Document:

Exhibit 4.2

                          REGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into as of April 26,  2004,  by and  between  Conolog  Corporation,  a  Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").

      This  Agreement is made  pursuant to the  Securities  Purchase  Agreement,
dated as of the date hereof,  by and between the  Purchaser and the Company (the
"Securities  Purchase  Agreement"),  and  pursuant to the Note and the  Warrants
referred to therein.

      The Company and the Purchaser hereby agree as follows:

      1.  Definitions.  Capitalized  terms used and not otherwise defined herein
that are defined in the Securities  Purchase  Agreement  shall have the meanings
given  such  terms  in the  Securities  Purchase  Agreement.  As  used  in  this
Agreement, the following terms shall have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means shares of the Company's common stock, par value
$0.01 per share.

            "Effectiveness Date" means the 120th day following the date hereof.

            "Effectiveness  Period"  shall have the meaning set forth in Section
2(a).

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
amended, and any successor statute.

            "Filing  Date"  means,  with respect to the  Registration  Statement
required to be filed  hereunder,  a date no later than sixty (60) days following
the date upon  which the  principal  amount of the Term Loan to the  Company  in
original principal amount of $1,200,000 has been funded to the Company.

            "Holder" or "Holders"  means the Purchaser or any of its  affiliates
or transferees to the extent any of them hold Registrable Securities.

            "Indemnified  Party"  shall  have the  meaning  set forth in Section
5(c).

            "Indemnifying  Party"  shall have the  meaning  set forth in Section
5(c).

<PAGE>

            "Note"  has  the  meaning  set  forth  in  the  Securities  Purchase
Agreement.

            "Proceeding"  means  an  action,   claim,  suit,   investigation  or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

            "Prospectus"  means  the  prospectus  included  in the  Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

            "Registrable  Securities"  means the shares of Common  Stock  issued
upon the conversion of the Note and issuable upon exercise of the Warrants.

            "Registration  Statement" means each registration statement required
to be filed hereunder,  including the Prospectus,  amendments and supplements to
such  registration  statement or Prospectus,  including pre- and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

            "Rule 144" means Rule 144 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "Rule 415" means Rule 415 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "Rule 424" means Rule 424 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

<PAGE>

            "Securities  Act" means the Securities Act of 1933, as amended,  and
any successor statute.

            "Securities  Purchase  Agreement"  means the  agreement  between the
parties  hereto  calling  for  the  issuance  by  the  Company  of a  $1,200,000
convertible Note and Warrants.

            "Trading  Market" means any of the NASD OTC Bulletin  Board,  NASDAQ
SmallCap Market,  the Nasdaq National Market, the American Stock Exchange or the
New York Stock Exchange.

            "Warrants" means the Common Stock purchase  warrants issued pursuant
to the Securities Purchase Agreement.

      2. Registration.

            (a) On or prior to the Filing  Date the  Company  shall  prepare and
      file with the Commission a Registration Statement covering the Registrable
      Securities  for an offering to be made on a continuous  basis  pursuant to
      Rule 415.  The  Registration  Statement  shall be on Form SB-2 or Form S-3
      (except if the Company is not then  eligible  to  register  for resale the
      Registrable  Securities  on Form  SB-2 or Form  S-3,  in which  case  such
      registration shall be on another appropriate form in accordance herewith).
      The Company shall cause the Registration Statement to become effective and
      remain effective as provided herein.  The Company shall use its reasonable
      commercial  efforts to cause the  Registration  Statement  to be  declared
      effective  under the  Securities  Act as promptly  as  possible  after the
      filing thereof, but in any event no later than the Effectiveness Date. The
      Company  shall  use  its  reasonable   commercial   efforts  to  keep  the
      Registration  Statement  continuously  effective  under the Securities Act
      until  the date  which  is the  earlier  date of when (i) all  Registrable
      Securities have been sold or (ii) all  Registrable  Securities may be sold
      immediately  without  registration  under the  Securities  Act and without
      volume restrictions  pursuant to Rule 144(k), as determined by the counsel
      to the  Company  pursuant  to a written  opinion  letter  to such  effect,
      addressed and acceptable to the Company's  transfer agent and the affected
      Holders (the "Effectiveness Period").

            (b) If: (i) the  Registration  Statement is not filed on or prior to
      the Filing Date; (ii) the Registration Statement is not declared effective
      by the Commission by the Effectiveness  Date; (iii) after the Registration
      Statement is

<PAGE>

      filed with and declared  effective  by the  Commission,  the  Registration
      Statement  ceases to be effective  (by  suspension or otherwise) as to all
      Registrable Securities to which it is required to relate at any time prior
      to the expiration of the  Effectiveness  Period  (without being  succeeded
      immediately  by an additional  registration  statement  filed and declared
      effective)  for a  period  of  time  which  shall  exceed  30  days in the
      aggregate per year or more than 20 consecutive calendar days (defined as a
      period of 365 days  commencing on the date the  Registration  Statement is
      declared effective);  or (iv) the Common Stock is not listed or quoted, or
      is suspended  from trading on any Trading Market for a period of three (3)
      consecutive Trading Days (provided the Company shall not have been able to
      cure such trading  suspension within 30 days of the notice thereof or list
      the Common Stock on another Trading  Market);  (any such failure or breach
      being  referred to as an "Event,"  and for  purposes of clause (i) or (ii)
      the date on which such Event  occurs,  or for purposes of clause (iii) the
      date which such 30 day or 20  consecutive  day period (as the case may be)
      is  exceeded,  or for purposes of clause (iv) the date on which such three
      (3) Trading Day period is exceeded,  being  referred to as "Event  Date"),
      then until the  applicable  Event is cured,  the Company shall pay to each
      Holder an amount in cash,  as  liquidated  damages  and not as a  penalty,
      equal to 1.0% for  each  thirty  (30) day  period  (prorated  for  partial
      periods) on a daily basis of the  original  principal  amount of the Note.
      While such Event continues, such liquidated damages shall be paid not less
      often than each thirty (30) days. Any unpaid liquidated  damages as of the
      date  when an Event has been  cured by the  Company  shall be paid  within
      three (3) days  following  the date on which  such Event has been cured by
      the Company.

            (c)  Within  three  business  days of the  Effectiveness  Date,  the
      Company  shall  cause its  counsel to issue a blanket  opinion in the form
      attached  hereto as  Exhibit A, to the  transfer  agent  stating  that the
      shares  are  subject to an  effective  registration  statement  and can be
      reissued  free of  restrictive  legend upon notice of a sale by Laurus and
      confirmation  by Laurus that it has complied with the prospectus  delivery
      requirements, provided that the Company has not advised the transfer agent
      orally or in writing  that the opinion has been  withdrawn.  Copies of the
      blanket opinion required by this Section 2(c) shall be delivered to Laurus
      within the time frame set forth above.

      3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:

<PAGE>

            (a) prepare and file with the Commission the Registration  Statement
      with  respect  to such  Registrable  Securities,  respond as  promptly  as
      possible to any comments  received from the  Commission,  and use its best
      efforts to cause the Registration Statement to become and remain effective
      for the Effectiveness Period with respect thereto, and promptly provide to
      the  Purchaser  copies of all  filings and  Commission  letters of comment
      relating thereto;

            (b)  prepare  and  file  with the  Commission  such  amendments  and
      supplements  to the  Registration  Statement  and the  Prospectus  used in
      connection  therewith as may be necessary to comply with the provisions of
      the  Securities  Act with respect to the  disposition  of all  Registrable
      Securities  covered  by  the  Registration  Statement  and  to  keep  such
      Registration Statement effective until the expiration of the Effectiveness
      Period;

            (c)  furnish  to  the  Purchaser   such  number  of  copies  of  the
      Registration Statement and the Prospectus included therein (including each
      preliminary  Prospectus)  as  the  Purchaser  reasonably  may  request  to
      facilitate the public sale or disposition  of the  Registrable  Securities
      covered by the Registration Statement;

            (d) use its commercially  reasonable  efforts to register or qualify
      the  Purchaser's   Registrable  Securities  covered  by  the  Registration
      Statement  under the  securities or "blue sky" laws of such  jurisdictions
      within  the  United  States  as  the  Purchaser  may  reasonably  request,
      provided,  however,  that the  Company  shall not for any such  purpose be
      required  to  qualify   generally  to  transact   business  as  a  foreign
      corporation in any jurisdiction where it is not so qualified or to consent
      to general service of process in any such jurisdiction;

            (e) list the  Registrable  Securities  covered  by the  Registration
      Statement  with any  securities  exchange on which the Common Stock of the
      Company is then listed;

            (f)  immediately  notify the Purchaser at any time when a Prospectus
      relating  thereto is required to be delivered under the Securities Act, of
      the  happening of any event of which the Company has knowledge as a result
      of which the Prospectus contained in such Registration  Statement, as then
      in effect,  includes an untrue  statement  of a material  fact or omits to
      state a material fact  required to be stated  therein or necessary to make
      the statements  therein not misleading in light of the circumstances  then
      existing; and

<PAGE>

            (g) make available for inspection by the Purchaser and any attorney,
      accountant  or  other  agent  retained  by  the  Purchaser,  all  publicly
      available,   non-confidential   financial  and  other  records,  pertinent
      corporate documents and properties of the Company, and cause the Company's
      officers,  directors  and  employees  to supply  all  publicly  available,
      non-confidential   information   reasonably  requested  by  the  attorney,
      accountant or agent of the Purchaser.

      4.  Registration   Expenses.   All  expenses  relating  to  the  Company's
compliance  with Sections 2 and 3 hereof,  including,  without  limitation,  all
registration  and filing fees,  printing  expenses,  fees and  disbursements  of
counsel and independent  public  accountants for the Company,  fees and expenses
(including  reasonable  counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD,  transfer taxes,  fees of
transfer  agents and  registrars,  fees of, and  disbursements  incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure to meet any of its  obligations  hereunder),  are  called  "Registration
Expenses".  All  selling  commissions  applicable  to the  sale  of  Registrable
Securities,  including any fees and  disbursements of any special counsel to the
Holders  beyond those included in  Registration  Expenses,  are called  "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.

      5. Indemnification.

            (a) In the event of a  registration  of any  Registrable  Securities
      under the  Securities  Act  pursuant to this  Agreement,  the Company will
      indemnify and hold harmless the Purchaser, and its officers, directors and
      each other person,  if any, who controls the Purchaser  within the meaning
      of the Securities Act, against any losses, claims, damages or liabilities,
      joint or  several,  to which the  Purchaser,  or such  persons  may become
      subject under the  Securities  Act or  otherwise,  insofar as such losses,
      claims,  damages or liabilities (or actions in respect  thereof) arise out
      of or are based upon any untrue  statement or alleged untrue  statement of
      any material fact contained in any Registration Statement under which such
      Registrable  Securities were registered  under the Securities Act pursuant
      to  this  Agreement,   any  preliminary  Prospectus  or  final  Prospectus
      contained therein, or any amendment or supplement thereof, or arise out of
      or are based upon the  omission  or alleged  omission  to state  therein a
      material  fact  required  to be stated  therein or  necessary  to make the
      statements therein not misleading,  and will reimburse the Purchaser,  and
      each such person for any reasonable  legal or other  expenses  incurred by
      them in connection with  investigating or defending any such loss,  claim,
      damage, liability or action;

<PAGE>

      provided, however, that the Company will not be liable in any such case if
      and to the extent that any such loss,  claim,  damage or liability  arises
      out of or is based upon an untrue statement or alleged untrue statement or
      omission  or  alleged  omission  so made in  conformity  with  information
      furnished  by or on behalf of the  Purchaser or any such person in writing
      specifically for use in any such document.

            (b) In the event of a  registration  of the  Registrable  Securities
      under the  Securities Act pursuant to this  Agreement,  the Purchaser will
      indemnify and hold harmless the Company,  and its officers,  directors and
      each other person,  if any, who controls the Company within the meaning of
      the Securities Act,  against all losses,  claims,  damages or liabilities,
      joint or several,  to which the Company or such persons may become subject
      under the  Securities  Act or otherwise,  insofar as such losses,  claims,
      damages or liabilities (or actions in respect thereof) arise out of or are
      based  upon any  untrue  statement  or  alleged  untrue  statement  of any
      material  fact which was  furnished  in writing  by the  Purchaser  to the
      Company  expressly for use in (and such  information  is contained in) the
      Registration  Statement  under  which  such  Registrable  Securities  were
      registered  under the  Securities  Act  pursuant  to this  Agreement,  any
      preliminary  Prospectus  or final  Prospectus  contained  therein,  or any
      amendment  or  supplement  thereof,  or arise out of or are based upon the
      omission or alleged  omission to state therein a material fact required to
      be  stated  therein  or  necessary  to make  the  statements  therein  not
      misleading,  and will  reimburse  the Company and each such person for any
      reasonable  legal or other  expenses  incurred by them in connection  with
      investigating  or defending  any such loss,  claim,  damage,  liability or
      action,  provided,  however, that the Purchaser will be liable in any such
      case if and only to the  extent  that  any such  loss,  claim,  damage  or
      liability  arises out of or is based upon an untrue  statement  or alleged
      untrue  statement  or omission or alleged  omission so made in  conformity
      with  information  furnished  in writing to the Company by or on behalf of
      the Purchaser  specifically for use in any such document.  Notwithstanding
      the provisions of this  paragraph,  the Purchaser shall not be required to
      indemnify  any person or entity in excess of the  amount of the  aggregate
      net  proceeds   received  by  the  Purchaser  in  respect  of  Registrable
      Securities in connection with any such  registration  under the Securities
      Act.

            (c)   Promptly   after   receipt  by  a  party   entitled  to  claim
      indemnification  hereunder  (an  "Indemnified  Party")  of  notice  of the
      commencement of any action,  such Indemnified  Party shall, if a claim for

<PAGE>

      indemnification  in respect  thereof is to be made  against a party hereto
      obligated to indemnify such Indemnified Party (an  "Indemnifying  Party"),
      notify the Indemnifying  Party in writing thereof,  but the omission so to
      notify the  Indemnifying  Party  shall not  relieve it from any  liability
      which it may have to such Indemnified  Party other than under this Section
      5(c) and shall  only  relieve it from any  liability  which it may have to
      such  Indemnified  Party under this  Section 5(c) if and to the extent the
      Indemnifying Party is prejudiced by such omission. In case any such action
      shall be brought  against any  Indemnified  Party and it shall  notify the
      Indemnifying  Party of the commencement  thereof,  the Indemnifying  Party
      shall be entitled to  participate  in and, to the extent it shall wish, to
      assume and undertake the defense thereof with counsel satisfactory to such
      Indemnified  Party, and, after notice from the Indemnifying  Party to such
      Indemnified  Party of its election so to assume and  undertake the defense
      thereof,  the  Indemnifying  Party shall not be liable to such Indemnified
      Party under this Section 5(c) for any legal expenses subsequently incurred
      by such Indemnified  Party in connection with the defense thereof;  if the
      Indemnified  Party  retains its own counsel,  then the  Indemnified  Party
      shall pay all fees, costs and expenses of such counsel, provided, however,
      that, if the  defendants in any such action  include both the  indemnified
      party and the  Indemnifying  Party and the  Indemnified  Party  shall have
      reasonably concluded that there may be reasonable defenses available to it
      which  are  different  from  or  additional  to  those  available  to  the
      Indemnifying Party or if the interests of the Indemnified Party reasonably
      may be deemed to conflict  with the interests of the  Indemnifying  Party,
      the Indemnified  Party shall have the right to select one separate counsel
      and to assume such legal  defenses  and  otherwise to  participate  in the
      defense of such  action,  with the  reasonable  expenses  and fees of such
      separate  counsel and other expenses  related to such  participation to be
      reimbursed by the Indemnifying Party as incurred.

            (d) In order to provide for just and equitable  contribution  in the
      event of joint  liability  under the  Securities  Act in any case in which
      either (i) the Purchaser,  or any officer,  director or controlling person
      of the  Purchaser,  makes a claim  for  indemnification  pursuant  to this
      Section  5 but it is  judicially  determined  (by  the  entry  of a  final
      judgment or decree by a court of competent jurisdiction and the expiration
      of time to appeal or the  denial of the last  right of  appeal)  that such
      indemnification may not be enforced in such case  notwithstanding the fact
      that this Section 5 provides  for  indemnification  in such case,  or (ii)
      contribution  under the  Securities Act may be required on the part of the
      Purchaser or such officer, director or controlling person of the Purchaser
      in

<PAGE>

      circumstances for which  indemnification is provided under this Section 5;
      then, and in each such case, the Company and the Purchaser will contribute
      to the aggregate losses,  claims, damages or liabilities to which they may
      be subject (after contribution from others) in such proportion so that the
      Purchaser  is  responsible  only  for  the  portion   represented  by  the
      percentage that the public offering price of its securities offered by the
      Registration   Statement  bears  to  the  public  offering  price  of  all
      securities  offered by such  Registration  Statement,  provided,  however,
      that,  in any  such  case,  (A) the  Purchaser  will  not be  required  to
      contribute  any amount in excess of the public  offering price of all such
      securities offered by it pursuant to such Registration Statement;  and (B)
      no person or entity  guilty of  fraudulent  misrepresentation  (within the
      meaning of Section 10(f) of the Act) will be entitled to contribution from
      any   person  or   entity   who  was  not   guilty   of  such   fraudulent
      misrepresentation.

      6. Representations and Warranties.

            (a) The  Common  Stock of the  Company  is  registered  pursuant  to
      Section  12(b) or 12(g) of the  Exchange  Act and,  except with respect to
      certain  matters  which the  Company has  disclosed  to the  Purchaser  on
      Schedule 4.21 to the Securities Purchase Agreement, the Company has timely
      filed all proxy  statements,  reports,  schedules,  forms,  statements and
      other  documents  required to be filed by it under the  Exchange  Act. The
      Company  has filed (i) its Annual  Report on Form 10-K for the fiscal year
      ended December 31, 2002 and (ii) its Quarterly Report on Form 10-Q for the
      fiscal quarters ended March 31, 2004 and June 30, 2004 (collectively,  the
      "SEC  Reports").  Each  SEC  Report  was,  at the time of its  filing,  in
      substantial  compliance  with the  requirements of its respective form and
      none of the SEC  Reports,  nor the  financial  statements  (and the  notes
      thereto) included in the SEC Reports, as of their respective filing dates,
      contained  any untrue  statement of a material  fact or omitted to state a
      material  fact  required  to be stated  therein or  necessary  to make the
      statements  therein,  in light of the circumstances  under which they were
      made, not misleading.  The financial statements of the Company included in
      the SEC Reports comply as to form in all material respects with applicable
      accounting  requirements  and the published  rules and  regulations of the
      Commission or other applicable rules and regulations with respect thereto.
      Such financial  statements have been prepared in accordance with generally
      accepted  accounting  principles  ("GAAP")  applied on a consistent  basis
      during the periods involved  (except (i) as may be otherwise  indicated in
      such  financial  statements  or the notes  thereto  or (ii) in the case of
      unaudited interim

<PAGE>

      statements,  to the  extent  they  may  not  include  footnotes  or may be
      condensed)  and fairly  present in all  material  respects  the  financial
      condition, the results of operations and the cash flows of the Company and
      its  subsidiaries,  on a consolidated  basis,  as of, and for, the periods
      presented in each such SEC Report.

            (b) The Common  Stock is listed for  trading on the Nasdaq  SmallCap
      Market and, as of the date  hereof,  satisfies  all  requirements  for the
      continuation of such listing. The Company has not received any notice that
      its Common Stock will be delisted from the Nasdaq  SmallCap Market (except
      for prior  notices as to which the  Company,  as of the date  hereof,  has
      previously  satisfied  all demands of the Nasdaq  Smallcap,  ) or that the
      Common Stock does not currently meet all requirements for the continuation
      of such listing.

            (c) Neither the Company,  nor any of its affiliates,  nor any person
      acting on its or their behalf,  has directly or indirectly made any offers
      or sales of any security or solicited any offers to buy any security under
      circumstances that would cause the offering of the Securities  pursuant to
      the Securities Purchase Agreement to be integrated with prior offerings by
      the Company for  purposes of the  Securities  Act which would  prevent the
      Company  from  selling  the Common  Stock  pursuant  to Rule 506 under the
      Securities Act, or any applicable  exchange-related  stockholder  approval
      provisions,  nor will the Company or any of its affiliates or subsidiaries
      take any action or steps that would cause the  offering of the  Securities
      to be integrated with other offerings.

            (d) The Warrants,  the Note and the shares of Common Stock which the
      Purchaser  may  acquire  pursuant  to the  Warrants  and the  Note are all
      restricted  securities  under  the  Securities  Act as of the date of this
      Agreement.  The Company  will not issue any stop  transfer  order or other
      order impeding the sale and delivery of any of the Registrable  Securities
      at such time as such Registrable Securities are registered for public sale
      or an exemption  from  registration  is  available,  except as required by
      federal or state securities laws.

            (e) The Company understands the nature of the Registrable Securities
      issuable  upon the  conversion of the Note and the exercise of the Warrant
      and recognizes that the issuance of such Registrable Securities may have a
      potential dilutive effect. The Company specifically  acknowledges that its
      obligation to issue the Registrable Securities is binding upon the Company

<PAGE>

      and  enforceable  regardless of the dilution such issuance may have on the
      ownership interests of other shareholders of the Company.

            (f) Except for agreements  made in the ordinary  course of business,
      there is no agreement  that has not been filed with the  Commission  as an
      exhibit to a  registration  statement or to a form required to be filed by
      the Company under the Exchange  Act, the breach of which could  reasonably
      be expected to have a material  and adverse  effect on the Company and its
      subsidiaries, or would prohibit or otherwise interfere with the ability of
      the Company to enter into and perform  any of its  obligations  under this
      Agreement in any material respect.

            (g) The Company  will at all times have  authorized  and  reserved a
      sufficient number of shares of Common Stock for the full conversion of the
      Note and exercise of the Warrants.

      7. Miscellaneous.

            (a)  Remedies.  In the  event of a  breach  by the  Company  or by a
      Holder, of any of their respective obligations under this Agreement,  each
      Holder or the Company,  as the case may be, in addition to being  entitled
      to exercise all rights granted by law and under this Agreement,  including
      recovery of damages,  will be  entitled  to  specific  performance  of its
      rights under this Agreement.

            (b) No  Piggyback  on  Registrations.  Except  as and to the  extent
      specified  in  Schedule  7(b)  hereto,  neither the Company nor any of its
      security holders (other than the Holders in such capacity pursuant hereto)
      may include securities of the Company in any Registration  Statement other
      than the Registrable Securities,  and the Company shall not after the date
      hereof enter into any agreement  providing any such right for inclusion of
      shares  in the  Registration  Statement  to any of its  security  holders.
      Except as and to the extent specified in Schedule 7(b) hereto, the Company
      has not previously  entered into any agreement  granting any  registration
      rights with respect to any of its  securities  to any Person that have not
      been fully satisfied.

            (c) Compliance. Each Holder covenants and agrees that it will comply
      with  the  prospectus  delivery  requirements  of  the  Securities  Act as
      applicable  to it in  connection  with  sales  of  Registrable  Securities
      pursuant to the Registration Statement.

<PAGE>

            (d) Discontinued Disposition.  Each Holder agrees by its acquisition
      of such  Registrable  Securities  that,  upon receipt of a notice from the
      Company of the occurrence of a  Discontinuation  Event (as defined below),
      such Holder will forthwith  discontinue  disposition  of such  Registrable
      Securities under the applicable Registration Statement until such Holder's
      receipt  of the  copies  of the  supplemented  Prospectus  and/or  amended
      Registration Statement or until it is advised in writing (the "Advice") by
      the Company that the use of the applicable Prospectus may be resumed, and,
      in either case,  has received  copies of any  additional  or  supplemental
      filings that are incorporated or deemed to be incorporated by reference in
      such  Prospectus  or  Registration  Statement.  The  Company  may  provide
      appropriate  stop orders to enforce the provisions of this paragraph.  For
      purposes of this Section  7(d), a  "Discontinuation  Event" shall mean (i)
      when the Commission  notifies the Company whether there will be a "review"
      of such  Registration  Statement and whenever the  Commission  comments in
      writing on such Registration Statement (the Company shall provide true and
      complete copies thereof and all written  responses  thereto to each of the
      Holders); (ii) any request by the Commission or any other Federal or state
      governmental  authority for amendments or supplements to such Registration
      Statement or Prospectus or for additional information;  (iii) the issuance
      by the Commission of any stop order  suspending the  effectiveness of such
      Registration  Statement covering any or all of the Registrable  Securities
      or the initiation of any Proceedings for that purpose; (iv) the receipt by
      the Company of any  notification  with  respect to the  suspension  of the
      qualification  or exemption from  qualification  of any of the Registrable
      Securities for sale in any jurisdiction,  or the initiation or threatening
      of any Proceeding for such purpose; and/or (v) the occurrence of any event
      or passage of time that makes the  financial  statements  included in such
      Registration  Statement  ineligible for inclusion therein or any statement
      made  in  such  Registration  Statement  or  Prospectus  or  any  document
      incorporated or deemed to be incorporated  therein by reference  untrue in
      any material  respect or that requires any revisions to such  Registration
      Statement,  Prospectus  or other  documents  so that,  in the case of such
      Registration  Statement  or  Prospectus,  as the case may be,  it will not
      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 the circumstances  under which they were
      made, not misleading.

            (e)   Piggy-Back   Registrations.   If  at  any  time   during   the
      Effectiveness  Period  there is not an  effective  Registration  Statement
      covering all of the Registrable Securities and the Company shall determine
      to prepare

<PAGE>

      and file with the  Commission  a  registration  statement  relating  to an
      offering for its own account or the account of others under the Securities
      Act of any of its  equity  securities,  other than on Form S-4 or Form S-8
      (each as promulgated  under the Securities Act) or their then  equivalents
      relating to equity  securities to be issued solely in connection  with any
      acquisition  of any entity or  business or equity  securities  issuable in
      connection  with stock option or other employee  benefit  plans,  then the
      Company  shall send to each Holder  written  notice of such  determination
      and, if within fifteen days after receipt of such notice,  any such Holder
      shall  so  request  in  writing,   the  Company   shall  include  in  such
      registration statement all or any part of such Registrable Securities such
      holder  requests  to be  registered  to the extent the  Company  may do so
      without violating registration rights of others which exist as of the date
      of this Agreement, subject to customary underwriter cutbacks applicable to
      all holders of  registration  rights and subject to obtaining any required
      the consent of any selling  stockholder(s)  to such  inclusion  under such
      registration statement.

            (f)  Amendments  and  Waivers.  The  provisions  of this  Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented,  and waivers or consents to departures  from the  provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the  Company  and  the  Holders  of  the  then   outstanding   Registrable
      Securities.  Notwithstanding the foregoing,  a waiver or consent to depart
      from  the  provisions  hereof  with  respect  to  a  matter  that  relates
      exclusively to the rights of certain Holders and that does not directly or
      indirectly  affect the rights of other  Holders may be given by Holders of
      at least a majority of the Registrable  Securities to which such waiver or
      consent relates;  provided,  however, that the provisions of this sentence
      may not be amended,  modified,  or supplemented  except in accordance with
      the provisions of the immediately preceding sentence.

            (g)  Notices.  Any notice or request  hereunder  may be given to the
      Company or the Purchaser at the respective addresses set forth below or as
      may  hereafter be specified in a notice  designated as a change of address
      under this Section 7(g). Any notice or request hereunder shall be given by
      registered or certified  mail,  return receipt  requested,  hand delivery,
      overnight  mail,  Federal  Express or other  national  overnight  next day
      carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices
      and requests  shall be, in the case of those by hand  delivery,  deemed to
      have been given when  delivered to any party to whom it is  addressed,  in
      the case of those by mail or  overnight  mail,  deemed

<PAGE>

      to have been given three (3) business  days after the date when  deposited
      in the mail or with the overnight mail carrier,  in the case of a Courier,
      the next  business day following  timely  delivery of the package with the
      Courier, and, in the case of a telecopy,  when confirmed.  The address for
      such notices and communications shall be as follows:

            If to the Company:            Conolog Corporation

                                          Attention:   Chief Financial Officer
                                          Facsimile:   (908) 722-5461

                                          with a copy to: Milberg Weiss

                                          Attention:    David Manno, Esq.
                                          Facsimile:    (212) 273-4317

            If to a Purchaser:            To the address set forth under such
                                          Purchaser name on the signature pages
                                          hereto.

            If to any other Person who
            is then the registered
            Holder:                       To the address of such Holder as it
                                          appears in the stock transfer books of
                                          the Company

         or such other address as may be designated in writing hereafter in
         accordance with this Section 7(g) by such Person.

            (h)  Successors  and  Assigns.  This  Agreement  shall  inure to the
      benefit of and be binding upon the  successors  and  permitted  assigns of
      each of the parties and shall  inure to the  benefit of each  Holder.  The
      Company  may not assign its rights or  obligations  hereunder  without the
      prior  written  consent of each  Holder.  Each  Holder  may  assign  their
      respective  rights hereunder in the manner and to the Persons as permitted
      under the Notes and the Security  Agreement with the prior written consent
      of the Company, which consent shall not be unreasonably withheld.

<PAGE>

            (i) Execution and  Counterparts.  This  Agreement may be executed in
      any number of counterparts, each of which when so executed shall be deemed
      to be an original and, all of which taken  together  shall  constitute one
      and the same  Agreement.  In the event that any  signature is delivered by
      facsimile  transmission,  such  signature  shall  create  a valid  binding
      obligation of the party  executing  (or on whose behalf such  signature is
      executed)  the same with the same  force and  effect as if such  facsimile
      signature were the original thereof.

            (j)  Governing  Law.  All  questions  concerning  the  construction,
      validity,  enforcement  and  interpretation  of this  Agreement  shall  be
      governed by and  construed  and enforced in  accordance  with the internal
      laws of the  State  of New  York,  without  regard  to the  principles  of
      conflicts  of  law  thereof.   Each  party  agrees  that  all  Proceedings
      concerning   the   interpretations,   enforcement   and   defense  of  the
      transactions contemplated by this Agreement shall be commenced exclusively
      in the state and federal courts  sitting in the City of New York,  Borough
      of  Manhattan.  Each  party  hereto  hereby  irrevocably  submits  to  the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of New York,  Borough of  Manhattan  for the  adjudication  of any dispute
      hereunder or in connection  herewith or with any transaction  contemplated
      hereby or discussed herein, and hereby irrevocably  waives, and agrees not
      to assert in any Proceeding,  any claim that it is not personally  subject
      to the  jurisdiction of any such court,  that such Proceeding is improper.
      Each party hereto hereby  irrevocably  waives personal  service of process
      and consents to process  being served in any such  Proceeding by mailing a
      copy thereof via registered or certified mail or overnight  delivery (with
      evidence of  delivery)  to such party at the address in effect for notices
      to it under this  Agreement and agrees that such service shall  constitute
      good and  sufficient  service  of  process  and  notice  thereof.  Nothing
      contained  herein  shall be  deemed to limit in any way any right to serve
      process  in  any  manner  permitted  by  law.  Each  party  hereto  hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and all right to trial by jury in any legal  proceeding  arising out of or
      relating to this Agreement or the  transactions  contemplated  hereby.  If
      either party shall  commence a Proceeding  to enforce any  provisions of a
      Transaction  Document,  then the prevailing party in such Proceeding shall
      be reimbursed  by the other party for its  reasonable  attorneys  fees and
      other costs and expenses incurred with the investigation,  preparation and
      prosecution of such Proceeding.

<PAGE>

            (k) Cumulative Remedies. The remedies provided herein are cumulative
      and not exclusive of any remedies provided by law.

            (l) Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal,  void or unenforceable,  the remainder of the terms,  provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected,  impaired or invalidated,  and the
      parties  hereto shall use their  reasonable  efforts to find and employ an
      alternative  means to achieve the same or substantially the same result as
      that contemplated by such term, provision,  covenant or restriction. It is
      hereby  stipulated  and  declared to be the  intention of the parties that
      they would have executed the remaining  terms,  provisions,  covenants and
      restrictions  without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

            (m) Headings.  The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

                   [Balance of page intentionally left blank;
                             signature page follows]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

CONOLOG CORPORATION                         LAURUS MASTER FUND, LTD.

By:                                         By:
        ------------------------------               ---------------------------
Name:                                       Name:
        ------------------------------               ---------------------------
Title:                                      Title:
        ------------------------------               ---------------------------

                                            Address for Notices:

                                            825 Third Avenue - 14th Floor
                                            New York, NY  10022
                                            Attention:        David Grin
                                            Facsimile:        212-541-4434

<PAGE>

                                    EXHIBIT A

                                [Month __, 2004]

[Continental Stock Transfer
   & Trust Company
Two Broadway
New York, NY  10004
Attn:  William Seegraber]

Re:      [Company Name]. Registration Statement on Form [S-3]

Ladies and Gentlemen:

      As counsel to[company name] , a Delaware  corporation (the "Company"),  we
have been  requested to render our opinion to you in connection  with the resale
by the  individuals  or  entitles  listed on  Schedule  A attached  hereto  (the
"Selling Stockholders"), of an aggregate of [amount]shares (the "Shares") of the
Company's Common Stock.

      A  Registration  Statement on Form [S-3] under the Securities Act of 1933,
as amended  (the  "Act"),  with respect to the resale of the Shares was declared
effective by the Securities and Exchange  Commission on [date].  Enclosed is the
Prospectus  dated [date].  We  understand  that the Shares are to be offered and
sold in the manner described in the Prospectus.

      Based upon the foregoing,  upon request by the Selling Stockholders at any
time while the registration statement remains effective,  it is our opinion that
the Shares have been  registered  for resale under the Act and new  certificates
evidencing  the Shares  upon their  transfer or  re-registration  by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.

                                                     Very truly yours,

                                                     [Company counsel]

<PAGE>

                                   Schedule A

                                                                     Shares
Selling Stockholder                    R/N/O                      Being Offered
-------------------                    -----                      -------------

<PAGE>

                          Registration Rights Agreement

                                  Schedule 7(b)Exhibit 4.3

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. 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
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CONOLOG CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

      FOR VALUE  RECEIVED,  CONOLOG  CORPORATION,  a Delaware  corporation  (the
"Borrower"),  hereby promises to pay to LAURUS MASTER FUND,  LTD., c/o Ironshore
Corporate  Services Ltd.,  P.O. Box 1234 G.T.,  Queensgate  House,  South Church
Street, Grand Cayman,  Cayman Islands,  Fax:  345-949-9877 (the "Holder") or its
registered  assigns or successors in interest,  on order, the sum of One Million
Two Hundred Thousand DOLLARS ($1,200,000),  together with any accrued and unpaid
interest hereon, on April 26, 2007 (the "Maturity Date") if not sooner paid.

      Capitalized  terms used herein without  definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "Purchase Agreement").

The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

      1.1  Interest  Rate and  Payment.  (a)  Subject to  Sections  4.10 and 5.6
hereof,  interest  payable  on this Note  shall  accrue at a rate per annum (the
"Interest  Rate") equal to the "prime rate" published in The Wall Street Journal
from time to time,  The prime rate shall be  increased  or decreased as the case
may be for each  increase or  decrease  in the prime rate in an amount  equal to
such  increase or decrease in the prime rate;  each change to be effective as of
the day of the change in such  rate.  The  Interest  Rate shall not be less than
four percent  (4.0%) (the "Interest Rate Floor") unless the Borrower shall be in
compliance  with  Section  2.2  hereof  . If  the  Borrower  has  satisfied  the
requirements  of  Section  2.2  hereof,  the  Interest  Rate will be  subject to
adjustment  as set forth in  Section  1.1(b).  In no event,  however,  shall the
Interest  Rate be less than zero  percent  (0.00%).  Interest  shall be  payable
monthly  in  arrears  commencing  on  May 1,  2004,  on the  first  day of  each
consecutive  calendar month thereafter  (each, a "Repayment  Date"),  and on the
Maturity Date, whether by acceleration or otherwise.

      1.1  (b) On the  last  business  day of each  month  hereafter  until  the
Maturity  Date  (each a  "Determination  Date"),  the  Interest  Rate  shall  be
decreased as follows:  if (i) the Borrower  shall have  registered the shares of
the  Borrower's  common stock  underlying  the  conversion  of the Note and

                                        1
<PAGE>

that  certain  warrant  issued to Holder on a  registration  statement  declared
effective by the SEC, and (ii) the volume  weighted  average price of the Common
Stock as reported by Bloomberg,  L.P. on the principal  market for the five ( 5)
trading  days  immediately  preceding  a  Determination  Date  exceeds  the then
applicable Fixed Conversion Price, the Interest Rate for the succeeding calendar
month  shall  automatically  be  reduced  by 50 basis  points  (0.50%)  for each
incremental twenty five percent (25%) increase in the market price of the Common
Stock above the then applicable Fixed Conversion Price.

      1.2  Minimum  Monthly  Principal  Payments.  Amortizing  payments  of  the
aggregate  principal  amount  outstanding  under  this  Note  at any  time  (the
"Principal  Amount")  shall  begin on May 1, 2005 and  shall  recur on the first
calendar day of each succeeding  month thereafter until the Maturity Date (each,
an  "Amortization  Date").  Subject to Section 3 below,  beginning  on the first
Amortization  Date,  the Borrower  shall make monthly  payments to the Holder on
each Repayment Date, each in the amount of $50,000.00, together with any accrued
and unpaid interest to date on such portion of the Principal Amount plus any and
all other  amounts  which are then owing  under this Note but have not been paid
(collectively, the "Monthly Amount").

                                   ARTICLE II
                           CONVERSION REPAYMENT OPTION

      2.1 (a) Payment of Monthly Amount in Cash or Common Stock.  Subject to the
terms  hereof,  the Holder  shall have the sole option to  determine  whether to
elect to accept  payment of the Monthly  Amount on each Repayment Date either in
cash or in shares of Common Stock (as defined in the Purchase  Agreement),  or a
combination  of both.  Each month by the fifth (5th)  business day prior to each
Amortization  Date (the "Notice  Date"),  the Holder shall deliver to Borrower a
written notice in the form of Exhibit B attached  hereto electing to convert the
Monthly  Amount  payable  on the next  Repayment  Date in either  cash or Common
Stock,  or a combination  of both (each, a "Repayment  Election  Notice") . If a
Repayment  Election  Notice is not  delivered  by the  Holder  on or before  the
applicable  Notice Date for such Repayment Date, then the Borrower shall pay the
Monthly  Amount due on such  Repayment  Date in cash. Any portion of the Monthly
Amount paid in cash on a Repayment  Date,  shall be paid to the Holder an amount
equal to 100%of the  principal  portion of the  Monthly  Amount due and owing to
Holder on the  Repayment  Date.  If the Holder  converts all or a portion of the
Monthly Amount in shares of Common Stock, the number of such shares to be issued
by the  Borrower  to the  Holder  on such  Repayment  Date  shall be the  number
determined  by  dividing  (x) the  portion of the  Monthly  Amount to be paid in
shares of Common Stock, by (y) the then applicable Fixed  Conversion  Price. For
purposes hereof, the initial "Fixed Conversion Price" means $1.06.

      (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2  hereof,  the  Holder  shall  elect to  convert  all or a portion of the
Monthly  Amount  due on each  Repayment  Date in shares  of Common  Stock if the
closing  price of the  Common  Stock  as  reported  by  Bloomberg,  L.P.  on the
Principal  Market (as  defined in Section  4.7  hereof) for the five (5) trading
days preceding such Repayment Date was greater than 110% of the Fixed Conversion
Price and .

                                       2
<PAGE>

Any part of the Monthly  Amount due on a Repayment  Date that the Holder has not
elected to convert  into shares of Common Stock shall be paid by the Borrower in
cash  on  such  Repayment  Date.  Any  part of the  Monthly  Amount  due on such
Repayment  Date which the Holder has  elected to convert  into  shares of Common
Stock but which  must be paid in cash (as a result of the  closing  price of the
Common  Stock  on one or  more  of the  five  (5)  trading  days  preceding  the
applicable  Repayment  Date was less than 110% of the  Fixed  Conversion  Price)
shall be paid in cash within three (3) business days of the applicable Repayment
Date.

      2.2 No Effective  Registration.  Notwithstanding  anything to the contrary
herein,  none of the Borrower's  obligations to the Holder may be converted into
Common Stock unless (i) an effective current Registration  Statement (as defined
in the Registration  Rights Agreement) covering the shares of Common Stock to be
issued in connection with satisfaction of such obligations exists, (ii) no Event
of Default  hereunder exists and is continuing,  unless such 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  (iii)  an  exemption  from
registration  of the Common  Stock is  available  to pursuant to Rule 144 of the
Securities Act.

      Any amounts  converted by the Holder pursuant to this Section 2.2 shall be
deemed to  constitute  payments  of  outstanding  principal  applying to Monthly
Amounts for the remaining Repayment Dates in chronological order.

      2.3  Prepayments  in Common Stock.  Subject to Section 2.2 hereof,  if the
closing price of the Common Stock on the  Principal  Market is greater than 110%
of the Fixed  Conversion  Price for a period of at least thirty (30) consecutive
trading  days,  then the Holder at its sole option,  shall  provide the Borrower
written notice (a "Prepayment Call Notice") requiring the conversion at the then
applicable  Fixed  Conversion  Price  of all  or a  portion  of the  outstanding
principal,  interest and fees outstanding under this Note (subject to compliance
with Section 2.3 and 3.2),  together  with accrued  interest on the amount being
prepaid,  as of  the  date  set  forth  in  such  Prepayment  Call  Notice  (the
"Prepayment  Call Date").  The  Prepayment  Call Date shall be at least ten (10)
trading days following the date of the Prepayment  Call Notice On the Prepayment
Call Date, the Holder shall deliver to the Borrower certificates  evidencing the
shares of Common  Stock issued in  satisfaction  of the  principal  and interest
being  prepaid.  Notwithstanding  the  foregoing,  the Holder's right to convert
shares of Common Stock in satisfaction of the Borrower's  obligations under this
Note  shall be  subject  to the  limitation  that the number of shares of Common
Stock issued in connection  with any Prepayment Call Notice shall not exceed ten
percent (10% )of the aggregate dollar trading volume of the Common Stock for the
ten (10) trading days  immediately  preceding the Prepayment  Call Date (as such
volume is reported by  Bloomberg  L.P.).  If the price of the Common Stock falls
below 110% of the then  applicable  Fixed  Conversion  Price during the ten (10)
trading day period  immediately  preceding the  Prepayment  Call Date,  then the
Holder will then be  required  to convert  only such amount of the Note as shall
equal ten percent (10%) of the aggregate  dollar  trading volume (as such volume
is reported by  Bloomberg  L.P.) for each day that the Common Stock has exceeded
110% of the then applicable Fixed Conversion Price.

                                       3
<PAGE>

      The  Holder  shall not be  permitted  to give the  Borrower  more than one
Prepayment Call Notice under this Note during any 22-day period.

      2.4 Optional  Redemption  in Cash.  The  Borrower  will have the option of
prepaying  this Note  ("Optional  Redemption")  by paying to the Holder a sum of
money equal to one hundred thirty percent (125%) of the principal amount of this
Note  together  with accrued but unpaid  interest  thereon and any and all other
sums due, accrued or payable to the Holder arising under this Note, the Security
Agreement,  or any Ancillary  Agreement  (as defined in the Security  Agreement)
(the  "Redemption  Amount")  outstanding on the day written notice of redemption
(the "Notice of  Redemption")  is given to the Holder.  The Notice of Redemption
shall specify the date for such Optional  Redemption  (the  "Redemption  Payment
Date")  which  date  shall be seven  (7) 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 this Note for which the Holder has a
pending election to convert pursuant to Section 3.1, or for conversions  elected
to be made by the Holder  pursuant to Section 3.1 during the Redemption  Period.
The  Redemption  Amount  shall  be  determined  as if such  Holder's  conversion
elections  had been  completed  immediately  prior to the date of the  Notice of
Redemption.  On the Redemption  Payment Date, the Redemption Amount must be paid
in good  funds  to the  Holder.  In the  event  the  Borrower  fails  to pay the
Redemption  Amount on the Redemption  Payment Date, then such Redemption  Notice
will be null and void.

                                   ARTICLE III
                                CONVERSION RIGHTS

      3.1. Holder's  Conversion Rights. The Holder shall have the right, but not
the obligation,  to convert all or any portion of the then aggregate outstanding
principal amount of this Note,  together with interest and fees due hereon, into
shares of Common  Stock  subject to the terms and  conditions  set forth in this
Article III. The Holder may exercise such right by delivery to the Borrower of a
written  notice of  conversion  not less than one (1) day prior to the date upon
which such conversion  shall occur.  The date upon which such  conversion  shall
occur is (the "Conversion Date").

      3.2 Conversion  Limitation.  Notwithstanding  anything contained herein to
the contrary,  the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible  into that number of Conversion
Shares  which  would (i) exceed the  difference  between the number of shares of
Common  Stock  beneficially  owned by such Holder or issuable  upon  exercise of
warrants held by such Holder and 4.99% of the outstanding shares of Common Stock
of the Borrower or (ii) exceed twenty five percent (25%) of the aggregate dollar
trading  volume  of the  Common  Stock  for  the ten  (10)  day  trading  period
immediately  preceding any  conversion  made pursuant to the terms of this Note.
For the purposes of the immediately  preceding  sentence,

                                       4
<PAGE>

beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and Regulation 13d-3 thereunder. The Holder may void the Conversion
Share limitation  described in this Section 3.2 upon 75 days prior notice to the
Borrower  or  without  any  notice   requirement   upon  an  Event  of  Default.
Notwithstanding  anything contained herein to the contrary, the number of shares
of Common Stock issuable by the Borrower and acquirable by the Holder at a price
below $ 1.06 [market  price of the stock at closing]  per share  pursuant to the
terms of this Note  and/or  the  Warrant  issued by the  Borrower  to the Holder
pursuant to that certain Securities Purchase Agreement dated April 26, 2004 (the
"April Transaction Documents"),  shall not exceed an aggregate of 459,770 shares
of the Borrower's  Common Stock,  (subject to  appropriate  adjustment for stock
splits, stock dividends, or other similar recapitalizations affecting the Common
Stock)(the  "Maximum  Common  Stock  Issuance"),  unless the  issuance of shares
hereunder in excess of the Maximum Common Stock Issuance shall first be approved
by the  Borrower's  shareholders.  If at any point in time and from time to time
the number of shares of Common Stock  issued  pursuant to the terms of the April
Transaction  Documents  would exceed the Maximum  Common Stock  Issuance but for
this Section 3.2, the Borrower shall promptly,  but no later than July 31, 2004,
call a shareholders  meeting to solicit shareholder approval for the issuance of
the shares of Common  Stock  hereunder  in excess of the  Maximum  Common  Stock
Issuance.

      3.3  Mechanics  of Holder's  Conversion.  (a) In the event that the Holder
elects to convert this Note into Common  Stock,  the Holder shall give notice of
such  election by  delivering  an executed and  completed  notice of  conversion
("Notice of  Conversion")  to the Borrower and such Notice of  Conversion  shall
provide a  breakdown  in  reasonable  detail of the  Principal  Amount,  accrued
interest  and fees being  converted.  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 and shall provide  written notice thereof to the Borrower
within two (2) business  days after the  Conversion  Date.  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 (the  "Conversion
Date").  A form of Notice of  Conversion to be employed by the Holder is annexed
hereto as Exhibit A.

                                       5
<PAGE>

      (b) Pursuant to the terms of the Notice of  Conversion,  the Borrower will
issue  instructions  to the transfer agent  accompanied by an opinion of counsel
within  three (3)  business  days of the date of the delivery to Borrower of the
Notice  of  Conversion  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 Common  Stock,  unless the Holder  provides the Borrower  written
instructions to the contrary.

      3.4 Conversion Mechanics.

      (a) The number of shares of Common Stock to be issued upon each conversion
of this Note shall be  determined  by dividing that portion of the principal and
interest  and  fees  to be  converted,  if any,  by the  then  applicable  Fixed
Conversion  Price.  In the event of any  conversions  of  outstanding  principal
amount under this Note in part  pursuant to this Article III,  such  conversions
shall be  deemed to  constitute  conversions  of  outstanding  principal  amount
applying to Monthly Amounts for the remaining  Repayment Dates in  chronological
order.  By way of  example,  if the  original  principal  amount of this Note is
$1,200,000 and the Holder  converted  $60,000 of such original  principal amount
prior to the first Repayment Date, then (1) the principal  amount of the Monthly
Amount due on the first Repayment Date would equal $0, (2) the principal  amount
of the Monthly  Amount due on the second  Repayment Date would equal $10,000 and
(3) the principal  amount of the Monthly Amount due on the third Repayment Dates
would be $50,000.

      (b) The  Fixed  Conversion  Price and  number  and kind of shares or other
securities to be issued upon  conversion  is subject to adjustment  from time to
time upon the occurrence of certain events, as follows:

      A. 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 Fixed Conversion Price or the Conversion Price, as the case may be, 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.

      B.  During the period the  conversion  right  exists,  the  Borrower  will
reserve from its  authorized  and unissued  Common Stock a sufficient  number of
shares to provide for the issuance of

                                       6
<PAGE>

Common Stock upon the full conversion of this Note. The Borrower represents that
upon  issuance,  such  shares will be duly and  validly  issued,  fully paid and
non-assessable.  The  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.

      C. Share Issuances.  Subject to the provisions of this Section 3.4, if the
Borrower  shall at any time prior to the  conversion or repayment in full of the
Principal  Amount  issue any shares of Common  Stock to a person  other than the
Holder  (except  (i)  pursuant to  Subsections  A or B above;  (ii)  pursuant to
options,  warrants, or other obligations to issue shares outstanding on the date
hereof as disclosed to Holder in writing;  (iii) pursuant to options that may be
issued under any employee  incentive  stock option  and/or any  qualified  stock
option plan, or as part of any incentive,  bonus or compensation plan adopted by
the  Borrower or (iv) to its  employees,  or  consultants  and  suppliers in the
ordinary  course  of  business  as it is  currently  being  conducted,  provided
however,  that such  issuances  pursuant to this section C shall (vi) not exceed
250,000  shares in any calendar  year (vii) be at an issue price per share above
the  then  applicable  Fixed  Conversion  Price,  and  (viii)  be in the form of
restricted  stock) for a  consideration  per share (the "Offer Price") less than
the Fixed  Conversion  Price in effect  at the time of such  issuance,  then the
Fixed Conversion Price shall be immediately reset to such lower Offer Price.

      D.  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 Amount 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.

      3.5 Issuance of New Note. Upon any partial  conversion of this Note, a new
Note  containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Borrower to the Holder for the principal balance
of this Note and  interest  which  shall not have been  converted  or paid.  The
Borrower will pay no costs,  fees or any other  consideration  to the Holder for
the production and issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      Upon the  occurrence  and  continuance  of an Event of Default  beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable  hereunder
due and payable  within five (5) business days after written  notice from Holder
to Borrower (each occurrence  being a "Default Notice Period").  In the event of
such an  acceleration,  the amount due and owing to the Holder  shall be 125% of
the

                                       7
<PAGE>

outstanding  principal  amount of the Note (plus accrued and unpaid interest and
fees,  if any).  If, with  respect to any Event of Default  other than a payment
default  described in Section 4.1 below,  within the Default  Notice  Period the
Borrower  cures the Event of Default,  the Event of Default will be deemed to no
longer exist and any rights and remedies of Holder  pertaining  to such Event of
Default will be of no further force or effect.

      The occurrence of any of the following events is an "Event of Default":

      4.1 Failure to Pay  Principal,  Interest or other Fees. The Borrower fails
to pay when due any  installment of principal,  interest or other fees hereon in
accordance herewith,  or the Borrower fails to pay when due any amount due under
any other promissory note issued by Borrower.

      4.2 Breach of  Covenant.  The Borrower  breaches any material  covenant or
other term or condition  of this Note or the Purchase  Agreement in any material
respect and such breach,  if subject to cure,  continues  for a period of thirty
(30) days after the occurrence thereof.

      4.3 Breach of Representations and Warranties.  Any material representation
or warranty of the Borrower made herein,  in the Purchase  Agreement,  or in any
Related  Document (as defined in the  Purchase  Agreement)  shall be  materially
false or  misleading  and shall  not be cured  for a period of thirty  (30) days
after the occurrence thereof.

      4.4 Receiver or Trustee.  The Borrower  shall make an  assignment  for the
benefit of creditors,  or apply for or consent to the  appointment of a receiver
or trustee for it or for a substantial part of its 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 the Borrower or any of its property or other assets for
more than  $250,000,  and shall  remain  unvacated,  unbonded or unstayed  for a
period of ninety (90) days.

      4.6  Bankruptcy.  Bankruptcy,  insolvency,  reorganization  or liquidation
proceedings  or other  proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower.

      4.7 Stop  Trade.  An SEC stop  trade  order or  Principal  Market  trading
suspension  of the Common Stock shall be in effect for 5  consecutive  days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal Market,  provided that the Borrower shall not have
been able to cure such trading  suspension  within 30 days of the notice thereof
or list the Common  Stock on  another  Principal  Market  within 60 days of such
notice.  The "Principal  Market" for the Common Stock shall include the NASD OTC
Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System,  American
Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the
time the  principal  trading  exchange  or market for the Common  Stock,  or any
securities exchange or other securities market on which the Common Stock is then
being listed or traded.

                                       8
<PAGE>

      4.8 Failure to Deliver  Common Stock or  Replacement  Note. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note, and Section 9 of the Purchase Agreement,  if such failure
to timely  deliver  Common  Stock shall not be cured  within  three (3) business
days. If Borrower is required to issue a replacement Note to Holder and Borrower
shall fail to deliver such replacement Note within seven (7) Business Days.

      4.9 Default Under Related  Agreements.  The occurrence and  continuance of
any Event of Default as defined in the Related Agreements.

                           DEFAULT RELATED PROVISIONS

      4.10 Payment  Grace Period.  The Borrower  shall have a three (3) business
day grace period to pay any monetary amounts due under this Note or the Purchase
Agreement or any Related Agreement,  after which grace period a default interest
rate of two  percent  (2%) per month  shall  apply to the  monetary  amounts due
hereunder.

      4.11 Conversion Privileges. The conversion privileges set forth in Article
III shall remain in full force and effect  immediately  from the date hereof and
until this Note is paid in full.

      4.12  Cumulative   Remedies.   The  remedies  under  this  Note  shall  be
cumulative.

                                    ARTICLE V
                                  MISCELLANEOUS

      5.1 Failure or Indulgence  Not Waiver.  No failure or delay on the part of
the 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.  Any notice herein required or permitted to be given shall be
in writing and shall be deemed  effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal  business hours of the recipient,  if not, then on the next business day,
(c) five days after having been sent by  registered  or certified  mail,  return
receipt  requested,  postage  prepaid,  or (d)  one  day  after  deposit  with a
nationally  recognized  overnight  courier,  specifying next day delivery,  with
written  verification  of  receipt.  All  communications  shall  be  sent to the
Borrower  at  the  address  provided  in  the  Purchase  Agreement  executed  in
connection  herewith,  and to the Holder at the address provided in the Purchase
Agreement  for such  Holder,  with a copy to John E.  Tucker,  Esq.,  825  Third
Avenue,  14th Floor, New York, New York 10022,  facsimile number (212) 541-4434,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.

      5.3 Amendment  Provision.  The term "Note" and all reference  thereto,  as
used  throughout

                                       9
<PAGE>

this instrument,  shall mean this instrument as originally executed, or if later
amended or supplemented,  then as so amended or supplemented,  and any successor
instrument  issued  pursuant  to  Section  3.5  hereof,  as it may be 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, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement.

      5.5  Governing  Law.  This Note  shall be  governed  by and  construed  in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of laws.  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.  Both  parties and the  individual  signing this Note on behalf of the
Borrower  agree to submit to the  jurisdiction  of such courts.  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  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.

      5.6  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.

      5.7 Security Interest. The holder of this Note has been granted a security
interest in certain  assets of the Borrower  more fully  described in a Security
Agreement dated as of Feburary __, 2004.

      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 Cost of  Collection.  If default is made in the  payment of this Note,
the  borrower  shall pay to Holder  reasonable  costs of  collection,  including
reasonable attorney's fees.

                                       10
<PAGE>

       [Balance of page intentionally left blank; signature page follows.]

                                       11
<PAGE>

      IN WITNESS  WHEREOF,  Borrower has caused this Convertible Term Note to be
signed in its name effective as of this 26th day of April, 2004.

                                           CONOLOG CORPORATION

                                           By:________________________________
                                           Name:______________________________
                                           Title:_____________________________

WITNESS:

________________________________

                                       12
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be  executed  by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The Undersigned hereby elects to convert $_________ of the principal due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
CONOLOG CORPORATION dated April 26, 2004 by delivery of Shares of Common Stock
of CONOLOG CORPORATION on and subject to the conditions set forth in Article III
of such Note.

1.    Date of Conversion _______________________

2.    Shares To Be Delivered: _______________________

                                              By:_______________________________
                                              Name:_____________________________
                                              Title:____________________________

                                       13
<PAGE>

                                    EXHIBIT B

                            CONVERSIONELECTION NOTICE

(To be  executed  by the  Holder  in order to  convert  all or part of a Monthly
Amount into Common Stock)

[Name and Address of Holder]

Holder hereby elects to convert $_________ of the Monthly Amount due on [specify
applicable Repayment Date] under the Convertible Term Note issued by CONOLOG
CORPORATION dated _______, 200__ by delivery of Shares of Common Stock of
CONOLOG CORPORATION on and subject to the conditions set forth in Article III of
such Note.

1.    Fixed Conversion Price: $_______________________

2.    Amount to be paid: $_______________________

3.    Shares To Be Delivered (2 divided by 1): __________________

4.    Cash payment to be made by Borrower : $_____________________

Date: ____________                             LAURUS  MASTER FUND, LTD.

                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]