Exhibit 4.5

                               CONOLOG CORPORATION
                               SECURITY AGREEMENT

To:   Laurus Master Fund, Ltd.
      c/o Onshore Corporate Services, Ltd.
      P.O. Box 1234 G.T
      Queensgate House
      South Church Street
      Grand Cayman, Cayman Islands

Gentlemen:

      1. To secure the payment of all  Obligations  (as hereafter  defined),  we
hereby  grant to you a  continuing  security  interest  in all of the  following
property now owned or at any time  hereafter  acquired by us, or in which we now
have or at any time in the future may acquire any right,  title or interest (the
"Collateral"): all accounts, inventory, equipment, goods, documents, instruments
(including,  without  limitation,  promissory notes),  contract rights,  general
intangibles (including,  without limitation, payment intangibles and an absolute
right to license on terms no less  favorable  than those current in effect among
our affiliates,  but not own intellectual  property),  chattel paper, supporting
obligations,   investment  property,  letter-of-credit  rights,  trademarks  and
tradestyles  in which we now have or hereafter  may acquire any right,  title or
interest,  all proceeds and products  thereof  (including,  without  limitation,
proceeds of insurance) and all additions,  accessions and substitutions  thereto
or therefore.  In the event we wish to finance the  acquisition of any hereafter
acquired  equipment  and have obtained a commitment  from a financing  source to
finance such equipment from an unrelated third party,  you agree to release your
security interest on such hereafter acquired equipment so financed by such third
party financing source.

      2. The term "Obligations" as used herein shall mean and include all debts,
liabilities  and  obligations  owing by us to you  hereunder  and under  whether
arising under,  out of, or in connection with that certain  Securities  Purchase
Agreement  dated as of the date hereof by and between the undersigned and Laurus
Master Fund, Ltd. ("Laurus") (the "Securities Purchase Agreement"), that certain
Secured  Convertible Note dated as of the date hereof made by in favor of Laurus
(the "Term Note") that certain  Registration  Rights  Agreement  dated as of the
date hereof by and between the  undersigned  and Laurus in  connection  with the
Term Note (the  "Term  Note  Registration  Rights  Agreement")  (the  Securities
Purchase  Agreement,  the  Term  Note  and the  Term  Note  Registration  Rights
Agreement as each may be amended,  modified,  restated or supplemented from time
to time, are collectively referred to herein as the "Documents").

      3. We hereby represent, warrant and covenant to you that:

            (a) we are a company validly  existing,  in good standing and formed
      under the laws of the State of  Delaware  and we will  provide  you thirty
      (30) days' prior written notice of any change in our state of formation;

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            (b) our  legal  name is  Conolog  Corporation,  as set  forth in our
      Certificate of Incorporation as amended through the date hereof;

            (c) we are the  lawful  owner  of the  Collateral  and have the sole
      right to grant a security  interest therein and will defend the Collateral
      against all claims and demands of all persons and entities;

            (d) we will keep the Collateral  free and clear of all  attachments,
      levies,  taxes,  liens,  security interests and encumbrances of every kind
      and  nature  ("Encumbrances"),   other  than  Permitted  Encumbrances  (as
      hereinafter  defined),  except to the  extent  said  Encumbrance  does not
      secure  indebtedness in excess of $50,000 and such  Encumbrance is removed
      or otherwise released within ten (10) days of the creation thereof;

            (e) we will at our own cost and expense keep the  Collateral in good
      state of repair  (ordinary  wear and tear  excepted) and will not waste or
      destroy the same or any part thereof other than ordinary course discarding
      of items no longer used or useful in our business;

            (f) we will not without your prior written consent,  sell, exchange,
      lease or otherwise  dispose of the Collateral,  whether by sale,  lease or
      otherwise,  except for the sale of  inventory  in the  ordinary  course of
      business and for the  disposition  or transfer in the  ordinary  course of
      business  during any fiscal year of obsolete  and  worn-out  equipment  or
      equipment no longer  necessary for our ongoing needs,  having an aggregate
      fair market value of not more than $25,000 and only to the extent that:

                  (i) the proceeds of any such  disposition  are used to acquire
            replacement  Collateral  which is  subject  to your  first  priority
            security interest or are used to repay Obligations or to pay general
            corporate expenses; or

                  (ii)  following  the  occurrence  of an Event of Default which
            continues  to exist the  proceeds of which are remitted to you to be
            held as cash collateral for the Obligations;

            (g) we will insure the Collateral  jointly in our names against loss
      or damage by fire, theft,  burglary,  pilferage,  loss in transit and such
      other  hazards  as you shall  specify  in amounts  and under  policies  by
      insurers  acceptable  to you and all premiums  thereon shall be paid by us
      and the  policies  delivered  to you. If we fail to do so, you may procure
      such insurance and the cost thereof shall constitute Obligations;

            (h)  we   will  at  all   reasonable   times   allow   you  or  your
      representatives  free  access  to  and  the  right  of  inspection  of the
      Collateral;

            (i) we hereby indemnify and save you harmless from all loss,  costs,
      damage,  liability and/or expense,  including reasonable  attorneys' fees,
      that  you  may  sustain  or  incur  to  enforce  payment,  performance  or
      fulfillment of any of the  Obligations  and/or in the  enforcement of this
      Agreement  or in the  prosecution  or defense of any action or  proceeding
      either  against  you or us  concerning  any  matter  growing  out of or in
      connection with this Agreement,  and/or any of the

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      Obligations  and/or any of the  Collateral  except to the extent caused by
      your own gross negligence or willful misconduct.

      4. We shall be in default under this  Agreement  upon the happening of any
of the following events or conditions, each such event or condition an "Event of
Default:"

            (a) we shall fail to pay when due or  punctually  perform any of the
      Obligations and such failure shall continue for a period of three (3) days
      following any failure to make payment, or for a period of thirty (30) days
      following default for any other such failure;

            (b) any  covenant,  warranty,  representation  or statement  made or
      furnished to you by us or on our behalf was false in any material  respect
      when made or furnished;

            (c)  the  loss,  theft,  substantial  damage,  destruction,  sale or
      encumbrance  to or of any of the  Collateral  or the  making  of any levy,
      seizure or attachment thereof or thereon except to the extent:

                  (i) such loss is covered by insurance  proceeds which are used
            to replace the item or repay us; or

                  (ii)  said  levy,   seizure  or  attachment  does  not  secure
            indebtedness  in  excess  of  $50,000  and  such  levy,  seizure  or
            attachment  has not been  removed or otherwise  released  within ten
            (10) days of the creation or the assertion thereof;

            (d) we shall become insolvent, cease operations, dissolve, terminate
      our business  existence,  make an assignment for the benefit of creditors,
      suffer the appointment of a receiver,  trustee, liquidator or custodian of
      all or any part of our property;

            (e) any proceedings  under any bankruptcy or insolvency law shall be
      commenced  by or  against  us and if  commenced  against  us shall  not be
      dismissed within thirty (30) days;

            (f) we shall repudiate,  purport to revoke or fail to perform any of
      our  obligations  under the Note (after passage of applicable cure period,
      if any); or

            (g) an Event of Default shall have occurred  under and as defined in
      the Note.

      5. Upon the occurrence of any Event of Default and at any time thereafter,
you may declare all  Obligations  immediately due and payable and you shall have
the remedies of a secured party  provided in the Uniform  Commercial  Code as in
effect in the State of New York,  this Agreement and other  applicable law. Upon
the occurrence of any Event of Default and at any time thereafter, you will have
the right to take  possession of the Collateral and to maintain such  possession
on our  premises or to remove the  Collateral  or any part thereof to such other
premises as you may desire.  Upon your request, we shall assemble the Collateral
and make it available to you at a place  designated by you. If any  notification
of intended disposition of any Collateral is required by law, such notification,
if mailed,  shall be deemed properly and

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reasonably  given if  mailed at least ten (10)  days  before  such  disposition,
postage  prepaid,  addressed to us either at our address  shown herein or at any
address appearing on your records for us. Any proceeds of any disposition of any
of the  Collateral  shall be applied by you to the  payment of all  expenses  in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other  legal  expenses  and  disbursements  and the  reasonable  expense  of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such  proceeds  may be applied by you toward the payment of the  Obligations  in
such  order of  application  as you may  elect,  and we shall be liable  for any
deficiency.

      6. If we default in the  performance  or  fulfillment of any of the terms,
conditions,  promises,  covenants,  provisions  or  warranties on our part to be
performed or  fulfilled  under or pursuant to this  Agreement,  you may, at your
option  without  waiving your right to enforce this  Agreement  according to its
terms,  immediately or at any time  thereafter and without notice to us, perform
or fulfill the same or cause the  performance or fulfillment of the same for our
account  and at our sole  cost and  expense,  and the cost and  expense  thereof
(including  reasonable  attorneys'  fees) shall be added to the  Obligations and
shall be payable on demand with interest  thereon at the highest rate  permitted
by law or, at your option, debited by you from the Pledged Account.

      7. We appoint you, any of your officers,  employees or any other person or
entity  whom you may  designate  as our  attorney,  with power to  execute  such
documents in our behalf and to supply any omitted information and correct patent
errors in any  documents  executed  by us or on our  behalf;  to file  financing
statements  against  us  covering  the  Collateral;  to sign our name on  public
records;  and to do all  other  things  you deem  necessary  to  carry  out this
Agreement. We hereby ratify and approve all acts of the attorney and neither you
nor the attorney will be liable for any acts of commission or omission,  nor for
any error of judgment or mistake of fact or law other than gross  negligence  or
willful misconduct. This power being coupled with an interest, is irrevocable so
long as any Obligations remains unpaid.

      8. No delay or failure on your part in exercising any right,  privilege or
option  hereunder  shall  operate  as a waiver  of such or of any  other  right,
privilege,  remedy or option,  and no waiver  whatever  shall be valid unless in
writing,  signed by you and then only to the extent  therein  set forth,  and no
waiver by you of any default  shall  operate as a waiver of any other default or
of the same  default on a future  occasion.  Your books and  records  containing
entries with respect to the  Obligations  shall be admissible in evidence in any
action or proceeding,  shall be binding upon us for the purpose of  establishing
the items therein set forth and shall constitute prima facie proof thereof.  You
shall have the right to enforce  any one or more of the  remedies  available  to
you,  successively,  alternately or  concurrently.  We agree to join with you in
executing  financing  statements or other  instruments to the extent required by
the Uniform  Commercial  Code in form  satisfactory to you and in executing such
other documents or instruments as may be required or deemed necessary by you for
purposes of affecting or continuing your security interest in the Collateral.

      9. This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York and cannot be  terminated  orally.  All of the
rights, remedies, options, privileges and elections given to you hereunder shall
inure to the benefit of your  successors  and assigns.  The term "you" as herein
used  shall  include  your  company,  any  parent of your

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company,  any of your  subsidiaries  and  any  co-subsidiaries  of your  parent,
whether now  existing or hereafter  created or  acquired,  and all of the terms,
conditions,  promises,  covenants,  provisions  and warranties of this Agreement
shall inure to the benefit of and shall bind the representatives, successors and
assigns of each of us and them. You and we hereby (a) waive any and all right to
trial by jury in  litigation  relating to this  Agreement  and the  transactions
contemplated  hereby  and we  agree  not to  assert  any  counterclaim  in  such
litigation,  (b) submit to the  nonexclusive  jurisdiction of any New York State
court  sitting in the borough of  Manhattan,  the city of New York and (c) waive
any  objection  you or we may have as to the  bringing  or  maintaining  of such
action with any such court.

      10. All notices  from you to us shall be  sufficiently  given if mailed or
delivered to us at our address set forth below.

                                           Very truly yours,

                                           CONOLOG CORPORATION

                                           By:      ____________________________

                                           Name:    ____________________________

ACKNOWLEDGED:                              Title:   ____________________________

LAURUS MASTER FUND, LTD.                   Address:

By:         __________________________________________

Name:       __________________________________________

Title:      __________________________________________


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