EXHIBIT 10.1
RELEASE AND SETTLEMENT AGREEMENT
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This Release and Settlement Agreement (the "Agreement") is
hereby entered into as of the __th day of _________, 2006 by and between the
following parties:
A. CompuDyne Corporation, including any of its predecessors,
successors, subsidiaries and present and former officers, directors, employees,
assigns, and persons acting on their behalf (collectively, "CompuDyne");
B. Xxxxxxx Xxxxx Mezzanine Capital Fund II, L.P. including any
of its predecessors, successors, subsidiaries and present and former officers,
directors, employees, assigns, and persons acting on their behalf (collectively,
"Xxxxx"); and
X. Xxxxxxxx, Xxxxxxxx, Xxxxxx Group, Inc., including any of its
predecessors, successors, subsidiaries and present and former officers,
directors, employees, assigns, and persons acting on their behalf (collectively,
"FBR") (CompuDyne, Xxxxx and FBR are collectively referred to herein as the
"Parties").
WHEREAS, on September 12, 2001, CompuDyne and FBR entered into
an agreement, which was amended on September 27, 2001, whereby FBR agreed to
act as financial advisor and lead underwriter in connection with the private
placement of two million four hundred fifty thousand (2,450,000) shares of
CompuDyne common stock (the "Offering");
WHEREAS, CompuDyne and FBR have expressed a desire to engage
in future business dealings and recognize that resolving the issues covered by
this Agreement will xxxxxx the ability to engage in future business dealings;
WHEREAS, the Parties do not admit that liability or wrongdoing
of any kind occurred in connection with the Offering.
WHEREAS, the Parties mutually desire to enter into a full and
final settlement of all claims that the Parties have or may have against one
another, from the beginning of time to the date of this Agreement, including
without limitation any and all claims arising out of or relating to the
Offering, or arising out of or relating to FBR's alleged trading in shares of
CompuDyne common stock (CDCY);
NOW, THEREFORE, in consideration of mutual covenants contained
herein, it is agreed by and between the Parties as follows:
1. FBR shall make the following payments to CompuDyne, for the
benefit of CompuDyne and Xxxxx:
a. FBR shall pay to CompuDyne any amounts directed to be
paid by FBR to CompuDyne and/or Xxxxx pursuant to a settlement between FBR and
the United States Securities and Exchange Commission (the "SEC") in In the
Matter of Friedman, Billings, Xxxxxx & Co., Inc. (the "SEC Settlement"); and
b. FBR shall pay to CompuDyne two million three hundred
thirty three thousand nine hundred fifty nine dollars ($2,333,959), within two
business day's following the execution of this Agreement by all Parties, by wire
transfer pursuant to wiring instructions to be provided by CompuDyne.
2. In the event that the total amount paid by FBR to CompuDyne
and/or Xxxxx pursuant to Paragraph 1 of this Agreement is less than four million
five hundred thousand dollars ($4,500,000), FBR shall pay the difference to
CompuDyne at such time as the SEC-directed funds are paid to CompuDyne, by wire
transfer pursuant to wiring instructions to be provided by CompuDyne.
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3. In the event that the total amount paid by FBR to CompuDyne
and/or Xxxxx pursuant to Paragraph 1 of this Agreement exceeds four million five
hundred thousand dollars ($4,500,000), CompuDyne and Xxxxx agree to deduct any
amount paid in excess of four million five hundred thousand dollars ($4,500,000)
from the amount paid to CompuDyne pursuant to Paragraph 1(b) of this Agreement,
and CompuDyne and Xxxxx further agree to return promptly such excess amounts up
to two million three hundred thirty three thousand nine hundred fifty nine
dollars ($2,333,959) to FBR. Except as provided in this paragraph, neither
CompuDyne nor Xxxxx shall have any obligation to pay any amounts to FBR under
this Agreement.
4. In the event the SEC determines not to require FBR to make
any payment to CompuDyne and/or Xxxxx in In the Matter of Friedman, Billings,
Xxxxxx & Co., Inc., within two business days of receiving such notice from the
SEC, FBR shall pay $2,166,041 to CompuDyne, by wire transfer pursuant to wiring
instructions to be provided by CompuDyne.
5. The Parties hereby enter into the following releases:
a. CompuDyne and Xxxxx, for themselves, their predecessors,
successors, insurers, attorneys and present and former agents, servants,
principals, directors, owners, officers, employees and assigns, hereby fully,
finally, and forever release and discharge FBR, from any and all claims, rights,
debts, liabilities, charges, losses, demands, acts, costs, attorneys' fees,
damages, suits, and causes of action of whatsoever kind, whether now known or
unknown and whether or not suspected or unsuspected, contingent or fixed, that
CompuDyne and Xxxxx now have or may have against FBR, from the beginning of time
through the date of this Agreement, including without limitation any and all
claims, rights, debts, liabilities, charges, losses, demands, acts, costs,
attorneys' fees, damages, suits, and causes of action arising out of or relating
to: (i) the Offering; (ii) any transaction(s) in CompuDyne securities prior to
the date of
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this Agreement; or (iii) any other financial transaction related to CompuDyne
entered into prior to the date of this Agreement, provided however, that: (i) no
release of FBR for any claim by CompuDyne and/or Xxxxx shall take effect until
after FBR has discharged its obligations to CompuDyne and/or Xxxxx pursuant to
the SEC Settlement; and (ii) this release shall have no force or effect with
respect to claims that Xxxxx or CompuDyne may have against persons other than
FBR in connection with such person's trading in CompuDyne stock.
b. FBR, for itself, its predecessors, successors, insurers,
attorneys and present and former agents, servants, principals, directors,
owners, officers, employees and assigns, hereby fully, finally, and forever
releases and discharges CompuDyne and Xxxxx from any and all claims, rights,
debts, liabilities, charges, losses, demands, acts, costs, attorneys' fees,
damages, suits, and causes of action of whatsoever kind, whether now known or
unknown and whether or not suspected or unsuspected, contingent or fixed, that
FBR now has or may have against CompuDyne and Xxxxx, from the beginning of time
through the date of this Agreement, including without limitation any and all
claims, rights, debts, liabilities, charges, losses, demands, acts, costs,
attorneys' fees, damages, suits, and causes of action arising out of or relating
to: (i) the Offering; (ii) any transaction(s) in CompuDyne securities prior to
the date of this Agreement; or (iii) any other financial transaction related to
CompuDyne entered into prior to the date of this Agreement, provided however,
that no release of CompuDyne and/or Xxxxx for any claim by FBR shall take effect
until after FBR has discharged its obligations to CompuDyne and/or Xxxxx
pursuant to the SEC Settlement.
6. From the date of this Agreement until the date the releases
in Paragraph 5 become effective, CompuDyne and Xxxxx agree not to commence any
litigation against FBR, and FBR agrees not to commence any litigation against
CompuDyne or Xxxxx, arising out of or
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relating to any fmancial transactions related to CompuDyne entered into prior to
the date of this Agreement, including without limitation any and all claims
covered by the releases in Paragraph 5.
7. Within two business days following the execution of this
Agreement by all Parties, FBR shall return, or cause to be returned, to
CompuDyne the 40,000 warrants, which have no value, issued to FBR in connection
with its work on the Offering. Upon receipt of the warrants, CompuDyne shall
promptly cause the warrants to be cancelled.
8. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, including any disputes as to arbitrability,
shall be settled by any means mutually agreed upon by the Parties. In the
absence of any such agreement, it shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
a. The place of arbitration shall be Washington, D.C., and
the arbitration tribunal shall consist of three (3) arbitrators, of whom one
shall be nominated by each of the parties and the third, who shall serve as
chairman, shall be chosen by the two party-nominated arbitrators or, in the
event the party-nominated arbitrators are unable or unwilling to designate the
third arbitrator, by the American Arbitration Association.
b. The award of the arbitrators shall be fmal and binding.
The Parties waive any right to appeal the arbitral award, to the extent the
right to appeal may be lawfully waived. Each Party retains the right to seek
judicial assistance: (i) to compel or aid arbitration; (ii) to obtain interim
measures of protection pending arbitration, including equitable relief; or (iii)
to enforce any decision of the arbitrators, including the fmal award.
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9. Each of the Parties represents and warrants that it has read
this Agreement and that it is authorized to enter into this Agreement. Each
Parry represents that it has made such investigation of the facts pertaining to
this Agreement as they deem necessary and desirable and have received
independent legal and business advice with respect to the advisability of
executing this Agreement.
10. This Agreement is fmal and binding and inures to the
benefit of each of the Parties together with their respective successors,
transferees and assigns. No modification or waiver of any provision of this
Agreement is effective unless agreed to, in writing, by all of the affected
Parties.
11. Any notice, demand, consent, approval, request, or other
communication required or permitted to be given hereunder shall be in writing
and delivered either personally to the persons specified below, or by overnight
express mail, as follows:
If to CompuDyne or Xxxxx:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
Xxxxxxx & Xxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to the FBR:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
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Copy to:
Xxxxxxx X. Xxxxxxx
Chief Legal Officer
Friedman, Billings, Xxxxxx Group, Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
12. This Agreement may be executed in identical counterparts.
Each counterpart hereof is deemed to be an original instrument, but all
counterparts hereof taken together constitute a single document. Facsimile
signatures are deemed originals.
13. The Parties agree to execute any and all documents
reasonably necessary to implement the terms and provisions of the Agreement.
14. This Agreement was mutually drafted and agreed upon and
should not be construed against any Party.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by each of them or their duly authorized
representatives as of the date first noted above.
COMPUDYNE CORPORATION, by its
Authorized Agent:
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Printed Name:
Title:
XXXXXXX XXXXX MEZZANINE
CAPITAL FUND II, L.P., by its Authorized
Agent:
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Printed Name:
Title:
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FRIEDMAN, BILLINGS, XXXXXX
GROUP, INC., by its Authorized Agent:
Printed Name:
Title:
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