-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, LAP76tDPonjXa4LgIFzJ3d6Pxb01igPn7ezDSudjlDFnNvav3DeKQeaw1jJ6es9l AS26PIQCpFFIQmVGh1hjLQ== 0000915656-95-000042.txt : 19950901 0000915656-95-000042.hdr.sgml : 19950901 ACCESSION NUMBER: 0000915656-95-000042 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19950830 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COMPUDYNE CORP CENTRAL INDEX KEY: 0000022912 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 231408659 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-36588 FILM NUMBER: 95569158 BUSINESS ADDRESS: STREET 1: 90 STATE HOUSE SQ CITY: HARTFORD STATE: CT ZIP: 06103-3720 BUSINESS PHONE: 2032477611 MAIL ADDRESS: STREET 1: 90 STATE HOUSE SQ CITY: HARTFORD STATE: CT ZIP: 06103 FORMER COMPANY: FORMER CONFORMED NAME: CDC CONTROL SERVICES INC DATE OF NAME CHANGE: 19680510 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CORCAP INC CENTRAL INDEX KEY: 0000835176 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 061237135 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 90 STATE HOUSE SQ STREET 2: STE 2121 12TH FLR CITY: HARTFORD STATE: CT ZIP: 06103-3720 BUSINESS PHONE: 2032477611 MAIL ADDRESS: STREET 1: 90 STATE HOUSE SQ CITY: HARTFORD STATE: CT ZIP: 06103 SC 13D/A 1 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 EX-1 2 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. EX-2 3 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 EX-3 4 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 _____________________________ -----END PRIVACY-ENHANCED MESSAGE-----