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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date earliest event reported) January 31, 1997
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CONOLOG CORPORATION
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(exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-8174 52-0853566
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(Commission File Number) (IRS Employer Identification
Number)
5 Columbia Road, Somerville, NJ 08876
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (908) 722-8081
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On January 31, 1997, The Chase Manhattan Bank, a New York Banking
corporation (the "Bank") and Conolog Corporation, a Delaware corporation (the
"Registrant") 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 ("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 Registrant at any time on 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 Holdings, Inc., a Delaware
corporation ("CNL") entered into Amendment No. 1 to the Option and Purchase,
Sale and Assignment Agreement dated September 12, 1996 (the "Option Agreement")
between the Bank and CNL. 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 Registrant
and the Bank, (ii) the Note and (iii) the 375,000 shares of the Registrant'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 Registrant and CNL entered into an agreement dated as of September 12,
1996 (the "Agreement"), whereby CNL agreed to lend up to $2,500,000 to the
Registrant under certain circumstances and the Registrant 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 "CNL Option Shares"). The Registration Statement was declared
effective on November 8, 1996.
The amended Option Agreement now provides that on or before February 5,
1997, CNL will purchase from the Bank for an aggregate purchase price of
$600,000, no less than (i) 133,333 shares of
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Common Stock for $399,999, subject to the approval of I.A. Rabinowitz, Inc. and
(ii) $200,001 of the Debt Claim represented by the Note. CNL thereafter may
exercise the remainder of the option on or before April 15, 1997. In addition,
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.
Item 7. Financial Statements and Exhibits
c) Exhibits
Exhibit
No. Document
- --- --------
(a) Amendment No. 1 dated January 31, 1997 to Conolog
Corporation Allonge (dated September 11, 1996), between
the Bank and Registrant.
(b) Amendment No. 1 dated January 31, 1997 to Option and
Purchase, Sale and Assignment Agreement (dated as of
September 12, 1996), between the Bank and Registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly authorized and caused the undersigned to sign this
Report on the Registrant's behalf.
CONOLOG CORPORATION
By: /s/ Robert S. Benou
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Robert S. Benou
President
Dated: January 31, 1997
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EXHIBIT (a)
AMENDMENT NO. 1
to
Conolog Corporation Allonge dated September 11, 1996
January 31, 1997
The Conolog Corporation Allonge dated September 11, 1996 (the "Allonge")
attached to and made a part of the Amended and Restated Term Note dated as of
August 2, 1995 (the "Note") in the original principal amount of $1,025,000.00
payable by Conolog Corporation, a Delaware corporation (the "Company") to the
order of The Chase Manhattan Bank f/k/a Chemical Bank (the "Bank"), as successor
by merger with Manufacturers Hanover Trust Company, is hereby amended as
follows:
1. Numbered paragraph 1 of the Allonge is deleted in its entirety
and replaced with the following:
1. The Bank may at any time convert all or a portion of the then
unpaid amount of principal and interest due under the Note (the
"Debt Claim") into shares (the "Note Shares") of the Company's
common stock (the "Common Stock") in an amount not to exceed
1,400,000.
To convert the entire Debt Claim, the Bank must surrender same at
the office of the Company, together with a written notice of
conversion in the form annexed hereto as Exhibit A. To convert a
portion of the Debt Claim other than the entire outstanding
amount of such claim, the Bank must deliver to the Company a
written notice of conversion in the form annexed hereto as
Exhibit B, with a
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notation on Schedule A hereto of the amount by which the Debt
Claim will be reduced upon the conversion. The number of Note
Shares to be obtained in any conversion of less than the entire
outstanding Debt Claim shall be equal to the dollar amount of the
portion of the Debt Claim being converted divided by 3 (i.e., $3
of Debt Claim would be converted into 1 Note Share).
Such conversion rights may be exercised by the Bank or its
asignee on or before April 15, 1997. Such conversion rights will
terminate and be of no further force or effect after that date.
The Company agrees to reserve 1,400,000 shares of its authorized
but unissued Common Stock for issuance in connection with
conversion of all or portions of the Debt Claim by the Bank or
its assignees.
2. Numbered Paragraph 4 of the Allonge is amended by inserting after
the "6" in the date "September 11, 1996" the phrase ", as amended by that
certain Amendment No. 1 to Conolog Corporation Allonge dated January 31, 1997'."
3. There is hereby added a new Paragraph 6 to the Allonge as follows:
Upon the conversion of the entire Debt Claim by the Bank or its assignee, the
Bank or its assignee, as appropriate, shall promptly execute and
deliver to the Company such documents and instruments as shall be
reasonably required to release all liens, security interests and
mortgages securing the payment of the Debt Claim.
4. Except as expressly amended hereby, the Note and the Allonge remain
in full force and effect.
CONOLOG CORPORATION
By: /s/ Robert S. Benou
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Name: Robert S. Benou
Title: President
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THE CHASE MANHATTAN BANK
By: /s/ Mark A. Rechan
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Name: Mark A. Rechan
Title: Vice President
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SCHEDULE A
to
Conolog Corporation Allonge
Amount of Conversion Amount of
Pre-conversion Amount Post-conversion
Debt Claim (Date) ---------- Debt Claim(1)
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$1,012,500.00 (P) (2-3-97) $923,324.60 (P)
110,825.60 (I) $200,001.00 -0- (I)
- --------------------
(1) Debt Claim conversion proceeds will be applied first to accrued
interest, then to principal amounts due. Interest will continue to
accrue on the Post Conversion Debt Claim amount as previously agreed.
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EXHIBIT B
NOTICE OF CONVERSION
Conolog Corporation
5 Columbia Road
Somerville, New Jersey 08876
The undersigned hereby exercises the right to convert a portion
of the Debt Claim into Note Shares pursuant to and in accordance with
the terms and conditions of the Allonge dated September 11, 1996, as
amended by that certain Amendment No. 1 thereto dated January 31, 1997,
and requests that a certificate for such shares be issued in the name of
CNL Holdings, Inc. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Amendment.
Dated: January , 1997 THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank)
By:
---------------------------------
Name:
Title:
Address:
CNL HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
Address:
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EXHIBIT (b)
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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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 31, 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").
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(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 Date and all Interim
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
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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"). 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
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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]
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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 A. Rechan
______________________________
Name: Mark A. Rechan
Title: Vice President
CNL HOLDINGS, INC.
By: /s/ Randolph Pace
_____________________________
Name: Randolph Pace
Title: President
