settlement Agreement
dated this date; and
WHEREAS, Corcap is the owner of certain shares of capital stock of
CompuDyne Corporation, a Pennsylvania corporation ("CompuDyne"); and
WHEREAS, the Settlement Agreement provides for the transfer of
120,000 restricted shares of CompuDyne Corporation Common Stock, par
value $.75 per share, (the "Shares") by Corcap to Lydall; and
WHEREAS, the Settlement Agreement provides for the delivery of an
Investment Purpose Agreement by Lydall to Corcap;
NOW, THEREFORE, Lydall agrees as follows:
1. Lydall is an "accredited investor" as defined in Rule 501
under the Securities Act of 1933, as amended (the "Act").
2. Lydall is receiving the Shares for Lydall's own account,
with the intention of holding the Shares for investment purposes only,
with no present intention of dividing or allowing others to participate
in this investment or of reselling, transferring, disposing or otherwise
participating, directly or indirectly, in a distribution of the Shares,
and Lydall shall not make any sale, transfer, disposition or other
distribution of the Shares without registration under the Act or under
such other similar laws regarding the registration, sale, disposition or
distribution of securities of any other jurisdiction where required to
make such sale, transfer, disposition or distribution lawful (all such
other similar laws and the Act being herein collectively referred to as
the "Securities Laws"), or unless an exemption from registration is
available under the Securities Laws as described in an opinion from
Lydall's counsel, Murtha, Cullina, Richter and Pinney.
3. Lydall has received and reviewed CompuDyne's Annual Report on
Form 10-K for the year ended December 31, 1994 and all documents
subsequently filed with the Securities and Exchange Commission by
CompuDyne under the Securities Exchange Act of 1934, as amended, since
such date. Lydall has been given an opportunity to ask questions of
officers of CompuDyne regarding such documents which questions have been
answered to Lydall's satisfaction. Lydall has such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment in the Shares and is
able to bear the economic risks of such investment.
4. Lydall understands and agrees that stop transfer instruc-
tions will be given to CompuDyne's transfer agent or the officer in
charge of its stock records and noted on the appropriate records of
CompuDyne to the effect that the Shares may not be transferred out of
Lydall's name unless the Shares so transferred have been registered or an
exemption from such registration is available as provided for in Section
2 above. Lydall further agrees that there will be placed on the
certificates for the Shares, or any substitutions therefor, a legend
stating in substance as follows, and Lydall understands and agrees that
CompuDyne may refuse to permit the transfer of the Shares out of Lydall's
name and that the Shares must be held indefinitely in the absence of
compliance with the terms of such legend:
"The shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any other jurisdiction and may not be transferred, nor
will any assignee or endorsee hereof be recognized as an owner hereof by
CompuDyne Corporation for any purpose, unless a registration statement
under the Securities Act of 1933, as amended, and under the securities
laws of such other jurisdictions as may be necessary, with respect to
such shares shall then be in effect or unless an exemption from such
registration with respect to any proposed transfer or disposition of such
shares shall be available as described in an opinion from the holder's
counsel which opinion shall be reasonably acceptable to CompuDyne
Corporation."
IN WITNESS WHEREOF, Lydall has caused this Investment Purpose
Agreement to be executed on the date first set forth above.
ATTEST: LYDALL, INC.
/s/ Mary Adamowicz By: /s/ John E. Hanley
___________________________ _________________________
Secretary/Assistant Secretary John E. Hanley
Vice President-Finance and
Treasurer
Duly Authorized
EXHIBIT B TO SETTLEMENT AGREEMENT
FORM OF REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into
this 25th day of March, 1996 between CompuDyne Corporation, a
Pennsylvania corporation ("CompuDyne"), and Lydall, Inc., a Delaware
corporation ("Lydall").
WHEREAS, Lydall and Corcap, Inc., a Nevada corporation ("Corcap"),
have entered into a certain Settlement Agreement dated this date which
settles certain matters between Lydall and Corcap; and
WHEREAS, prior to the transfer of CompuDyne shares contemplated by
the Settlement Agreement, Corcap held 428,881 shares of the Common Stock,
par value $.75 per share, of CompuDyne; and
WHEREAS, the Settlement Agreement provides for the transfer of
120,000 restricted shares of CompuDyne Corporation Common Stock, par
value $.75 per share, (the "Shares") by Corcap to Lydall in settlement of
certain matters; and
WHEREAS, the Settlement Agreement provides for a commitment by
CompuDyne to register the Shares if registration shall be necessary to
effectuate Lydall's sale of the Shares in the public market; and
WHEREAS, Lydall has relied upon the undertakings of CompuDyne in
entering into and accepting the terms of the Settlement Agreement with
Corcap and agreeing to take the Shares in settlement, and would not have
entered into the Settlement Agreement without the undertakings by
CompuDyne in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the
agreements by Lydall in the Settlement Agreement to settle certain claims
it has against Corcap, and for other good and valuable consideration,
receipt of which is hereby acknowledged by CompuDyne, CompuDyne and
Lydall agree as follows:
1. REGISTRATION AT LYDALL'S REQUEST. If, at any time after two
years from the date hereof, Lydall requests CompuDyne to effectuate the
registration of any of the Shares under the Securities Act of 1933 (which
Act together with any similar Federal statute in force in the future is
hereinafter referred to as the "Act"), CompuDyne shall (a) as
expeditiously as possible use its best efforts to effect registration
under the Act of all of the Shares which CompuDyne has been requested to
register; (b) use its best efforts to have the Registration Statement for
such Shares declared effective; (c) notify Lydall promptly after it shall
receive notice thereof, of the time when such Registration Statement has
become effective or any supplement to any prospectus forming a part of
such Registration Statement has been filed; (d) notify Lydall promptly of
any request by the Securities and Exchange Commission (hereinafter
referred to as the "Commission") for the amending or supplementing of
such Registration Statement or prospectus or for additional information;
(e) prepare and file with the Commission, promptly upon Lydall's request,
any amendments or supplements to such Registration Statement or
prospectus which, in the opinion of counsel for Lydall concurred in by
counsel for CompuDyne, may be necessary or advisable in connection with
the distribution of the securities by Lydall; (f) prepare and promptly
file with the Commission and promptly notify Lydall of the filing of such
amendment or supplement to such Registration Statement or prospectus as
may be necessary to correct any statements or omission if, at any time
when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which any
such prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading; (g) in case
Lydall or any underwriter for Lydall is required to deliver a prospectus,
at a time when the prospectus then in effect may no longer be used under
the Act, prepare promptly upon request such amendment or amendments to
such Registration Statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10 of the
Act; (h) not file any amendment or supplement to the Registration
Statement or prospectus to which Lydall shall reasonably object after
having been furnished a copy at a reasonable time prior to the filing
thereof; (i) advise Lydall promptly after it shall receive notice or
obtain knowledge thereof of the issuance of any stop order by the
Commission suspending the effectiveness of any such Registration
Statement or of the initiation or threatening of any proceeding for that
purpose and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be
issued; (j) use its best efforts to qualify the Shares for transfer under
the securities laws of up to ten states as Lydall may designate, except
that it shall not be required in connection therewith or as a condition
thereof to execute a general consent to service or to qualify to do
business in any such states; (k) furnish to Lydall as soon as available
copies of any such Registration Statement and each preliminary or final
prospectus, or supplement required to be prepared pursuant to this
Section 1, all in such quantities as Lydall may from time to time
reasonably request; (l) take all action necessary in connection with the
qualification of the Shares (or any of them) under the laws of up to ten
states in which counsel for Lydall reasonably determines that such
qualification is necessary in order for Lydall to sell the Shares (or any
of them) in the public market; and (m) take all such other action as, in
the opinion of counsel for Lydall concurred in by counsel for CompuDyne,
may be reasonably necessary or appropriate in order for Lydall to sell
the Shares (or any of them) in the public market in compliance with all
applicable laws. Lydall may request CompuDyne to effectuate the
registration of any of the Shares in accordance with the preceding
sentence only once.
CompuDyne may include in such Registration Statement other shares of
its Common Stock which may be newly issued shares or shares held by other
shareholders. Notwithstanding the foregoing, if Lydall intends to sell
the Shares through one or more underwriters and the underwriters or the
representative of the underwriters advises Lydall in writing that
marketing factors require a limitation on the number of shares to be
underwritten, then such Registration Statement shall exclude such other
shares of Common Stock to be sold for the account of CompuDyne or any
other shareholders.
At any time 180 days after the effective date of the Registration
Statement registering the Shares (or any of them), CompuDyne may
deregister any Shares not yet sold.
2. PIGGYBACK REGISTRATION RIGHTS.
(a) RIGHT TO PIGGYBACK. Whenever CompuDyne proposes to
register any shares of CompuDyne Corporation Common Stock (or securities
convertible into or exchangeable or exercisable for CompuDyne Corporation
Common Stock) under the Act, whether for CompuDyne's account or for the
account of any other person (a "Proposed Registration"), and the
registration form to be used may be used for the registration of the
Shares (a "Piggyback Registration"), CompuDyne shall give prompt written
notice to Lydall of CompuDyne's intention to effect such a registration.
Such notice will specify among other things the proposed offering price,
the kind and number of securities proposed to be registered, the
distribution arrangements and such other information that at the time
would be appropriate to include in such notice, and CompuDyne will,
subject to paragraph (b) below, include in such Piggyback Registration
all the Shares (or any of them) with respect to which Lydall shall give
CompuDyne written request for inclusion therein within 15 business days
after receipt of CompuDyne's written notice. Except as may otherwise be
provided in this Agreement, the Shares (or any of them) with respect to
which such request for registration has been received will be registered
by CompuDyne and offered to the public pursuant to this Agreement on the
same terms and subject to the same conditions applicable to the
registration in a Proposed Registration of such shares of CompuDyne
Corporation Common Stock (or securities convertible into or exchangeable
or exercisable for CompuDyne Corporation Common Stock) to be sold by
CompuDyne or by the person selling under such Proposed Registration.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. If the managing
underwriter or underwriters, if any, advise Lydall in writing that in its
or their opinion, or, in the case of a Piggyback Registration not being
underwritten, CompuDyne shall reasonably determine (and notify Lydall of
such determination), after consultation with an investment banker or
advisor of nationally recognized standing, the number or kind of
securities proposed to be sold in such registration (including the Shares
or any of them) will adversely affect the success of such offering,
CompuDyne will include in such registration the number of securities, if
any, which, in the opinion of such underwriter or underwriters, or
CompuDyne, as the case may be, can be sold as follows: (i) first, the
shares of CompuDyne Corporation Common Stock that CompuDyne proposes to
sell, (ii) second, the Shares (or any of them) requested to be included
in such registration by Lydall, (iii) third, other shares of CompuDyne
Corporation Common Stock held by persons other than Lydall requested to
be included in such registration.
(c) LYDALL'S RIGHTS. If, at any time, CompuDyne, pursuant
to paragraph 2(a), shall give written notice to Lydall of CompuDyne's
intention to effect a Piggyback Registration and if Lydall gives notice
to CompuDyne of its election to include all or a portion of the Shares in
that Piggyback Registration as provided in paragraph 2(a) hereof,
CompuDyne shall have the duties and Lydall shall have the rights
described in paragraphs 1(c), 1(d), 1(e), 1(f), 1(h), 1(i), 1(j), 1(k),
1(l) and 1(m) with respect to the Piggyback Registration.
3. COSTS AND EXPENSES. CompuDyne will pay all costs and
expenses incident to the performance of its obligations under this
Agreement, including the fees and expenses of its counsel, the fees and
expenses of its accountants and all other costs and expenses incident to
the preparation, printing and filing under the Act of any such
Registration Statement, each prospectus, and all amendments and
supplements thereof, the costs (including fees and disbursements of
counsel) incurred in connection with the qualification of the securities
under the laws of up to ten states in which counsel for Lydall reasonably
determines that such qualification is necessary in order for Lydall
lawfully to sell the Shares (or any of them) in the public market, and
the cost of furnishing to Lydall copies of any such Registration
Statement, each preliminary prospectus, the final prospectus and each
amendment and supplement thereto.
4. LYDALL'S DUTY TO COOPERATE AND INDEMNITY. Lydall shall
cooperate with CompuDyne in any registration of all or a portion of the
Shares, including providing such information about itself and the Shares
as may be required under the Act and the rules and regulations
promulgated thereunder. Lydall shall indemnify CompuDyne for all
liabilities, charges, fees (including reasonable attorney's fees) and
other costs CompuDyne may incur arising from any material
misrepresentation with respect to such information or omission to state a
material fact necessary to make such information not misleading in the
Registration Statement, any amendment thereto and any related preliminary
prospectus, prospectus, or prospectus supplement.
5. CESSATION OF REGISTRATION RIGHTS AND OBLIGATIONS. Lydall's
right to request CompuDyne to register the Shares under paragraph 1 and
CompuDyne's obligation to notify Lydall of a Proposed Registration under
paragraph 2 shall cease if Lydall is not required to register the Shares
under the Act prior to the sale of the Shares in the public market, as
determined by counsel for Lydall concurred in by counsel for CompuDyne,
but in any event, such right and obligation shall cease three years after
the date hereof.
6. NOTICE. All notices or other communications hereunder shall
be in writing, shall be delivered by Federal Express or other nationally
recognized overnight delivery service for next business day delivery, all
charges prepaid, shall be effective on the next business day following
deposit with such delivery service, and shall be addressed as follows:
If to Lydall:
Lydall, Inc.
One Colonial Road
Manchester, CT 06045
Attention: Vice President-Finance
If to CompuDyne:
CompuDyne Corporation
120 Union Street
Willimantic, Connecticut 06226
Attention: President
or to such other address as either of the parties shall have specified
for itself by written notice sent as herein provided to the other party.
IN WITNESS WHEREOF, CompuDyne Corporation and Lydall, Inc. have
caused this Registration Rights Agreement to be executed on the date
first set forth above.
ATTEST: COMPUDYNE CORPORATION
/s/ Diane Burns By: /s/ Martin Roenigk
___________________________ __________________________
Secretary/Assistant Secretary Martin Roenigk
President and
Chief Executive Officer
Duly Authorized
ATTEST: LYDALL, INC.
/s/ Mary Adamowicz By: /s/ John E. Hanley
_____________________________ ____________________________
Secretary/Assistant Secretary John E. Hanley
Vice President-Finance and
Treasurer
Duly Authorized
EXHIBIT C TO SETTLEMENT AGREEMENT
All that certain piece or parcel of land, together with the
improvements thereon and appurtenances thereto, situated in the Town of
Killingly, County of Windham and State of Connecticut, located on the
south side of Lake Road and being the parcel shown and designated as Lot
1 on two certain maps or plans entitled "Subdivision Plan of Land
Killingly, Connecticut Killingly Industrial Estates C C & F Killingly
Investment Co. . . . Date Aug. 1, 1988 Scale 1" = 40' Revision No. 1
8/19/88 Revised Lots, Forbes Road, No. 2 10/11/88 Added Notes, Parcel 1A,
No. 3 11/16/88 General Revisions, No. 4 12/2/88 Added Easement, Revised
Parcel 1A, General . . . Sheet No. L2 of 9, Rizzo Associates, Inc.
Engineers and Environmental Scientists", and "Subdivision Plan of Land
Killingly, Connecticut Killingly Industrial Estates C C & F Killingly
Investment Co. . . . Date Aug. 1, 1988 Scale 1" = 40' Revision No. 1
8/19/88 Revised Lots, Forbes Road, No. 2 10/11/88 Added Easements, No. 3
11/16/88 General Revisions, No. 4 12/2/88 Added Easements, General
Revisions . . . Sheet No. L4 of 9, Rizzo Associates, Inc. Engineers and
Environmental Scientists", LESS and EXCEPT Parcel 1A as designated on
said maps, which maps or plans are on file in the Office of the Town
Clerk of the Town of Killingly as Maps Nos. 101A and 102A, reference to
which is hereby made, which parcel is more particularly bounded and
described as follows:
Beginning at a concrete monument marking the intersection of the
northeast corner of the premises herein described and the west line of
Cabot Drive, so-called, as shown on said maps; thence running S 19
degrees 06'11" E a distance of 258.71 feet to a point; thence running on
a curve to the left having a radius of 275.00 feet a distance of 51.33
feet to a point; thence running S 29 degrees 47'53" E a distance of 82.96
feet to a point; thence running on a curve to the right having a radius
of 225.00 feet a distance of 76.10 feet to a point; thence running S 10
degrees 25'08" E a distance of 325.31 feet to a concrete bound, the last
five (5) courses being along the west line of Cabot Drive, so-called, as
shown on said maps; thence running S 75 degrees 20'59" W a distance of
479.50 feet to a point; thence running N 64 degrees 26'44" W a distance
of 293.94 feet to a point; thence running N 15 degrees 25'23" W a
distance of 408.22 feet to an iron pipe; thence N 38 degrees 19'56" E a
distance of 65.00 feet to a point; thence N 50 degrees 46'05" E a
distance of 291.65 feet to a point; thence N 70 degrees 31'06" E a
distance of 360.00 feet to the point and place of beginning.
Together with those easements reserved, and subject to the easement for
electric and telephone utility installation and service granted, within a
certain Limited Warranty Deed from Acadia Eastern, Inc. to CC&F Killingly
Investment Company.
STOCK OPTION AGREEMENT
Corcap, Inc., a Nevada corporation ("Corcap"), hereby grants to
CompuDyne Corporation, a Pennsylvania corporation (the "Grantee"), the
option (the "Option") to purchase 16,666 shares (the "Option Shares") of
common stock, par value $.75 per share ("Common Stock") of CompuDyne
Corporation ("CompuDyne") at the purchase price of $.01 per share (the
"Purchase Price").
The Option is granted subject to the following terms and conditions:
1. The Option is immediately exercisable and shall expire five
years from the date of this Agreement (the "Expiration Date").
2. The Option may be exercised, in whole or in part, by written
notification delivered in person or by mail to Corcap's Corporate
Secretary at Corcap's executive offices in Willimantic, Connecticut or at
such other location of its executive offices. Such notification shall be
effective upon its receipt by the Corporate Secretary of Corcap on or
before the Expiration Date, and shall be in substantially the form
attached as Exhibit A, specifying the number of shares with respect to
which the Option is then being exercised and accompanied by payment for
such shares. The Option may not be exercised with respect to a
fractional share. In the event the Expiration Date falls on a day which
is not a regular business day at Corcap's executive offices, then such
written notification must be received at such office on or before the
last regular business day prior to the Expiration Date. Payment is to be
made by check payable to the order of Corcap. No shares shall be issued
on exercise of the Option until full payment for such shares has been
made and all checks delivered in payment therefor have been collected.
The Grantee shall not have any rights of a shareholder with respect to
the Option Shares prior to or upon exercise of the Option, including but
not limited to, the right to vote or to receive dividends, until stock
certificates have been transferred to the Grantee.
3. Corcap shall not be required to transfer any certificate or
certificates for shares purchased upon the exercise of any part of the
Option prior to the payment to Corcap, upon its demand, of any amount
requested by Corcap for transfer or stamp taxes or any other applicable
tax or assessment (plus interest or penalties thereon, if any, caused by
a delay in making such payment) incurred by reason of the exercise of the
Option or the transfer of such shares. The Option shall be exercised and
shares transferred only upon compliance with the Securities Act of 1933,
as amended (the "Act"), and any other applicable securities laws, and the
Grantee shall comply with any requirements imposed by the Securities and
Exchange Commission or any state securities commission under such laws or
as reasonably requested by Corcap.
4. The Option is transferrable by the Grantee and may be
assigned, transferred, pledged or hypothecated in whole or in part by
operation of law or otherwise.
5. Notwithstanding any other provisions, in the event of a
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other changes in corporate structure or capitalization
affecting the Common Stock, the number of shares remaining to be
exercised under the Option and the Purchase Price shall be appropriately
adjusted pro rata. If, as a result of any adjustment under this
paragraph, the Grantee becomes entitled to a fractional share, it shall
have the right to purchase only the adjusted number of full shares and no
payment or other adjustment will be made with respect to the fractional
share so disregarded.
6. Corcap shall not assign, transfer, pledge or hypothecate the
Option Shares (except as provided herein) until the Expiration Date.
7. The waiver by Corcap of any provision of the Option shall not
operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision of the Option.
8. The Option shall be irrevocable during the Option period and
its validity and construction shall be governed by the laws of the State
of Connecticut.
Dated: March 25, 1996
CORCAP, INC.
By /s/ Diane Burns
_________________________________
Diane Burns
Its President
I accept the Option, subject to its terms set forth above.
COMPUDYNE CORPORATION
By /s/ Martin Roenigk
_________________________________
Martin Roenigk
Its President
EXHIBIT A TO STOCK OPTION AGREEMENT
STOCK OPTION EXERCISE NOTICE
________________, 19__
Corcap, Inc.
120 Union Street
Willimantic, Connecticut 06226
Attention:
Ladies and Gentlemen:
Pursuant to the provisions of the Stock Option Agreement, dated
March 25, 1996 (the "Agreement"), whereby you have granted the
undersigned a stock option (the "Option") to purchase 16,666 shares of
Common Stock of Corcap Corporation (the "Company"), the undersigned
hereby notifies you of its election to exercise the Option to purchase
____________ of the shares covered by the Option at the price specified
therein.
I understand that the Agreement will be deemed to be amended
automatically to reduce the number of shares remaining to be exercised
under the Agreement by the number of shares exercised by this notice.
In full payment of the price for the shares being purchased, I am
delivering to you herewith a check payable to the order of the Company in
the amount of $__________.
Please mail the stock certificates to me at:
Name _____________________________
Address _____________________________
_____________________________
Calculation of funds due:
Option price $________ x
Number of shares exercised ________ =
Cost of Exercise $__________
Total Amount Due = $__________
To be paid by:
[ ] Cash or check = $__________
TOTAL = $__________
________________________________
Signature of Grantee
