EX-10.3

> THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
> BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND
> THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD,
> OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
> REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL
> REASONABLY SATISFACTORY TO CONOLOG CORPORATION THAT SUCH REGISTRATION IS NOT
> REQUIRED.

Principal Amount: $ _____________      
Issue Date: March 12, 2007
 

CONVERTIBLE NOTE

          FOR VALUE RECEIVED, CONOLOG CORPORATION, a Delaware corporation
(hereinafter called "Borrower"), hereby promises to pay to
___________________________________,
______________________________________________________________, (the "Holder")
or its registered assigns or successors in interest or order, without demand,
the sum of [_________________________________________________] Dollars
($___________) (“Principal Amount”), with simple and unpaid interest thereon, on
February ___, 2010 (the "Maturity Date"), if not sooner paid.

          This Note has been entered into pursuant to the terms of a
subscription agreement between the Borrower, the Holder and certain other
holders (the “Other Holders”) of secured convertible promissory notes (the
“Other Notes”), dated of even date herewith (the “Subscription Agreement”), and
shall be governed by the terms of such Subscription Agreement. Unless otherwise
separately defined herein, all capitalized terms used in this Note shall have
the same meaning as is set forth in the Subscription Agreement. The following
terms shall apply to this Note:

ARTICLE I

INTEREST; AMORTIZATION

          1.1.      Interest Rate. Subject to Section 5.7 hereof, interest
payable on this Note shall accrue at a rate per annum (the "Interest Rate") of
six percent (6%). Interest on the Principal Amount shall accrue from the date of
this Note and shall be payable quarterly, in arrears, and on the Maturity Date,
whether by acceleration or otherwise. Interest shall be payable in cash.
However, provided the Company has timely obtained the Approval (as defined in
Section 9(q) of the Subscription Agreement), if the Approval is required by
applicable NASD Market Place Rules and/or Nasdaq’s corporate governance rules
and provided there is an effective registration statement current and available
for the resale of the Shares and Warrant Shares (as defined in the Subscription
Agreement), and further provided no Event of Default is continuing following a
ten day cure period, then interest may be payable, at the option of the Company
in cash or registered Common Stock at an applied conversion rate equal to the
lessor of (i) the Fixed Conversion Price (as defined in Section 3.1 hereof), or
(ii) eighty-five percent (85%) of the closing bid price of the Common stock as
reported by Bloomberg L.P. for the five (5) trading days preceding such interest
payment date. In the event the closing bid price of the Common Stock is more
than $2.00 for each of the ten (10) days preceding an interest payment date,
then interest for that quarter shall be waived and shall not accrue.

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           1.2.      Repayment. The Note is repayable in full on the Maturity
Date. Provided the Company has timely obtained the Approval (as defined in
Section 9(q) of the Subscription Agreement) if the Approval is required by
applicable NASD Marketplace Rules and/or NASDAQ’s corporate governance rules and
provided there is an effective registration statement current and available for
the resale of the Shares and Warrant Shares (as defined in the Subscription
Agreement), and further provided no Event of Default is continuing following a
ten day cure period, then on the Maturity Date, any principal amount, interest
and any other amounts arising under the Subscription Agreement (“Outstanding
Amount”) that remains outstanding on the Maturity Date shall be paid at the
Company’s option, in either cash or in registered Common Stock at an applied
conversion rate equal to the lessor of (A) the Fixed Conversion Price, or (B)
eighty-five percent (85%) of the closing bid price of the Common stock as
reported by Bloomberg L.P. for the five (5) trading days preceding the Maturity
Date. The Borrower must send notice to the Holder by confirmed telecopier not
later than 6:00 P.M. NYC time on or before the 60th day prior to the Maturity
Date of its election to pay the Outstanding Amount in cash or registered Common
Stock.

          1.3.      Default Interest Rate. Following the occurrence and during
the continuance of an Event of Default, which, if susceptible to cure is not
cured within twenty (20) days, otherwise then from the first date of such
occurrence, the annual interest rate on this Note shall (subject to Section 5.7)
automatically be increased to fifteen percent (15%).

ARTICLE II

CONVERSION REPAYMENT

          2.1.      No Effective Registration. Notwithstanding anything to the
contrary herein, no amount payable hereunder may be paid in shares of Common
Stock by the Borrower without the Holder’s consent unless (a) either (i) an
effective current Registration Statement covering the shares of Common Stock to
be issued in satisfaction of such obligations exists, or (ii) an exemption from
registration of the Common Stock is available pursuant to Rule 144(k) of the
1933 Act, and (b) no Event of Default hereunder (or an event that with the
passage of time or the giving of notice could become an Event of Default),
exists and is continuing, unless such event or Event of Default is cured within
any applicable cure period or is otherwise waived in writing by the Holder in
whole or in part at the Holder's option.

           2.2.      Optional Redemption of Principal Amount. Provided an Event
of Default or an event which with the passage of time or the giving of notice
could become an Event of Default has not occurred, whether or not such Event of
Default has been cured, the Borrower will have the option of prepaying the
outstanding Principal amount of this Note ("Optional Redemption"), in whole or
in part, by paying to the Holder a sum of money equal to one hundred and
twenty-five percent (125%) of the Principal amount to be redeemed, together with
accrued but unpaid interest thereon and any and all other sums due, accrued or
payable to the Holder arising under this Note or any Transaction Document
through the Redemption Payment Date as defined below (the "Redemption Amount").
Borrower’s election to exercise its right to prepay must be by notice in writing
(“Notice of Redemption”). The Notice of Redemption shall specify the date for
such Optional Redemption (the "Redemption Payment Date"), which date shall be
ten (10) business days after the date of the Notice of Redemption (the
"Redemption Period"). A Notice of Redemption shall not be effective with respect
to any portion of the Principal Amount for which the Holder has a pending
election to convert, or for conversions initiated or made by the Holder during
the Redemption Period. On the Redemption Payment Date, the Redemption Amount,
less any portion of the Redemption Amount against which the Holder has exercised
its conversion rights, shall be paid in good funds to the Holder. In the event
the Borrower fails to pay the Redemption Amount on the Redemption

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Payment Date as set forth herein, then (i) such Notice of Redemption will be
null and void, (ii) Borrower will have no right to deliver another Notice of
Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a
non-curable Event of Default. A Redemption Notice may be given only at a time a
Registration Statement is effective for the sale of not less than one million
Shares underlying the Convertible Notes. A Notice of Redemption may not be given
nor may the Borrower effectuate a Redemption without the consent of the Holder,
if at any time during the Redemption Period an Event of Default or an Event
which with the passage of time or giving of notice could become an Event of
Default (whether or not such Event of Default has been cured), has occurred or
the Registration Statement registering the Registrable Securities is not
effective each day during the Redemption Period.

           2.3.      Mandatory Conversion. Provided an Event of Default has not
occurred, unless such Event of Default has been cured at least twenty (20) days
prior to the delivery of written notice by Borrower as hereinafter described,
then, commencing after the Actual Effective Date, the Borrower will have the
option by written notice to the Holder (“Notice of Mandatory Conversion”) of
compelling the Holder to convert all or a portion of the outstanding and unpaid
principal of the Note and accrued interest, thereon, into Common Stock at the
Conversion Price then in affect (“Mandatory Conversion”). The Notice of
Mandatory Conversion, which notice must be given on the first day following a
consecutive twenty (20) day trading period during which the closing bid price
for the Company’s Common Stock as reported by Bloomberg, LP for the Principal
Market shall be more than $3.00 each day and provided during the Lookback
Period, daily average trading volume is not less than 100,000 shares. The date
the Notice of Mandatory Conversion is given is the “Mandatory Conversion Date.”
The Notice of Mandatory Conversion shall specify the aggregate principal amount
of the Note which is subject to Mandatory Conversion, which amount may not
exceed in the aggregate, for all Holders who received Notes similar in term and
tenure as this Note, the dollar volume of Common Stock traded on the Principal
Market during the seven (7) trading days immediately preceding the Mandatory
Conversion Date. Mandatory Conversion Notices must be given proportionately to
all Holders of Notes who received Notes similar in term and tenure as this Note.
The Borrower shall reduce the amount of Note principal and interest subject to a
Notice of Mandatory Conversion by the amount of Note Principal and interest for
which the Holder had delivered a Notice of Conversion to the Borrower during the
twenty (20) trading days preceding the Mandatory Conversion Date. Each Mandatory
Conversion Date shall be a deemed Conversion Date and the Borrower and the
Holder will be required to comply with Section 2.1 above.

ARTICLE III

CONVERSION RIGHTS

           3.1.      Holder's Conversion Rights. Subject to Section 3.2, the
Holder shall have the right, but not the obligation at all times, to convert all
or any portion of the then aggregate outstanding Principal Amount of this Note,
into shares of Common Stock, subject to the terms and conditions set forth in
this Article III at the rate of $2.00 per share of Common Stock (“Fixed
Conversion Price”) as same may be adjusted pursuant to this Note and the
Subscription Agreement. The Holder may exercise such right by delivery to the
Borrower of a written Notice of Conversion pursuant to Section 3.3. After the
occurrence of an Event of Default, the Fixed Conversion Price shall be the
lesser of the Fixed Conversion Price or 85% of the VWAP for the five trading
days prior to a Conversion Date.

           3.2.      Conversion Limitation. The Holder shall not be entitled to
convert on a Conversion Date that amount of the Note in connection with that
number of shares of Common Stock which would be in excess of the sum of (i) the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates on a Conversion Date, (ii) any Common Stock issuable in connection
with the unconverted

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portion of the Note, and (iii) the number of shares of Common Stock issuable
upon the conversion of the Note with respect to which the determination of this
provision is being made on a Conversion Date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock of the Borrower on such Conversion Date. For the purposes
of the provision to the immediately preceding sentence, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the
foregoing, the Holder shall not be limited to aggregate conversions of only
4.99% and aggregate conversion by the Holder may exceed 4.99% . The Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section 3.2 will limit any conversion hereunder and to the extent that
the Holder determines that the limitation contained in this Section applies, the
determination of which portion of the Notes are convertible shall be the
responsibility and obligation of the Holder. The Holder may allocate decide
whether to convert a Note or exercise Warrants to achieve an actual 4.99%
ownership position.

           3.3.      Mechanics of Holder's Conversion.

                     (a)      In the event that the Holder elects to convert any
amounts outstanding under this Note into Common Stock, the Holder shall give
notice of such election by delivering an executed and completed notice of
conversion (a "Notice of Conversion") to the Borrower, which Notice of
Conversion shall provide a breakdown in reasonable detail of the Principal
Amount, accrued interest and amounts being converted. The original Note is not
required to be surrendered to the Borrower until all sums due under the Note
have been paid. On each Conversion Date (as hereinafter defined) and in
accordance with its Notice of Conversion, the Holder shall make the appropriate
reduction to the Principal Amount, accrued interest and fees as entered in its
records. Each date on which a Notice of Conversion is delivered or telecopied to
the Borrower in accordance with the provisions hereof shall be deemed a
"Conversion Date." A form of Notice of Conversion to be employed by the Holder
is annexed hereto as Exhibit A.

                     (b)      Pursuant to the terms of a Notice of Conversion,
the Borrower will issue instructions to the transfer agent accompanied by an
opinion of counsel, if so required by the Borrower's transfer agent and shall
cause the transfer agent to transmit the certificates representing the
Conversion Shares to the Holder by crediting the account of the Holder's
designated broker with the Depository Trust Corporation ("DTC") through its
Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business
days after receipt by the Borrower of the Notice of Conversion (the "Delivery
Date"). In the case of the exercise of the conversion rights set forth herein
the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such shares of
Common Stock, unless the Holder provides the Borrower written instructions to
the contrary.Notwithstanding the foregoing to the contrary, the Borrower or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC on the Holder’s behalf via DWAC (or certificates free of restrictive
legends) if the registration statement providing for the resale of the shares of
Common Stock issuable upon the conversion of this Note is effective and the
Holder has complied with all applicable securities laws in connection with the
sale of the Common Stock, including, without limitation, the prospectus delivery
requirements. In the event that Conversion Shares cannot be delivered to the
Holder via DWAC, the Borrower shall deliver physical certificates representing
the Conversion Shares by the Delivery Date.

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          3.4.      Conversion Mechanics.

                    (a)      The number of shares of Common Stock to be issued
upon each conversion of this Note pursuant to this Article III shall be
determined by dividing that portion of the Principal Amount and interest and
fees to be converted, if any, by the then applicable Fixed Conversion Price.

                    (b)      The Fixed Conversion Price and number and kind of
shares or other securities to be issued upon conversion shall be subject to
adjustment from time to time upon the happening of certain events while this
conversion right remains outstanding, as follows:

                              A.      Merger, Sale of Assets, etc. If the
Borrower at any time shall consolidate with or merge into or sell or convey all
or substantially all its assets to any other corporation, this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase such number and kind of shares or
other securities and property as would have been issuable or distributable on
account of such consolidation, merger, sale or conveyance, upon or with respect
to the securities subject to the conversion or purchase right immediately prior
to such consolidation, merger, sale or conveyance. The foregoing provision shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such consolidation, merger, sale or conveyance.

                                   B.      Reclassification, etc. If the
Borrower at any time shall, by reclassification or otherwise, change the Common
Stock into the same or a different number of securities of any class or classes,
this Note, as to the unpaid principal portion thereof and accrued interest
thereon, shall thereafter be deemed to evidence the right to purchase an
adjusted number of such securities and kind of securities as would have been
issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.

                              C.      Stock Splits, Combinations and Dividends.
If the shares of Common Stock are subdivided or combined into a greater or
smaller number of shares of Common Stock, or if a dividend is paid on the Common
Stock in shares of Common Stock, the Conversion Price shall be proportionately
reduced in case of subdivision of shares or stock dividend or proportionately
increased in the case of combination of shares, in each such case by the ratio
which the total number of shares of Common Stock outstanding immediately after
such event bears to the total number of shares of Common Stock outstanding
immediately prior to such event.

                               D.      Share Issuance. Until the sooner of 180
days from the Actual Effective Date of the Registration Statement, and if the
Approval is required by applicable NASD Market Place Rules and/or Nasdaq’s
corporate governance rules provided the Approval has been obtained, or the date
the Notes have been paid, if the Borrower shall issue any Common Stock except
for the Excepted Issuances (as defined in the Subscription Agreement), prior to
the complete conversion or payment of this Note, for a consideration less than
the Fixed Conversion Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issuance, the Fixed Conversion
Price shall be reduced to such other lower issue price. For purposes of this
adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Conversion Price. The

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reduction of the Fixed Conversion Price described in this paragraph is in
addition to the other rights of the Holder described in the Subscription
Agreement.

                    (c)      Whenever the Conversion Price is adjusted pursuant
to Section 3.4(b) above, the Borrower shall promptly mail to the Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a
statement of the facts requiring such adjustment.

          3.5.      Reservation. During the period the conversion right exists,
Borrower will reserve from its authorized and unissued Common Stock not less
than one hundred seventy-five percent (175%) of the number of shares to provide
for the issuance of Common Stock upon the full conversion of this Note. Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. Borrower agrees that its issuance of this Note
shall constitute full authority to its officers, agents, and transfer agents who
are charged with the duty of executing and issuing stock certificates to execute
and issue the necessary certificates for shares of Common Stock upon the
conversion of this Note.

          3.6      Issuance of Replacement Note. Upon any partial conversion of
this Note, a replacement Note containing the same date and provisions of this
Note shall, at the written request of the Holder, be issued by the Borrower to
the Holder for the outstanding Principal Amount of this Note and accrued
interest which shall not have been converted or paid, provided Holder has
surrendered an original Note to the Company. In the event that the Holder elects
not to surrender a Note for reissuance upon partial payment or conversion, the
Holder hereby indemnifies the Borrower against any and all loss or damage
attributable to a third-party claim in an amount in excess of the actual amount
then due under the Note.

           3.7      Shareholder Approval. If the Approval is required by
applicable NASD Market Place Rules and/or Nasdaq’s corporate governance rules,
then until the Company either obtains shareholder approval of the issuance of
the Securities, or an exemption from NASDAQ’s corporate governance rules as they
may apply to the Shares, and an opinion from counsel reasonably acceptable to
Subscriber that the issuance of the Shares will not violate NASDAQ’s corporate
governance rules nor may result in a delisting of the Company’s common stock
from the SmallCap, the Holder may not receive any Shares.

ARTICLE IV

EVENTS OF DEFAULT

          The occurrence of any of the following events of default ("Event of
Default") shall, at the option of the Holder hereof, make all sums of principal
and interest then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable, upon demand, without presentment, or
grace period, all of which hereby are expressly waived, except as set forth
below:

          4.1      Failure to Pay Principal or Interest. The Borrower fails to
pay any installment of Principal Amount, interest or other sum due under this
Note or any Transaction Document when due and such failure continues for a
period of five (5) business days after the due date.

          4.2      Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of the Subscription Agreement, this Note or
Transaction Document in any material respect and such breach, if subject to
cure, continues for a period of ten (10) business days after written notice to
the Borrower from the Holder.

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          4.3      Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Subscription
Agreement, Transaction Document or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith or therewith shall be
false or misleading in any material respect as of the date made and the Closing
Date.

          4.4      Receiver or Trustee. The Borrower or any Subsidiary of
Borrower shall make an assignment for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trustee for them or for a
substantial part of their property or business; or such a receiver or trustee
shall otherwise be appointed.

          4.5      Judgments. Any money judgment, writ or similar final process
shall be entered or filed against Borrower or any subsidiary of Borrower or any
of their property or other assets for more than $100,000, and shall remain
unvacated, unbonded or unstayed for a period of forty-five (45) days.

          4.6      Non-Payment. The Borrower shall have received a notice of
default, which remains uncured for a period of more than twenty (20) business
days, on the payment of any one or more debts or obligations aggregating in
excess of One Hundred Thousand Dollars (US $100,000.00) beyond any applicable
grace period;

          4.7      Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law, or the issuance of any notice in relation to such event, for the
relief of debtors shall be instituted by or against the Borrower or any
Subsidiary of Borrower and if instituted against them are not dismissed within
sixty (60) days of initiation.

          4.8      Delisting. Failure of the Common Stock to be quoted or listed
on the Principal Market; failure to comply with the requirements for continued
listing on the Bulletin Board for a period of seven consecutive trading days; or
notification from the Bulletin Board or any Principal Market that the Borrower
is not in compliance with the conditions for such continued listing on the
Principal Market.

          4.9      Stop Trade. An SEC or judicial stop trade order or Principal
Market trading suspension with respect to Borrower’s Common Stock that lasts for
five or more consecutive trading days.

         4.10      Failure to Deliver Common Stock or Replacement Note.
Borrower's failure to timely deliver Common Stock to the Holder pursuant to and
in the form required by this Note or the Subscription Agreement, and, if
requested by Borrower, a replacement Note, and such failure continues for a
period of five (5) business days after the due date.

          4.11      Non-Registration Event. The occurrence of a Non-Registration
Event as described in the Subscription Agreement.

          4.12      Reverse Splits. The Borrower effectuates a reverse split of
its Common Stock without twenty days prior written notice to the Holder.

          4.13      Cross Default. A default by the Borrower of a material term,
covenant, warranty or undertaking of any Transaction Document or other agreement
to which the Borrower and Holder are parties, or the occurrence of a material
event of default under any such other agreement which is not cured after any
required notice and/or cure period.

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ARTICLE V

MISCELLANEOUS

          5.1      Failure or Indulgence Not Waiver. No failure or delay on the
part of Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

          5.2      Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Borrower to: Conolog Corporation, 5
Columbia Road, Somerville, NJ 08876, Attn: Robert Benou, telecopier: (908)
722-5461, with a copy by telecopier only to: Sichenzia Ross Friedman Ference
LLP, 1065 Avenue of Americas, New York, NY 10018, Attn: David Manno, Esq.,
telecopier: (212) 930-9725, and (ii) if to the Holder, to the name, address and
telecopy number set forth on the front page of this Note, with a copy by
telecopier only to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New
York, New York 10176, telecopier number: (212) 697-3575.

          5.3      Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

          5.4      Assignability. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns.

          5.5      Cost of Collection. If default is made in the payment of this
Note, Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys' fees.

          5.6      Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
conflicts of laws principles that would result in the application of the
substantive laws of another jurisdiction. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the State of New York. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or

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unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Note. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the Borrower's
obligations to Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court in favor of the
Holder.

          5.7      Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

          5.8.      Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

          5.9      Redemption. This Note may not be redeemed or called without
the consent of the Holder except as described in this Note.

          5.10      Shareholder Status. The Holder shall not have rights as a
shareholder of the Borrower with respect to unconverted portions of this Note.
However, the Holder will have the rights of a shareholder of the Borrower with
respect to the Shares of Common Stock to be received after delivery by the
Holder of a Conversion Notice to the Borrower.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by an authorized officer as of the 12th day of March, 2007.

  CONOLOG CORPORATION           By:________________________________  
          Name:             Title:     WITNESS:          

 

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NOTICE OF CONVERSION

          (To be executed by the Registered Holder in order to convert the Note)

          The undersigned hereby elects to convert $_________ of the principal
and $_________ of the interest due on the Note issued by Conolog Corporation on
February ___, 2007 into Shares of Common Stock of Conolog Corporation (the
"Borrower") according to the conditions set forth in such Note, as of the date
written below.

Date of Conversion:
 
      Conversion Price:
 
      Number of Shares of Common Stock Beneficially Owned on the Conversion
Date: Less than 5% of the outstanding Common Stock of Conolog Corporation      
Shares To Be Delivered:
 
      Signature:
 
      Print Name:
 
      Address:
 
       
 

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