Exhibit 10.5

CONOLOG CORPORATION

SELLING AGENT AGREEMENT

Dated as of July 29, 2009                    

Garden State Securities, Inc.
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, New Jersey 07701

Gentlemen:

                    Conolog Corporation (the “Company”) proposes to offer for
sale (the “Offering”) in a private offering pursuant to Regulation D promulgated
under the Securities Act of 1933, as amended (the “Act”) (i) up to One Million
Dollars ($l,000,000) of convertible debentures convertible into shares of common
stock (“Convertible Debentures”); (ii) common stock warrants (the “Warrants”);
and (iii) Class B warrants (“Class B Warrants”) exercisable for 36 months into
the Convertible Debentures (collectively, the “Securities”). Offers and sales of
the Securities shall be to Accredited Investors (as defined in Regulation D
promulgated by the Securities and Exchange Commission) or “qualified
institutional buyers” as defined under Rule 144A. This letter agreement shall
confirm our agreement concerning Garden State Securities, Inc. acting as
exclusive selling or placement agent (the “Selling Agent” or “GSS”)) in
connection with the sale of the Securities.

                    1. Appointment of Selling Agent.

                    On the basis of the representations and warranties contained
herein, and subject to the terms and conditions set forth herein, the Company
hereby appoints Garden State Securities, Inc.. as exclusive selling
agent/placement agent for a period beginning on the date hereof and terminating
on August 31, 2009 (unless terminated sooner pursuant to the terms hereof) and
grants to GSS the right to offer, as its agent, the Securities pursuant to the
terms of this Agreement. However, GSS will be compensated directly from the
Company within 1 business day of the receipt of the proceeds from any exercise
of the Class B Warrants based on the amount of gross proceeds received by the
Company from investors upon the exercise of the Class B Warrants and such
compensation shall survive the termination of the Offering. On the basis of such
representations and warranties, and subject to such conditions, GSS hereby
accepts such appointment and agree to use its reasonable best efforts to secure
subscriptions to purchase subscriptions for the Securities. The Company
understands that the Selling Agent is being retained to obtain subscriptions on
a “best efforts” basis and has not guaranteed the sale of any Securities.

                    2. Terms of the Offering.

                              (a) The Offering shall consist of (i) Convertible
Debentures; (ii) Warrants; and (iii) Class B Warrants. The Offering is being
made on a “best efforts” basis with no minimum offering amount of subscriptions,
and the parties shall use their reasonable efforts to consummate a closing of
subscriptions prior to August 31, 2009. In the event a subscription is not
accepted, such rejected subscription funds will be returned to the subscriber
without interest or deduction.

                              (b) The Company has prepared a subscription
agreement (the “Securities Purchase Agreement”) and form of Warrant and form of
Class B Warrant to be delivered to all

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prospective investors. The Securities Purchase Agreement, and form of Warrant
and Class B Warrants, including all supplements, exhibits and appendices thereto
and documents delivered therewith, are referred to herein as the “Documents” and
shall include any supplements or amendments in accordance with this Agreement.
The Offering shall commence on the date hereof, and shall expire at 5:00 p.m.,
New York time, on August 31, 2009, unless extended as provided above. Such
period, as same may be so extended, shall hereinafter be referred to as the
“Offering Period.”

                               (c) Each prospective investor (“Prospective
Investor”) who desires to purchase Securities shall deliver, in immediately
available funds in the amount necessary to purchase the amount of Securities
such Prospective Investor desires to purchase, to Grushko & Mittman, P.C. as
Escrow Agent (the “Escrow Agent”), in accordance with the wire transfer
instructions set forth in the Escrow Agreement between the Company, the Escrow
Agent and the Prospective Investor. The Prospective Investor shall also deliver
their executed Securities Purchase Agreement to the Selling Agent for delivery
to the Escrow Agent. The Selling Agent shall not have any obligation to
independently verify the accuracy or completeness of any information contained
in any Purchase Agreement or the authenticity, sufficiency, or validity of any
check delivered by any Prospective Investor in payment for Securities.
Purchasers in the Offering shall be “accredited investors” or “qualified
Institutions” as determined in accordance with Regulation D.

                    3. Closing/Release of Funds.

                              The closing (“Closing”) shall be held at such time
as the conditions as provided in the Securities Purchase Agreement have been
satisfied. References herein to the actual closing date thereof shall be
referred to as a “Closing Date.”

                    4. Representations and Warranties of the Selling Agent.

                              The Selling Agent represents and warrants to the
Company as follows:

                              (a) The Selling Agent is duly incorporated and
validly existing and in good standing under the laws of its State of
incorporation.

                              (b) The Selling Agent is, and at the time of each
Closing will be, a member in good standing of the FINRA.

                              (c) Offers and sales of Securities by the Selling
Agent will be made only in accordance with this Placement Agreement and in
compliance with the provisions of Regulation S and/or Regulation D (it being
understood and agreed that the Selling Agent shall be entitled to rely upon the
information and statements provided by the Prospective Investor in the Purchase
Agreement), and the Selling Agent will furnish to each investor a copy of the
Documents prior to accepting any subscription for the Securities.

                    5. Compensation.

                              (a) The Selling Agent shall be entitled, on each
Closing Date, as compensation for its services as Selling Agent under this
Agreement, to selling Commissions payable in cash equal to 10% of the gross
subscription proceeds received by the Company through subscriptions made by
investors introduced by GSS to the Company and through the exercise of the Class
B Warrants (based on the amount of gross proceeds received by the Company from
the Holders of the Class B Warrants upon

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exercise of the Class B Warrants).

                              (b) In addition to the compensation payable to the
Selling Agent set forth in clause (a) above, the Company shall grant the Selling
Agent (or its assigns or designees) warrants (“Selling Agent Warrants”) to
purchase a number of shares of Common Stock equal to (i) 20% of the shares of
Common Stock underlying the Convertible Debentures sold in the Offering and (ii)
20% of the number of shares of Common Stock issuable upon the exercise of the
Class B Warrants which shall be due and issuable after the exercise of such
Class B Warrants and shall be based on the number of shares of the Company’s
Common Stock issuable upon the Notes actually issued upon exercise of the Class
B Warrants including but not limited to the shares of Common Stock underlying
the Convertible Debentures from the exercise of the Class B Warrants, and the
Selling Agent Warrants shall have an exercise price equal to the exercise price
of the Warrants being issued to the investors. The Selling Agent Warrants shall
be exercisable for a period of five (5) years from the Final Closing Date and
the Selling Agent shall not be entitled to registration rights with respect to
the shares of Common Stock underlying the Selling Agent Warrants. The Selling
Agent Warrants shall allow for “cashless exercise”. The Selling Agent Warrants
may be issued up to 10 employees and/or affiliates of the Selling Agent in such
amounts as the Selling Agent shall notify in writing to the Company prior to the
Closing.

                    6. Representations and Warranties of the Company.

                    (a) The Company represents and warrants to, and agrees with,
the Selling Agent that:

                              (i) No Documents or information provided by the
Company to Prospective Investors, including, without limitation the SEC Reports
(as defined in the Purchase Agreement), shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein in light of circumstances made
therein not misleading.

                              (ii) The Company is, and at all times during the
period from the date hereof to and including each Closing Date will be, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, with full corporate power and authority, and has
obtained all necessary consents, authorizations, approvals, orders, licenses,
certificates, and permits and declarations of and from, and has made filings
with, all federal, state and local authorities, to own, lease, license, and use
its properties and assets and to conduct its business as presently conducted
and/or in any such case where the failure to have any of the foregoing would not
have a material adverse effect on the Company’s presently conducted business. As
of the date hereof, the Company is, and at all times during the period from the
date hereof to and including each Closing Date, duly qualified to do business
and is in good standing in every jurisdiction in which its ownership, leasing,
licensing, or use of property and assets or the conduct of its business makes
such qualification necessary except where the failure to be so qualified would
not have a material adverse effect on the Company’s business.

                              (iii) As of the date hereof, except as disclosed
in the Securities Purchase Agreement, there is no, and as of each Closing Date
there shall not be any, litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or to the Company’s
knowledge threatened, with respect to the Company, or its respective operations,
businesses, properties, or assets, except as properly described in the Purchase
Agreement or such as individually or in the aggregate do not now have and will
not in the future have a material adverse effect upon the operations, business,
properties, or assets of the Company.

                              (iv) The Company is not in violation or breach of,
or in default with respect to, any term of its Certificate of Incorporation or
By-Laws.

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                              (v) The Company has all requisite corporate power
and authority to execute, deliver, and perform this Agreement and to consummate
the transactions contemplated hereby. All necessary corporate proceedings of the
Company have been duly taken to authorize the execution, delivery, and
performance by the Company of this Agreement and the Purchase Agreement and the
consummation of the transactions contemplated hereby and thereby.

                              (vi) The Securities and the Selling Agent’s
Warrants, when issued and delivered to the Prospective Investor pursuant to the
terms of the Offering shall be duly authorized, validly issued, fully paid and
non-assessable, without any personal liability attaching to the ownership
thereof solely by being such holder and shall not have been issued in violation
of any preemptive rights of stockholders.

                              (vii) Neither the Company nor any of its officers,
directors, or affiliates, has engaged or will engage, directly or indirectly, in
any act or activity that may jeopardize the status of the offering and sale of
the Securities as an exempt transaction under Regulation D of the Securities Act
of 1933, as amended.

                    7. Covenants of the Company.

                              The Company covenants that it will:

                              (a) Deliver without charge to the Selling Agent
such number of copies of the Documents and any supplement or amendment thereto
as may reasonably be requested by the Selling Agent.

                              (b) Notify the Selling Agent promptly of the
acceptance or rejection of any subscription. The Company shall not (i) accept
subscriptions from, or make sales of Securities to, any Prospective Investors
who are not, to the Company’s knowledge, accredited investors, or (ii)
unreasonably reject any subscription for Securities.

                              (c) Cause, at its cost and expense, all “blue sky”
filings related to the Offering and required by applicable law to be made in due
and proper form and substance and in a timely manner as required under the laws
of the states in which Securities are sold (“Blue Sky Filings”). In addition,
the Company shall cause, at its cost and expense, a Form D related to the
Offering to be filed with the Securities Exchange Commission “SEC” in due and
proper form and substance in a timely manner. The Company shall deliver true and
correct copies of all Blue Sky Filings and the Form D, as filed with the SEC, to
the Selling Agent within 15 days after final Closing.

                    8. Conditions of Closing.

                              The obligations of the Selling Agent pursuant to
this Agreement shall be subject, in its discretion, to the continuing accuracy
of the representations and warranties of the Company contained herein and in
each certificate and document contemplated under this Agreement to be delivered
to the Selling Agent, as of the date hereof and as of each Closing Date, with
respect to the performance by the Company of its obligations hereunder, and to
the following conditions:

                              (a) At each Closing, the Selling Agent and the
Company shall have executed documents in form and substance reasonably
acceptable to them.

                              (b) All proceedings taken in connection with the
issuance, sale, and delivery of

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the Securities shall be satisfactory in form and substance to GSS and the
Company.

                    9. Termination.

                              This Agreement may be terminated by the Selling
Agent (i) at anytime in the event the Selling Agent has determined, in good
faith, that the Documents fail to contain a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) upon
three days written notice. The Company may not terminate this Agreement in the
absence of a material breach of any covenant, representation or warranty
contained in this Agreement made by the Selling Agent. Notwithstanding anything
to the contrary herein, this Agreement shall automatically terminate on August
31, 2009.

                    10. Indemnification and Contribution.

                              (a) The Company agrees to indemnify and hold
harmless the Selling Agent, its officers, directors, partners, employees,
agents, and counsel, and each person, if any, who controls the Selling Agent
within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), against any and all loss,
liability, claim, damage, and expense whatsoever (which shall include, for all
purposes of this Section 10, but not be limited to, attorneys’ fees and any and
all expense whatsoever incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation) as and when
incurred arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Documents, or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company as stated in Section 10(b)
with respect to the Selling Agent expressly for inclusion in the Documents or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Agreement. The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have, including
liabilities arising under this Agreement.

                              If any action is brought against the Selling Agent
or any of its officers, directors, partners, employees, agent, or counsel, or
any controlling persons of the Selling Agent (an “indemnified party”), in
respect of which indemnify may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify the
Company (the “indemnifying party”) in writing of the institution of such action
(but the failure so to notify shall not relieve the indemnifying party from any
liability it may have other than pursuant to this Section 10(a)) and the
indemnifying party shall promptly assume the defense of such action, including
the employment of counsel (reasonably satisfactory to such indemnified party or
parties) and payment of expenses. Such indemnified party shall have the right to
employ its own counsel in any such case, but the fees and expense of such
counsel shall be at the expense of such indemnified party unless the employment
of such counsel shall have been authorized in writing by the indemnifying party
in connection with the defense of such action or the indemnifying party shall
not have promptly employed counsel satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to one or more of the
indemnifying parties, in any of which events such reasonable fees and expenses
of one such counsel shall be borne by the indemnifying party and the
indemnifying party shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties. Anything in this paragraph to the
contrary notwithstanding, the indemnifying party shall not be liable for any
settlement of any such

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claim or action effected without its written consent. The Company agrees
promptly to notify the Selling Agent of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the sale of the Securities, the Documents, or any application.

                              (b) The Selling Agent agrees to indemnify and hold
harmless the Company, its officers, directors, employees, agents, and counsel,
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Selling Agent in Section
10(a), with respect to any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 10, but not be
limited to, attorneys’ fees and any and all expense whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with (i) statements or omissions, if any, made in the Documents in
reliance upon and in conformity with written information furnished to the
Company with respect to the Selling Agent expressly for inclusion in the
Documents, and (ii) or any breach of any representation, warranty, covenant or
agreement of the Selling Agent contained in this Agreement. If any action shall
be brought against the Company or any other person so indemnified based on the
Documents and in respect of which indemnity may be sought against the Selling
Agent pursuant to this Section, the Selling Agent shall have the rights and
duties given to the indemnifying party, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 10(a) hereof.

                              (c) To provide for just and equitable
contribution, if (i) an indemnified party makes a claim for indemnification
pursuant to Section 10(a) or 10(b) hereof but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act, or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
officer, director, employee, agent, or counsel of the Company, or any
controlling person of the Company), on the one hand, and the Selling Agent
(including for this purpose any contribution by or on behalf of an indemnified
party), on the other hand, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Selling Agent, on the other hand; provided,
however, that if applicable law does not permit such allocation, then other
relevant equitable considerations such as the relative fault of the Company and
the Selling Agent in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses shall also be considered. The
relative benefits received by the Company, on the one hand, and the Selling
Agent, on the other hand, shall be deemed to be in the same proportion as (x)
the total proceeds from the Offering (net of compensation payable to the
Placement Agent pursuant to Section 5(a) hereof but before deducting expenses)
received by the Company, and (y) the compensation received by the Selling Agent
pursuant to Section 5(a) hereof.

                              The relative fault, in the case of an untrue
statement, alleged untrue statement, omission, or alleged omission, shall be
determined by, among other things, whether such statement, alleged statement,
omission, or alleged omission relates to information supplied by the Company or
by the Selling Agent, and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company and the Selling Agent
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Selling Agent for contribution were determined by pro rata
or per capita allocation of the aggregate losses, liabilities, claims, damages,
and expenses or by any other method of allocation that

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does not reflect the equitable considerations referred to in this Section 10(c).
In no case shall the Selling Agent by responsible for a portion of the
contribution obligation in excess of the compensation received by it pursuant to
Section 5(a) hereof. No person guilty of a fraudulent misrepresentation shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 10(c), each person, if any, who
controls the Selling Agent within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partners,
employee, agent, and counsel of the Selling Agent, shall have the same rights to
contribution as the Selling Agent, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and each officer, director, employee, agent, and counsel of the
Company, shall have the same rights to contribution as the Company, subject in
each case to the provisions of this Section 10(c). Anything in this Section
10(c) to the contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without its
written consent.

                    11. Non-Solicitation.

                    The Company agrees that, for a period of 12 months from the
date hereof, it shall not solicit any offer to buy from or offer to sell to any
Prospective Investor set forth on Exhibit A attached hereto, directly or
indirectly, any securities of the Company or of any other entity, or provide the
name of any such person to any other securities broker or dealer or selling
agent. In the event that during the Non-Solicitation Period, the Company or any
of its affiliates, directly or indirectly, solicits, offers to buy from or
offers to sell to any such Prospective Investor set forth on Exhibit A any such
securities, or provides the name of any such person set forth on Exhibit A to
any other securities broker or dealer or selling agent, and such person
purchases such securities or purchases securities from any other securities
broker or dealer or selling agent, the Company shall pay to the Selling Agent an
amount equal to 10% of the aggregate purchase price of the securities so
purchased by such person and the Company shall grant the Selling Agent (or its
assigns) 5 year warrants to purchase a number of shares of Common Stock equal to
20% of the shares of Common Stock (or shares of Common Stock underlying any
convertible securities) sold, with an exercise price equal to the price of the
securities sold to the Prospective Investor set forth on Exhibit A. Upon receipt
of written request by the Selling Agent, the Company shall promptly deliver to
the Selling Agent the names of any investors in any offering that the Company
completes within 12 months from the date hereof. However, the compensation
entitled to GSS pursuant to the exercise of the Class B Warrants shall be valid
throughout the term of the Class B Warrant. This section shall survive any
termination.

                    12. Representations and Agreements to Survive Delivery.

                    All representations, warranties, covenants, and agreements
contained in this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Closing Date and, such representations,
warranties, covenants, and agreements, including the indemnification and
contribution agreements contained in Section 10, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Selling Agent or any indemnified person, or by or on behalf of the Company
or any person or entity which is entitled to be indemnified under Section 10(b),
and shall survive termination of this Agreement or the issuance, sale, and
delivery of the Securities. In addition, notwithstanding any election hereunder
or any termination of this Agreement, and whether or not the terms of this
Agreement are otherwise carried out, the provisions of Sections 5 and 10 shall
survive termination of this Agreement and shall not be affected in any way by
such election or termination or failure to carry out the terms of this Agreement
or any part thereof.

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                    13. Notices.

                    All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and shall be either (i) mailed
by first class mail in which case delivery shall be deemed to be made three days
following deposit in the United States mail; or (ii) sent by overnight courier
service in case delivery shall be deemed to be made upon receipt, to the Selling
Agent: Garden State Securities, Inc., Parkway 109 Office Center, 328 Newman
Springs Road, Red Bank, New Jersey 07701 Attention: Ernest Pellegrino; to the
Company: Conolog Corporation 5 Columbia Road, Somerville, New Jersey 07701,
Attention Robert Benou, with a copy to Sichenzia Ross Friedman Ference LLP, 61
Broadway, New York, New York 10006, Attention: David B. Manno, Esq.
____________________________________________________.

                    14. Parties.

                    This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Selling Agent and the Company and the persons and
entities referred to in Section 10 who are entitled to indemnification or
contribution, and their respective successors, legal representatives, and
assigns (which shall not include any purchaser, as such, of Securities), and no
other person shall have or be construed to have any legal or equitable right
remedy, or claim under or in respect of or by virtue of this Agreement or any
provision herein contained.

                    15. Construction.

                    This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to conflict of laws.

                    16. Counterparts.

                    This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement.

                    If the foregoing correctly sets forth the understanding
between us, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.

 

 

 

 

Very truly yours,

 

 

 

 

Conolog Corporation.

 

 

 

 

By: 

-s- Robert S. Benou [c63369004_v4.jpg]

 

 

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Name: Robert S. Benou

 

  Title: Chief Executive Officer

 

 

 

Accepted as of the date

 

 

first above written:

 

 

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Garden State Securities, Inc.

 

 

 

 

By: 

-s- Ernest Pellegrino [c63369010_v4.jpg]

 

 

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Title:

Ernest Pellegrino

 

 

Director of Corporate Finance

 

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EXHBIT A TO THE SELLING AGENT AGREEMENT BETWEEN CONOLOG CORPORATION
AND GARDEN STATE SCURITIES, INC. DATED JULY ___, 2009

 

 

 

 

1.

LH Financial/Alpha Capital/Osher Capital

 

2.

Whalehaven Capital

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