-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TK/cCYsupKV9QuxYbyZI/waJFYpE2AdXAUb1yE/TcOP38NlKR1w78FR0mBAswvvU BsWhhOu9NQ9RxN5Pv2InIw== 0000889812-97-000568.txt : 19970225 0000889812-97-000568.hdr.sgml : 19970225 ACCESSION NUMBER: 0000889812-97-000568 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970224 SROS: NASD GROUP MEMBERS: CNL HOLDINGS INC GROUP MEMBERS: CNL HOLDINGS, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONOLOG CORP CENTRAL INDEX KEY: 0000023503 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 520853566 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-18454 FILM NUMBER: 97542168 BUSINESS ADDRESS: STREET 1: 5 COLUMBIA RD CITY: SOMERVILLE STATE: NJ ZIP: 08876 BUSINESS PHONE: 9087228081 MAIL ADDRESS: STREET 1: 5 C0LUMBIA ROAD CITY: SOMERVILLE STATE: NJ ZIP: 08876-3588 FORMER COMPANY: FORMER CONFORMED NAME: DSI SYSTEMS INC DATE OF NAME CHANGE: 19751218 FORMER COMPANY: FORMER CONFORMED NAME: DATA SCIENCES INC DATE OF NAME CHANGE: 19751218 FORMER COMPANY: FORMER CONFORMED NAME: MICROSEARCH SYSTEMS INC DATE OF NAME CHANGE: 19690115 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CNL HOLDINGS INC CENTRAL INDEX KEY: 0001023792 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 750 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129803344 MAIL ADDRESS: STREET 1: 750 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 AMENDMENT NO. 1 TO SCHEDULE 13D 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. 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. 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 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. 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 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. 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 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. 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 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. 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 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. 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 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 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 Exhibit # Description 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.
CUSIP No. 208254409 for Common Stock Page 16 of 30 Pages 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.
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 CUSIP No. 208254409 for Common Stock Page 18 of 30 Pages Exhibit Index 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.
EX-1 2 AMENDMENT NO. 1 TO OPTIONAND PURCHASE, SALE AND ASSIGNMENT AGREEMENT 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). 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 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 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 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 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 EX-2 3 AMENDMENT TO AGREEMENT BY AND BETWEEN CNL HOLDINGS, INC. AND CONOLOG CORP. 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 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 - EX-3 4 PROMISSORY NOTE FROM CNL HOLDINGS, INC. IN FAVOR OF DUNE HOLDINGS, INC. 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 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 EX-4 5 PROMISSORY NOTE FROM CNL HOLDINGS, INC. IN FAVOR OF JAMES SOLAKIAN. 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 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 -----END PRIVACY-ENHANCED MESSAGE-----