<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D/A
Amendment No. 1
Under the Securities Exchange Act of 1934
CONOLOG CORPORATION
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
208254409
(CUSIP Number for Common Stock)
Robert S. Benou
Conolog Corporation
5 Columbia Road
Somerville, NJ 08876
(908) 722-8081
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 5, 1996
(Date of Event which Requires 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. [ ] (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than 5% of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of 5% or less of such
class.)
Exhibit Index Page 1 of 30 Pages
is located at page 18.
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CUSIP No. 208254409 for Common Stock Page 2 of 30 Pages
1) Name of Reporting Person: CNL Holdings, Inc.
SS or IRS Identification No. of Above Person:
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S.A.
Number of 7) Sole Voting None.
Shares Power:
Beneficially
Owned by Each
Reporting
Person With
8) Shared Voting None.
Power:
9) Sole Dispositive CNL Holdings, Inc. owns an
Power: option to purchase 241,667
shares of Common Stock and
an option to purchase a
Promissory Note convertible
into 1,333,333 shares of
Common Stock. All of such
shares are the subject of an
irrevocable proxy in favor of
Robert S. Benou, President of
the Issuer. CNL Holdings,
Inc. is controlled by James
R.Solakian and Dune Holdings,
Inc.
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CUSIP No. 208254409 for Common Stock Page 3 of 30 Pages
10) Shared Dispositive None.
Power:
11) Aggregate Amount Beneficially Owned by the Reporting Persons:
1,575,000 shares of Common Stock.
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11): 22% of the
Common Stock based on 1,098,630 shares of Common Stock
outstanding as of February 5, 1997. (64.8% of the Common
Stock outstanding, assuming conversion of Promissory Note into
1,333,333 shares of Common Stock).
14) Type of Reporting Person (See Instructions): CO
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CUSIP No. 208254409 for Common Stock Page 4 of 30 Pages
1) Name of Reporting Person: Dune Holdings, Inc.
SS or IRS Identification No. of Above Person:
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S.A.
Number of 7) Sole Voting None.
Shares Power:
Beneficially
Owned by Each
Reporting
Person With
8) Shared Voting None.
Power:
9) Sole Dispositive CNL Holdings, Inc. owns an
Power: option to purchase 241,667
shares of Common Stock and
an option to purchase a
Promissory Note convertible
into 1,333,333 shares of
Common Stock. All of such
shares are the subject of an
irrevocable proxy in favor of
Robert S. Benou, President of
the Issuer. CNL Holdings,
Inc. is controlled by James
R.Solakian and Dune Holdings,
Inc.
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CUSIP No. 208254409 for Common Stock Page 5 of 30 Pages
10) Shared Dispositive None.
Power:
11) Aggregate Amount Beneficially Owned by the Reporting Persons:
1,575,000 shares of Common Stock.
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11): 22% of the
Common Stock based on 1,098,630 shares of Common Stock
outstanding as of February 5, 1997. (64.8% of the Common
Stock outstanding, assuming conversion of Promissory Note into
1,333,333 shares of Common Stock).
14) Type of Reporting Person (See Instructions): CO
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CUSIP No. 208254409 for Common Stock Page 6 of 30 Pages
1) Name of Reporting Person: Randolph K. Pace
SS or IRS Identification No. of Above Person:
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S.A.
Number of 7) Sole Voting None.
Shares Power:
Beneficially
Owned by Each
Reporting
Person With
8) Shared Voting None.
Power:
9) Sole Dispositive CNL Holdings, Inc. owns an
Power: option to purchase 241,667
shares of Common Stock and
an option to purchase a
Promissory Note convertible
into 1,333,333 shares of
Common Stock. All of such
shares are the subject of an
irrevocable proxy in favor of
Robert S. Benou, President of
the Issuer. CNL Holdings,
Inc. is controlled by James
R.Solakian and Dune Holdings,
Inc.
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CUSIP No. 208254409 for Common Stock Page 7 of 30 Pages
10) Shared Dispositive None.
Power:
11) Aggregate Amount Beneficially Owned by the Reporting Persons:
1,575,000 shares of Common Stock.
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11): 22% of the
Common Stock based on 1,098,630 shares of Common Stock
outstanding as of February 5, 1997. (64.8% of the Common
Stock outstanding, assuming conversion of Promissory Note into
1,333,333 shares of Common Stock).
14) Type of Reporting Person (See Instructions): IN
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CUSIP No. 208254409 for Common Stock Page 8 of 30 Pages
1) Name of Reporting Person: Judith Pace
SS or IRS Identification No. of Above Person:
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S.A.
Number of 7) Sole Voting None.
Shares Power:
Beneficially
Owned by Each
Reporting
Person With
8) Shared Voting None.
Power:
9) Sole Dispositive CNL Holdings, Inc. owns an
Power: option to purchase 241,667
shares of Common Stock and
an option to purchase a
Promissory Note convertible
into 1,333,333 shares of
Common Stock. All of such
shares are the subject of an
irrevocable proxy in favor of
Robert S. Benou, President of
the Issuer. CNL Holdings,
Inc. is controlled by James
R.Solakian and Dune Holdings,
Inc.
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CUSIP No. 208254409 for Common Stock Page 9 of 30 Pages
10) Shared Dispositive None.
Power:
11) Aggregate Amount Beneficially Owned by the Reporting Persons:
1,575,000 shares of Common Stock.
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11): 22% of the
Common Stock based on 1,098,630 shares of Common Stock
outstanding as of February 5, 1997. (64.8% of the Common
Stock outstanding, assuming conversion of Promissory Note into
1,333,333 shares of Common Stock).
14) Type of Reporting Person (See Instructions): IN
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CUSIP No. 208254409 for Common Stock Page 10 of 30 Pages
1) Name of Reporting Person: James R. Solakian
SS or IRS Identification No. of Above Person:
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S.A.
Number of 7) Sole Voting None.
Shares Power:
Beneficially
Owned by Each
Reporting
Person With
8) Shared Voting None.
Power:
9) Sole Dispositive CNL Holdings, Inc. owns an
Power: option to purchase 241,667
shares of Common Stock and
an option to purchase a
Promissory Note convertible
into 1,333,333 shares of
Common Stock. All of such
shares are the subject of an
irrevocable proxy in favor of
Robert S. Benou, President of
the Issuer. CNL Holdings,
Inc. is controlled by James
R.Solakian and Dune Holdings,
Inc.
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CUSIP No. 208254409 for Common Stock Page 11 of 30 Pages
10) Shared Dispositive None.
Power:
11) Aggregate Amount Beneficially Owned by the Reporting Persons:
1,575,000 shares of Common Stock.
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11): 22% of the
Common Stock based on 1,098,630 shares of Common Stock
outstanding as of February 5, 1997. (64.8% of the Common
Stock outstanding, assuming conversion of Promissory Note into
1,333,333 shares of Common Stock).
14) Type of Reporting Person (See Instructions): IN
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CUSIP No. 208254409 for Common Stock Page 12 of 30 Pages
This amends and supplements the statement on Schedule 13D, as
amended (the "Schedule 13D"), filed with the Securities and
Exchange Commission by members of a group consisting of CNL
Holdings, Inc., Dune Holdings, Inc., Randolph K. Pace, Judith Pace,
and James R. Solakian (collectively, the "Reporting Persons") with
respect to their ownership of common stock, par value $1.00 per
share ("Common Stock"), of Conolog Corporation, a Delaware
corporation (the "Company"). Unless otherwise indicated, the
information set forth in the Schedule 13D remains unchanged.
Unless otherwise defined herein, all capitalized terms used herein
shall have the meanings ascribed to them in the previous filings of
Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As described in Item 6 below, CNL paid $150,000 for the option
to purchase 375,000 shares of Common Stock and a promissory note
convertible into 1,400,000 shares of Common Stock of the Issuer
(the "Note"). On February 5, 1997, CNL exercised a portion of its
option to purchase shares of Common Stock, by purchasing (i)
133,333 shares of Common Stock at $3.00 per share, and (ii) a
portion of the principal amount of the Note ($200,001) and
converted such portion of the Note into 66,667 shares of Common
Stock at $3.00 per share, for an aggregate consideration of
$600,000. The source of funds were loans to CNL by its
shareholders, to wit, Dune ($510,000) and James R. Solakian
($90,000).
ITEM 5. INTEREST IN SECURITY OF THE ISSUER
(a) The Reporting Persons own an option to purchase 241,667
shares of Common Stock, and an option to purchase the Note,
representing an aggregate of 22% of the Issuer's Common Stock(or
64.8% assuming conversion of the remaining portion of the Note).
(b) The Reporting persons do not have sole power to vote or
direct the vote of the shares of Common Stock. The Reporting
Persons have the sole power to dispose or to direct the disposition
of such shares. The shares of Common Stock owned by the Reporting
persons are the subject of an irrevocable proxy issued by the
Reporting Persons' in favor of Robert S. Benou, as President of the
Issuer.
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CUSIP No. 208254409 for Common Stock Page 13 of 30 Pages
(c) As described in Item 6 below, CNL paid $150,000 for the
option to purchase 375,000 shares of Common Stock and the Note
(convertible into 1,400,000 shares of Common Stock of the Issuer).
On February 5, 1997, CNL exercised a portion of its option to
purchase shares of Common Stock, by purchasing (i) 133,333 shares
of Common Stock at $3.00 per share, and (ii) a portion of the
principal amount of the Note ($200,001) and converted such portion
of the Note into 66,667 shares of Common Stock at $3.00 per share,
for an aggregate consideration of $600,000. On February 5, 1997
CNL sold, through a broker-dealer, 100,000 shares of Common Stock
at $3.00 per share. On February 6, 1997 CNL sold, through a
broker-dealer, an additional 100,000 shares of Common Stock at
$3.00 per share.
(d) Not Applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
The Reporting Persons acquired their option to purchase
375,000 shares of Common Stock and the Note (convertible into
1,400,000 shares of Common Stock of the Issuer), from The Chase
Manhattan Bank, a New York Banking corporation (the "Bank"),
pursuant to an Option and Purchase, Sale and Assignment Agreement,
dated as of September 12, 1996 ("Option Agreement") by and between
the Bank and CNL (which Option Agreement was amended as described
below). Under the original Option Agreement, the Bank granted an
option to CNL to purchase all of the Bank's interest in (i) the
Amended and Restated Term Loan Agreement dated as of August 2, 1995
between the Issuer and the Bank, (ii) the Note and (iii) the
375,000 shares of the Issuer's Common Stock owned by the Bank. CNL
paid $150,000 to the Bank for the option, which has an exercise
price of $1,500,000 and an expiration date of April 15, 1997. The
Issuer and CNL entered into an agreement (which agreement was
amended as provided below) dated as of September 12, 1996 (the
"Conolog Agreement"), whereby CNL agreed to lend up to $2,500,000
to the Issuer under certain circumstances and the Issuer agreed to
file a registration statement (the "Registration Statement") with
the Securities and Exchange Commission to register the 375,000
shares of Common Stock owned by the Bank and the 1,400,000 shares
of Common Stock into which the Note is convertible (collectively,
the "Acquired Shares"). The Registration Statement was declared
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CUSIP No. 208254409 for Common Stock Page 14 of 30 Pages
effective November 8, 1996.
Pursuant to the original Conolog Agreement, the proceeds of
the sale of the Acquired Shares were to be applied as follows: the
first $1,500,000 were to be paid to CNL for the payments made to
the Bank pursuant to the Option Agreement; 50% of the balance, up
to $2,500,000, to be loaned to the Issuer (the "Loans") within five
days of CNL's receipt of the proceeds.
Each loan will be evidenced by a Note bearing interest at the
rate of 4% per annum and will be due 12 months from the date of
such Loan. At maturity, the Issuer will have the option to pay
each Loan, together with all accrued interest thereon, by issuing
shares of a new Series C Preferred Stock (the "Series C Preferred")
having a value of $5.00 per share for purposes of such repayment.
The Series C Preferred will be non-voting and carry a
cumulative dividend of 8% per annum which may be payable by the
issuance of shares of Common Stock valued at $5.00 per share up to
a maximum of 40,000 shares per annum. The Series C Preferred will
be convertible into Common Stock at the rate of one share of common
stock for each share of Series C Preferred and have a liquidating
preference of $5.00 per share.
The Conolog Agreement also provides that for the two year
period commencing on the issuance of any shares of Series C
Preferred (the "Registration Period") CNL may elect to include its
Series C Preferred in any post-effective amendment to the
Registration Statement or any new registration statement under the
Securities Act of 1933, as amended. In addition, the Conolog
Agreement also provides that during the Registration Period, CNL
may give notice to the Issuer to the effect that it desires to
register its shares under the Act for public distribution in which
case the Issuer will file a post-effective amendment to a then
current registration statement or a new registration statement.
On January 31, 1997, the Bank and the Issuer entered into
Amendment No. 1 to the Conolog Corporation Allonge dated September
11, 1996 (the "Allonge") (which previously amended the Amended and
Restated Term Note dated as of August 2, 1995 between the
Registrant and the Bank(previously defined as the"Note")). The
original Allonge provided that the Bank may convert the entire
unpaid principal and interest due under the Note ("Debt Claim")
into 1,400,000 shares of Common Stock of the Issuer at any time on
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CUSIP No. 208254409 for Common Stock Page 15 of 30 Pages
or before April 15, 1997. The amended Allonge now provides the
Bank the right to convert all or, if it so desires, only a portion
of the Debt Claim. The number of shares issuable upon conversion
of a portion of the Debt Claim will be calculated on the basis of
1 share for each $3.00 of the Debt Claim being converted with the
balance of the 1,400,000 shares to be issued when all of the Debt
Claim has been converted.
On January 31, 1997, the Bank and CNL entered into Amendment
No. 1 to the Option Agreement. The amended Option Agreement
required CNL, on or before February 5, 1997, to purchase from the
Bank for an aggregate purchase price of $600,000, no less than (i)
133,333 shares of Common Stock for $399,999 and (ii) $200,001 of
the Debt Claim represented by the Note. As described in Item 5
above, CNL purchased such Common Stock and portion of the Debt
Claim on February 5, 1997. CNL may exercise the remainder of the
option on or before April 15, 1997. CNL may purchase from the Bank
additional shares of Common Stock owned by the Bank at the price of
$3.00 per share and portions of the Debt Claim from time to time.
On January 31, 1997, the Issuer and CNL entered into an
Amendment to the Conolog Agreement. The amended Conolog Agreement
provides that in the event not all of the Debt Claim was converted
into shares of Common Stock by the Bank prior to CNL's acquisition
of the Note, CNL will promptly convert the remaining portion of the
Debt Claim into shares of Common Stock in accordance with the Note.
In addition, the proceeds of the sale of the Acquired Shares are to
be applied as follows: First to reimburse CNL for payments made to
the Bank pursuant to Option Agreement; 50% of the balance, up to
$2,500,000, is to be loaned to the Issuer within five days of CNL's
receipt of the proceeds. Other than the above, no other
modifications to the Conolog Agreement were made.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
Exhibit # Description
<S> <C>
1 Amendment No. 1 dated January 31, 1997
to Option and Purchase, Sale and
Assignment Agreement(dated as of September
12,1996), by and between The Chase
Manhattan Bank and CNL Holdings, Inc.
</TABLE>
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CUSIP No. 208254409 for Common Stock Page 16 of 30 Pages
<TABLE>
<S> <C>
2 Amendment dated January 31, 1997 to
Agreement dated September 12, 1996 by and
between CNL Holdings, Inc. and Conolog
Corporation.
3 Promissory Note dated February 4, 1997
from CNL Holdings, Inc. in favor of Dune
Holdings, Inc.
4 Promissory Note dated February 4, 1997
from CNL Holdings, Inc. in favor of James
Solakian.
</TABLE>
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CUSIP No. 208254409 for Common Stock Page 17 of 30 Pages
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.
Dated: February 24, 1997
CNL Holdings, Inc.
By: /s/ Randolph K. Pace
----------------------------------
Randolph K. Pace, President
and Individually
/s/Judith Pace
----------------------------------
Judith Pace, Secretary and
Treasurer, and Individually
/s/James R.Solakian
----------------------------------
James R. Solakian, Individually
Dune Holdings, Inc.
By: /s/ Randolph K. Pace
----------------------------------
Randolph K. Pace, President
and Individually
/s/Judith Pace
----------------------------------
Judith Pace, Secretary and
Treasurer, and Individually
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CUSIP No. 208254409 for Common Stock Page 18 of 30 Pages
Exhibit Index
<TABLE>
<S> <C>
1 Amendment No. 1 dated January 31, 1997
to Option and Purchase, Sale and
Assignment Agreement (dated as of September
12, 1996), by and between The Chase
Manhattan Bank and CNL Holdings, Inc.
2 Amendment dated January 31, 1997 to
Agreement dated September 12, 1996 by and
between CNL Holdings, Inc. and Conolog
Corporation.
3 Promissory Note dated February 4, 1997
from CNL Holdings, Inc. in favor of Dune
Holdings, Inc.
4 Promissory Note dated February 4, 1997
from CNL Holdings, Inc. in favor of James
Solakian.
</TABLE>
<PAGE>
Exhibit 1
Page 19 of 30 Pages
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of January 31, 1997 (the "Amendment") to Option
and Purchase, Sale and Assignment Agreement dated as of September 12. 1996 (the
"Assignment"), between The Chase Manhattan Bank (the "Bank"), formerly known as
Chemical Bank, and CNL Holdings, Inc. (The "Buyer").
BACKGROUND:
The Buyer has requested that the Bank amend Section 2 of the Assignment to
allow the Buyer to purchase the Assigned Rights in installments between the date
hereof and April 15, 1997. The Bank is willing to do so on the terms and
conditions set forth below.
THEREFORE IT IS AGREED AS FOLLOWS:
SECTION 1. Definitions: References. Capitalized terms that are defined
in this Amendment shall have the meanings ascribed in this Amendment to such
terms. All other capitalized terms shall have the meanings ascribed to such
terms in the Assignment. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this Agreement"
shall from and after the date hereof refer to the Assignment as amended and
modified hereby. For purposes of this Amendment, the following capitalized term
shall have the meaning specified below:
"Assignment Closing Date" shall mean a business day between the date
hereof and April 15, 1997, including April 15, 1997, on which the Buyer
completes its purchase of the Assigned Rights (as hereinafter defined).
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Page 20 of 30 Pages
SECTION 2. Obligation to Purchase Absolute. The Buyer and the Bank
agree that, notwithstanding the references in the Assignment to the granting and
exercise of an option for the Buyer to purchase the Claims, the Buyer shall
purchase the Claims pursuant to the terms of the Assignment, as modified by
this Amendment, and such obligation is absolute.
SECTION 3. Amendment to Section 2(B) of the Assignment. Section 2(B) of
the Assignment is amended and restated in its entirety to read as follows:
(B)(i) Before the close of business in New York on February 5, 1997 (the
"First Installment Closing Date"), the Buyer shall purchase from the Bank, for
an aggregate purchase price of $600,000.00, no less than (a) 133,333 shares of
the Bank Shares, for a purchase price of $399,999.00 ($3.00 per share), plus (b)
$200,001.00 of the Debt Claim, as defined in that certain Amendment No. 1 dated
January _, 1997 to Conolog Corporation Allonge dated September 11, 1996 (as
amended, the "Allonge"), for a purchase price of $200,001.00, which portion of
the Debt Claim shall be simultaneously converted into Note Shares in accordance
with the terms of the Allonge.
(ii) On the Assignment Closing Date, the Bank shall sell, assign, transfer
and set over to the Buyer, without recourse, representation, or warranty (in
each case except as expressly provided herein), and the Buyer shall purchase,
subject to the terms and conditions hereof, an undivided one hundred percent
(100%) interest in (a) all right, title and interest of the Bank in and to the
Claims; (b) all right, title and interest of the Bank in and to the Loan
Agreement; (c) any property which may be exchanged for or distributed or
collected in respect of any of the foregoing; and (d) any and all causes of
action or claims of the Bank (whether known or unknown) against any person or
entity which are in any way based upon, arise out of, or are related to any of
the foregoing (the items described in clauses (a), (b), (c) and (d) being
collectively referred to herein as the "Assigned Rights"), excluding, however,
any and all claims which may arise out of services rendered by the Bank to the
Borrower other than under, and wholly unrelated to the Loan Agreement (the
"Retained Interests").
2
<PAGE>
Page 21 of 30 Pages
(iii) On any business day between the First Installment Closing Date and the
Assignment Closing Date (any such date, an "Interim Installment Closing Date";
together with the First Installment Closing Date and the Assignment Closing
Date, the "Closing Dates"), the Buyer may purchase from the Bank additional
portions of the Debt Claim, which portions of the Debt Claim shall be
simultaneously converted into Note Shares in accordance with the terms of the
Allonge.
(iv) On any of the Closing Dates, the Bank shall deliver or cause to be
delivered to the Buyer: (a) the stock certificates representing the Bank Shares
and Note Shares (as defined in the Allonge) purchased by the Buyer, together
with any necessary stock powers.
(v) On the Assignment Closing Date, the Bank shall also deliver or cause to
be delivered to the Buyer the originally executed Note, duly endorsed to the
Buyer or, at the Buyer's request, to the Buyer's nominee, and such other
instruments and documents as the Buyer may reasonably request to evidence the
Buyer's ownership of the Assigned Rights.
SECTION 4 Amendment to Section 2(C) of the Assignment. Section 2(C) of
the Assignment is amended and restated in its entirety to read as follows:
(C)(i) Amounts to be paid by the Buyer on the First Installment Closing Date
and any Interim Installment Closing Date shall be paid to the Bank at the Bank's
New York, New York office by wire transfer of immediately available funds in the
lawful currency of the United States of America in accordance with the wire
instructions set forth in Section 2(A) hereof.
(ii) On the Assignment Closing Date, the Buyer shall (a) pay to the Bank at
the Bank's New York, New York office the sum of One Million Five Hundred
Thousand Dollars ($1,500,000.00) (the "Assignment Purchase Price") minus the sum
of the amounts paid to the Bank for the Option ($150,000.00) and for all stock
and Debt Claim purchases on the First Installment Closing Dates, by wire
transfer of immediately available funds in the lawful currency of the United
States of America in accordance with the wire instructions set forth in Section
2(A) hereof; and (b) assume the Bank's
3
<PAGE>
Page 22 of 30 Pages
obligations under the Loan Agreement in respect of the Assigned Rights, which
arise, accrue and are chargeable to the period after the Assignment Closing
Date, other than the Retained Obligations (defined below) (collectively, the
"Assumed Obligations") (defined below) (collectively, the "Assumed
Obligations"). The Bank (and not the Buyer) shall pay and duly perform
all obligations or liabilities (1) arising from the breach by the Bank of its
representations, warranties, covenants, agreements or indemnities made by the
Bank in the Loan Documents; (2) for which the Buyer is indemnified under Section
6 hereof, or (3) arising from the Bank's gross negligence or willful misconduct
(collectively, the "Retained Obligations").
SECTION 5. Representations and Warranties. The Buyer hereby represents
and warrants to the Bank as follows:
A. Each of the representations and warranties made by or on behalf of the
Buyer were true and correct as of the date on which made and are also true and
correct at and as of the date hereof with the same effect as if made at and as
of such time.
B. The execution and delivery of this Amendment by the Buyer:
(i) are within the Buyer's corporate powers, have been duly authorized
by all necessary corporate action, and do not and will not contravene any
provision of law applicable to the Buyer;
(ii) do not contravene the terms of the articles of incorporation or
bylaws of the Buyer; and
(iii) create a valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights.
SECTION 6. Effectiveness. This Amendment shall become effective as of the
date upon which the following have been completed: (a) the purchase transactions
described in
4
<PAGE>
Page 23 of 30 Pages
Section 3 hereof with respect to Section 2(B)(i) of the Assignment, as amended
hereby, have been completed and the Bank has received the purchase price of
$600,000 by wire transfer of immediately available funds in the lawful currency
of the United States of America in accordance with the wire instructions set
forth in Section 2(A) of the Assignment; (b) the Buyer and the Bank deliver to
one another executed counterparts hereof; (c) the Borrower shall have executed
and delivered Amendment No. 1 to the Allonge; and (d) the Buyer has delivered to
the Bank copies of its certificate of incorporation and bylaws, a copy of the
resolution of the board of directors of the Buyer approving the terms hereof,
an original incumbency certificate verifying the authorization of the CNL
representative to execute this Amendment on behalf of CNL, and a certificate of
good standing for CNL as a foreign corporation doing business in New York.
SECTION 7. No Other Waivers: Reservation of Rights. Other than as
specifically provided herein, this Amendment shall not operate as a waiver of
any right, power, privilege or remedy of the Bank under the Assignment or an
amendment of any other term or condition of the Assignment.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
[NEXT PAGE IS SIGNATURE PAGE]
<PAGE>
Page 24 of 30 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
THE CHASE MANHATTAN BANK
By: /s/ Mark Richan
------------------------------
Name: Mark Richan
Title: Vice President
CNL HOLDINGS INC.
By: /s/ illegible
------------------------------
Name:
Title: President
<PAGE>
Exhibit 2
Page 25 of 30 Pages
AMENDMENT made this 31st day of January, 1997 between
CNL HOLDING, INC., a Delaware corporation (the "Investor") and
CONOLOG CORPORATION, a Delaware corporation (the "Company") to
the Agreement dated September 12, 1996 between the Investor and
the Company (the "Original Agreement").
WHEREAS, the Investor is, concurrently with the
execution hereof, amending the Option and Purchase, Sale and
Assignment Agreement between the Investor and The Chase Manhattan
Bank, formerly known as Chemical Bank (the "Bank"), dated as of
September 12, 1996 (the "Option Agreement");
WHEREAS, the Note (as that term is defined in the
Original Agreement) evidencing the Company's indebtedness to the
Bank is being further amended concurrently with the execution
hereof;
WHEREAS, the Investor and the Company have agreed to
amend the Original Agreement as more fully set forth herein;
NOW, THEREFORE, it is agreed as follows:
1. All capitalized terms used herein which are not
otherwise defined shall have the respective meanings ascribed to
them in the Original Agreement.
2. There is hereby added a new sentence to Section 1
of the Original Agreement as follows:
In the event all or any portion of the Note
has not been converted into shares of common
stock by the Bank prior to its acquisition by
the Investor, the Investor shall promptly
convert the Note (or the portion so acquired)
into shares of common stock in accordance
with the terms of the Note.
- 1 -
<PAGE>
Page 26 of 30 Pages
3. The first sentence of Section 2 of the Original
Agreement is hereby deleted and the following is hereby
substituted therefor:
All proceeds of the sale of the Acquired
Shares shall be applied as follows: First to
reimburse the Investor for payments
theretofore made to the Bank pursuant to the
Option Agreement.
4. Except as expressly set forth herein, the Original
Agreement shall continue in full force and effect in accordance
with its terms.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Amendment to the Original Agreement as of the date
and year first above written.
CNL HOLDING, INC.
By /s/ Randolph Pace
-------------------
(Title)
CONOLOG CORPORATION
By /s/ Robert S. Benou, President
-------------------------------
(Title)
- 2 -
<PAGE>
Exhibit 3
Page 27 of 30 Pages
PROMISSORY NOTE
$90,000 February 4, 1997
New York, New York
FOR VALUE RECEIVED, CNL HOLDINGS, INC., a Delaware corporation
("Maker"), promises to pay to James Solakian ("Holder") at such place as Holder
may designate in writing, the entire principal sum of ninety thousand dollars
($90,000.00), together with interest at the rate of eight percent (8%) per
annum,upon the demand of the Holder of the Note, at which time all principal and
interest shall be due and owing.
All payments of principal and interest hereunder shall be payable in
lawful money of the United States.
Maker shall be in default hereunder, at the option of Holder, upon the
occurrence of any of the following events: (i) the failure by Maker to make any
payment of principal or interest when due hereunder, and such failure shall have
continued for a period of more than ten (10) days after notice and a reasonable
opportunity to cure; (ii) the entering into of a decree or order by a court of
competent jurisdiction adjudicating Maker a bankrupt or the appointing of a
receiver or trustee of Maker upon the application of any creditor in an
insolvency or bankruptcy proceeding or other creditor's suit; (iii) a court of
competent jurisdiction approving as properly filed, a petition for
reorganization or arrangement filed against Maker under the Federal bankruptcy
laws and such decree or order not being vacated within thirty (30) days; (iv)
the pendency of any bankruptcy proceeding or other creditors' suit against
Maker; (v) a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws with respect to Maker; (vi) an assignment for the
benefit of creditors by Maker; (vii) Maker consents to the appointment of a
receiver or trustee in an insolvency or bankruptcy proceeding or other
creditors' suit; (viii) the existence of any uncured event of default under the
terms of any instrument in writing evidencing a debt to someone other than
Holder, provided, that Maker is not contesting in good faith by appropriate
proceedings such uncured event of default; (ix) the existence of any judgment
against, or any attachment of property of Maker; or (x) any other condition
which, in the good faith determination of Holder, would materially impair the
timely repayment of this Note.
Upon the occurrence of any event or condition of default hereunder, or
at any time
<PAGE>
Page 28 of 30 Pages
thereafter, Holder at his option may accelerate the maturity of this Note and
declare all of the indebtedness or any portions thereof to be immediately due
and payable, together with accrued interest thereon, and payment thereof may be
enforced by suit or other process of law.
If this Note is not paid when due, whether at maturity or by
acceleration, Maker agrees to pay all reasonable costs of collection and such
costs shall include without limitation all costs, attorneys' fees and expenses
incurred by Holder hereof in connection with any insolvency, bankruptcy,
reorganization, arrangement or similar proceedings involving Holder, or
involving any endorser or guarantor hereof, which in any way affects the
exercise by Holder hereof of its rights and remedies under this Note.
Presentment, demand, protest, notices of protest, dishonor and
non-payment of this Note and all notices of every kind are hereby waived.
The terms "Maker" and "Holder" shall be construed to include their
respective heirs, personal representatives, successors, subsequent holders and
assigns.
Regardless of the place of execution or performance, this letter and
the Note shall be governed by, and construed in accordance with, the laws of the
State of New York without giving effect to such state's conflicts of laws
provisions. Each of the parties hereto irrevocably consents to the jurisdiction
and venue of the federal and state courts located in the State of New York,
County of New York.
CNL HOLDINGS, INC.
By: /s/ Randolph K. Pace
----------------------------------
Randolph K. Pace
President
<PAGE>
Exhibit 4
Page 29 of 30 Pages
PROMISSORY NOTE
$510,000 February 4, 1997
New York, New York
FOR VALUE RECEIVED, CNL HOLDINGS, INC., a Delaware corporation
("Maker"), promises to pay to Dune Holdings, Inc. ("Holder") at such place as
Holder may designate in writing, the entire principal sum of five hundred ten
thousand dollars ($510,000.00), together with interest at the rate of eight
percent (8%) per annum,upon the demand of the Holder of the Note, at which time
all principal and interest shall be due and owing.
All payments of principal and interest hereunder shall be payable in
lawful money of the United States.
Maker shall be in default hereunder, at the option of Holder, upon the
occurrence of any of the following events: (i) the failure by Maker to make any
payment of principal or interest when due hereunder, and such failure shall have
continued for a period of more than ten (10) days after notice and a reasonable
opportunity to cure; (ii) the entering into of a decree or order by a court of
competent jurisdiction adjudicating Maker a bankrupt or the appointing of a
receiver or trustee of Maker upon the application of any creditor in an
insolvency or bankruptcy proceeding or other creditor's suit; (iii) a court of
competent jurisdiction approving as properly filed, a petition for
reorganization or arrangement filed against Maker under the Federal bankruptcy
laws and such decree or order not being vacated within thirty (30) days; (iv)
the pendency of any bankruptcy proceeding or other creditors' suit against
Maker; (v) a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws with respect to Maker; (vi) an assignment for the
benefit of creditors by Maker; (vii) Maker consents to the appointment of a
receiver or trustee in an insolvency or bankruptcy proceeding or other
creditors' suit; (viii) the existence of any uncured event of default under the
terms of any instrument in writing evidencing a debt to someone other than
Holder, provided, that Maker is not contesting in good faith by appropriate
proceedings such uncured event of default; (ix) the existence of any judgment
against, or any attachment of property of Maker; or (x) any other condition
which, in the good faith determination of Holder, would materially impair the
timely repayment of this Note.
<PAGE>
Page 30 of 30 Pages
Upon the occurrence of any event or condition of default hereunder, or
at any time thereafter, Holder at his option may accelerate the maturity of this
Note and declare all of the indebtedness or any portions thereof to be
immediately due and payable, together with accrued interest thereon, and payment
thereof may be enforced by suit or other process of law.
If this Note is not paid when due, whether at maturity or by
acceleration, Maker agrees to pay all reasonable costs of collection and such
costs shall include without limitation all costs, attorneys' fees and expenses
incurred by Holder hereof in connection with any insolvency, bankruptcy,
reorganization, arrangement or similar proceedings involving Holder, or
involving any endorser or guarantor hereof, which in any way affects the
exercise by Holder hereof of its rights and remedies under this Note.
Presentment, demand, protest, notices of protest, dishonor and
non-payment of this Note and all notices of every kind are hereby waived.
The terms "Maker" and "Holder" shall be construed to include their
respective heirs, personal representatives, successors, subsequent holders and
assigns.
Regardless of the place of execution or performance, this letter and
the Note shall be governed by, and construed in accordance with, the laws of the
State of New York without giving effect to such state's conflicts of laws
provisions. Each of the parties hereto irrevocably consents to the jurisdiction
and venue of the federal and state courts located in the State of New York,
County of New York.
CNL HOLDINGS, INC.
By: /s/ Randolph K. Pace
----------------------------------
Randolph K. Pace
President
