EXHIBIT 10(M)
RELEASE AND SETTLEMENT AGREEMENT
This Release and
Settlement Agreement (the "Agreement") is hereby entered into
as of the 21st
day of November, 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. William Blair
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, "Blair"); and
C. Friedman,
Billings, Ramsey 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,
Blair 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 foster 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 Blair:
a. FBR shall pay
to CompuDyne any
amounts directed
to
be paid by FBR to CompuDyne and/or Blair pursuant to a settlement
between FBR
and the United States Securities and Exchange Commission (the
"SEC") in In the
Matter of Friedman, Billings, Ramsey & 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 days 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 Blair 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.
3. In the event
that the total amount paid by FBR to
CompuDyne and/or Blair pursuant to Paragraph 1 of this Agreement
exceeds four
million five hundred thousand dollars ($4,500,000), CompuDyne and
Blair agree to
deduct any amount paid in excess of four million five hundred
thousand dollars
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($4,500,000) from the amount paid to CompuDyne pursuant to
Paragraph 1(b) of
this Agreement, and CompuDyne and Blair 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 Blair 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 Blair in In the Matter of
Friedman,
Billings, Ramsey &
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 Blair, 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'
fee
