Document:

Exhibit 4.1 

	
 

	
 

	
 

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

	
 

	
 

	
Principal
Amount: $____________ 

	
Issue Date: August 3, 2009  

SECURED CONVERTIBLE NOTE

          FOR
VALUE RECEIVED, CONOLOG CORPORATION, a Delaware corporation (hereinafter called
“Borrower”), hereby promises to pay to ______________________________________,
_________________________________________________________ (the “Holder”) or
its registered assigns or successors in interest or order, without demand, the
sum of ___________________________ Dollars ($__________) (“Principal Amount”),
with simple and unpaid interest thereon, on January 3, 2010, unless the
Approval (as defined in Section 9(q) of the Subscription Agreement) is obtained
upon which the Maturity Date will be extended to January 3, 2011 (the “Maturity
Date”), if not sooner paid. 

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

ARTICLE I

INTEREST; AMORTIZATION

          1.1.
Interest Rate. Subject to Section 6.7 hereof, interest payable on this
Note shall accrue at a rate per annum (the “Interest Rate”) of four percent
(4%). Upon receipt of either the Approval or Rejection as described in Section
9(v) of the Subscription Agreement, interest payable on this Note shall accrue
at a rate per annum of eight percent (8%). Interest on the Principal Amount
shall accrue from the date of this Note and shall be payable quarterly, in
arrears, commencing six months after the Closing Date and on the Maturity Date,
whether by acceleration or otherwise. Interest shall be payable in cash.
However, provided the Company has timely obtained the Approval (as defined in
Section 9(v) of the Subscription Agreement), if the Approval is required by
applicable NASD Market Place Rules and/or Nasdaq’s corporate governance rules
and provided the Shares may be sold pursuant to Rule 144(b)(1) and further
provided no Event of Default is continuing following a five day cure period,
then interest may be payable, at the option of the Holder in cash or Common
Stock at an applied conversion rate equal to the lessor of (i) the Fixed
Conversion Price (as defined in Section 3.1 hereof), or (ii) seventy-five percent
(75%) of the average of the three lowest closing bid prices of the Common stock
as reported by Bloomberg L.P. for the ten (10) trading days preceding such
interest payment date. In the event the closing bid price of the Common Stock
is more than 41% premium over the Fixed Conversion Price for each of the ten
(10) days preceding an interest payment date, then interest for that quarter
shall accrue and be payable on the

1

Maturity Date in cash unless sooner converted into Common Stock at the
election of Holder at the applied conversion rate described above. In the event
the closing bid price is less than 41% premium of the Fixed Conversion Price
for each of the ten (10) days preceding an interest payment date, then the
Holder may elect to either be paid the interest in cash, or at the applied
conversion rate described above or to accrue the interest payable for that
quarter until the Maturity Date. 

          1.2.
Repayment. The Note is repayable in full in cash on the Maturity Date.
The foregoing notwithstanding, in the event the Company fails to obtain the
Approval (as defined in Section 9(v) of the Subscription Agreement), fifty
percent (50%) of the outstanding Principal Amount of the Note will be deemed
satisfied. 

          1.3.
Default Interest Rate. Following the occurrence and during the
continuance of an Event of Default, which, if susceptible to cure is not cured
within five (5) days, otherwise then from the first date of such occurrence,
the annual interest rate on this Note shall (subject to Section 6.7)
automatically be increased to fifteen percent (15%). 

ARTICLE II

CONVERSION REPAYMENT

          2.1.
No Effective Registration. Notwithstanding anything to the contrary
herein, no amount payable hereunder may be paid in shares of Common Stock by the
Borrower without the Holder’s consent unless (a) either (i) an effective
current registration statement covering the shares of Common Stock to be issued
in satisfaction of such obligations exists, or (ii) an exemption from
registration of the Common Stock is available pursuant to Rule 144(b)(1) of the
1933 Act or the rules and regulations promulgated thereunder, and (b) no Event
of Default hereunder (or an event that with the passage of time or the giving
of notice could become an Event of Default), exists and is continuing, unless
such event or Event of Default is cured within any applicable cure period or is
otherwise waived in writing by the Holder in whole or in part at the Holder’s
option. 

          2.2.
Mandatory Conversion. Provided an Event of Default has not occurred,
unless such Event of Default has been cured at least twenty (20) days prior to
the delivery of written notice by Borrower as hereinafter described, then,
commencing after the Actual Effective Date, the Borrower will have the option by
written notice to the Holder (“Notice of Mandatory Conversion”) of compelling
the Holder to convert all or a portion of the outstanding and unpaid principal
of the Note and accrued interest, thereon, into Common Stock at the Conversion
Price then in affect (“Mandatory Conversion”). The Notice of Mandatory
Conversion, which notice must be given on the first day following a consecutive
twenty (20) day trading period during which the closing bid price for the
Company’s Common Stock as reported by Bloomberg, LP for the Principal Market
shall be more than 200% of the Conversion Price in effect at such time each day
and provided during the Lookback Period, daily average trading volume is not
less than $100,000. The date the Notice of Mandatory Conversion is given is the
“Mandatory Conversion Date.” The Notice of Mandatory Conversion shall specify
the aggregate principal amount of the Note which is subject to Mandatory
Conversion, which amount may not exceed in the aggregate, for all Holders who
received Notes similar in term and tenure as this Note, the dollar volume of
Common Stock traded on the Principal Market during the seven (7) trading days
immediately preceding the Mandatory Conversion Date. Mandatory Conversion
Notices must be given proportionately to all Holders of Notes who received
Notes similar in term and tenure as this Note. The Borrower shall reduce the
amount of Note principal and interest subject to a Notice of Mandatory
Conversion by the amount of Note Principal and interest for which the Holder had
delivered a Notice of Conversion to the Borrower during the twenty (20) trading

2

days preceding the Mandatory Conversion Date. Each Mandatory
Conversion Date shall be a deemed Conversion Date and the Borrower and the
Holder will be required to comply with Section 2.1 above. 

ARTICLE III

CONVERSION RIGHTS

          3.1.
Holder’s Conversion Rights. Subject to Section 3.2, the Holder shall
have the right, but not the obligation at all times, to convert all or any
portion of the then aggregate outstanding Principal Amount of this Note, into
shares of Common Stock, subject to the terms and conditions set forth in this
Article III at the rate of $0.78, but in no event greater than $1.00 per share
of Common Stock (“Fixed Conversion Price”) as same may be adjusted pursuant to
this Note and the Subscription Agreement. Commencing on the six months
anniversary of the Closing Date, the Conversion Price shall be the lesser of
the Fixed Conversion Price or 75% of the average of the lowest three closing
bid prices for the ten trading days prior to a Conversion Date. 

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

          3.3.
Mechanics of Holder’s Conversion. 

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

                    (b)
Pursuant to the terms of a Notice of Conversion, the Borrower will issue
instructions to the transfer agent accompanied by an opinion of counsel, if so
required by the Borrower’s 

3

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

          3.4.
Conversion Mechanics. 

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

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

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

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

                              C.
Stock Splits, Combinations and Dividends. If the shares of Common Stock
are subdivided or combined into a greater or smaller number of shares of Common
Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall
be proportionately reduced in case of subdivision of shares or stock dividend
or proportionately increased in

4

the case of combination of shares, in each such
case by the ratio which the total number of shares of Common Stock outstanding
immediately after such event bears to the total number of shares of Common
Stock outstanding immediately prior to such event. 

                              D.
Share Issuance. So long as this Note is outstanding, if the Borrower
shall issue any Common Stock except for the Excepted Issuances (as defined in
the Subscription Agreement), prior to the complete conversion or payment of
this Note, for a consideration less than the Fixed Conversion Price that would
be in effect at the time of such issue, then, and thereafter successively upon
each such issuance, the Conversion Price shall be reduced to such other lower
issue price. For purposes of this adjustment, the issuance of any security or
debt instrument of the Borrower carrying the right to convert such security or
debt instrument into Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Conversion Price
upon the issuance of the above-described security, debt instrument, warrant,
right, or option and again upon the issuance of shares of Common Stock upon
exercise of such conversion or purchase rights if such issuance is at a price
lower than the then applicable Conversion Price. The reduction of the
Conversion Price described in this paragraph is in addition to the other rights
of the Holder described in the Subscription Agreement. 

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

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

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

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

5

ARTICLE IV

EVENTS OF DEFAULT

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

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

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

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

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

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

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

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

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

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

          4.10
Failure to Deliver Common Stock or Replacement Note. Borrower’s failure to
timely deliver Common Stock to the Holder pursuant to and in the form required
by this Note or the Subscription

6

Agreement, and, if requested by Borrower, a
replacement Note, and such failure continues for a period of five (5) business
days after the due date. 

          4.11
RESERVED. 

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

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

ARTICLE V

SECURITY INTEREST

          5.
Security Interest/Waiver of Automatic Stay. This Note is secured by a
security interest granted to the Holder pursuant to a Security Agreement, as
delivered by Borrower to Holder. The Borrower acknowledges and agrees that
should a proceeding under any bankruptcy or insolvency law be commenced by or
against the Borrower, or if any of the Collateral (as defined in the Security
Agreement) should become the subject of any bankruptcy or insolvency
proceeding, then the Holder should be entitled to, among other relief to which
the Holder may be entitled under the Transaction Documents and any other
agreement to which the Borrower and Holder are parties (collectively, “Loan
Documents”) and/or applicable law, an order from the court granting immediate
relief from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the
Holder to exercise all of its rights and remedies pursuant to the Loan
Documents and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF
THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER
EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY
OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING,
WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION,
REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS
RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The
Borrower hereby consents to any motion for relief from stay that may be filed
by the Holder in any bankruptcy or insolvency proceeding initiated by or
against the Borrower and, further, agrees not to file any opposition to any
motion for relief from stay filed by the Holder. The Borrower represents,
acknowledges and agrees that this provision is a specific and material aspect
of the Loan Documents, and that the Holder would not agree to the terms of the
Loan Documents if this waiver were not a part of this Note. The Borrower
further represents, acknowledges and agrees that this waiver is knowingly,
intelligently and voluntarily made, that neither the Holder nor any person
acting on behalf of the Holder has made any representations to induce this
waiver, that the Borrower has been represented (or has had the opportunity to
he represented) in the signing of this Note and the Loan Documents and in the
making of this waiver by independent legal counsel selected by the Borrower and
that the Borrower has discussed this waiver with counsel. Notwithstanding
anything to the contrary herein, upon receipt of the Approval or an opinion
from the Company’s attorneys that the Approval is not required pursuant to the
NASD Market Place Rules and/or Nasdaq’s corporate governance rules this Note
shall no longer be secured. 

7

ARTICLE VI

MISCELLANEOUS

          6.1
Failure or Indulgence Not Waiver. No failure or delay on the part of
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available. 

          6.2
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Borrower to: Conolog Corporation, 5
Columbia Road, Somerville, NJ 08876, Attn: Robert Benou, telecopier: (908)
722-5461, with a copy by telecopier only to: Sichenzia, Ross, Friedman &
Ference LLP, 61 Broadway, 32nd Floor, New York, NY 10006, Attn:
David Manno, Esq., telecopier number: (212) 930-9725, and (ii) if to the
Holder, to the name, address and telecopy number set forth on the front page of
this Note, with a copy by telecopier only to Grushko & Mittman, P.C., 551
Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number: (212)
697-3575. 

          6.3
Amendment Provision. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented. 

          6.4
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. 

          6.5
Cost of Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees. 

          6.6
Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles that would result in the application of the substantive laws
of another jurisdiction. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought
only in the state courts of New York or in the federal courts located in the
State of New York. The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs. In the event that any
provision of this Note is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove invalid or 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

8

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. 

          6.7
Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 

          6.8.
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. 

          6.9
Redemption. This Note may not be redeemed or called. 

          6.10
Shareholder Status. The Holder shall not have rights as a shareholder of
the Borrower with respect to unconverted portions of this Note. However, the
Holder will have the rights of a shareholder of the Borrower with respect to
the Shares of Common Stock to be received after delivery by the Holder of a
Conversion Notice to the Borrower. 

[THIS SPACE INTENTIONALLY LEFT BLANK]

9

          IN WITNESS WHEREOF, Borrower has caused
this Note to be signed in its name by an authorized officer as of the ____ day
of July, 2009. 

	
 

	
 

	
 

	
 

	
CONOLOG CORPORATION
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

WITNESS: 

	
 

	

10

NOTICE OF CONVERSION

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

          The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by Conolog Corporation on July ___, 2009
into Shares of Common Stock of Conolog Corporation (the “Borrower”) according
to the conditions set forth in such Note, as of the date written below. 

Date of
Conversion:____________________________________________________________________

Conversion
Price:______________________________________________________________________ 

Number of
Shares of Common Stock Beneficially Owned on the Conversion Date: Less than 5%
of the outstanding Common Stock of Conolog Corporation 

 Shares To Be Delivered:________________________________________________________________

Signature:____________________________________________________________________________

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Name:__________________________________________________________________________

Address:_____________________________________________________________________________

              ____________________________________________________________________________

11Exhibit 4.2

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

	
  

 	
  

 
	
  

 	
 Right to
 Purchase ________ shares of Common Stock of Conolog Corporation (subject to
 adjustment as provided herein)

 

CLASS A COMMON STOCK PURCHASE WARRANT

	
  

 	
  

 
	
 No. 2009-A-001

 	
 Issue Date: August 3,
 2009          

 

          CONOLOG
CORPORATION, a corporation organized under the laws of the State of Delaware
(the “Company”), hereby certifies that, for value received, _________________________________,
___________________________________________________, or its assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company at any time after the sooner of January 30, 2010 (180 days from the
Issue Date), or the Company obtaining the Approval as defined in Section 9(r)
of the Subscription Agreement if the Approval is required by the applicable
NASD Market Place Rules and/or Nasdaq’s corporate goverence rules, until 5:00
p.m., E.S.T on the fifth (5th) anniversary of the Issue Date (the
“Expiration Date”), up to _________ fully paid and nonassessable shares of
Common Stock at a per share purchase price of $1.12. The aforedescribed
purchase price per share, as adjusted from time to time as herein provided, is
referred to herein as the “Purchase Price.” The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein. The Company may reduce the Purchase Price without the consent
of the Holder. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Subscription Agreement (the
“Subscription Agreement”), dated August 3, 2009, entered into by the Company
and Holders of the Warrant. 

          As
used herein the following terms, unless the context otherwise requires, have
the following respective meanings: 

          (a)
The term “Company” shall include Conolog Corporation and any corporation which
shall succeed or assume the obligations of Conolog Corporation hereunder. 

          (b)
The term “Common Stock” includes (a) the Company’s Common Stock, $0.01 par
value per share, as authorized on the date of the Subscription Agreement, and
(b) any other securities into which or for which any of the securities
described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

          (c)
The term “Other Securities” refers to any stock (other than Common Stock) and
other securities of the Company or any other person (corporate or otherwise)
which the holder of the Warrant at any time shall be entitled to receive, or
shall have received, on the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 5 or otherwise. 

1

          (d)
The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of
this Warrant.

          1.
Exercise of Warrant.

                    1.1.
Number of Shares Issuable upon Exercise. From and after the Issue Date
through and including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in accordance
with subsection 1.3, shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.

                    1.2.
Full Exercise. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by
such Holder and delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in
effect. The original Warrant is not required to be surrendered to the Company
until it has been fully exercised. 

                    1.3.
Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying (a) the
number of whole shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect. On any such
partial exercise provided the Holder has surrendered the original Warrant, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may request, the whole number of shares of Common Stock for
which such Warrant may still be exercised for the balance of.

                    1.4.
Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean: 

                         (a)
If the Company’s Common Stock is traded on an exchange or is quoted on the
National Association of Securities Dealers, Inc. Automated Quotation
(“NASDAQ”), National Market System, the NASDAQ Capital Market or the American
Stock Exchange, LLC, then the closing or last sale price, respectively,
reported for the last business day immediately preceding the Determination
Date;

                         (b)
If the Company’s Common Stock is not traded on an exchange or on the NASDAQ
National Market System, the NASDAQ Capital Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market, then the average
of the closing bid and ask prices reported for the last business day
immediately preceding the Determination Date;

                         (c)
Except as provided in clause (d) below, if the Company’s Common Stock is
not publicly traded, then as the Holder and the Company agree, or in the
absence of such an agreement, by arbitration in accordance with the rules then
standing of the American Arbitration Association, before a single arbitrator to
be chosen from a panel of persons qualified by education and training to pass
on the matter to be decided; or

                         (d)
If the Determination Date is the date of a liquidation, dissolution or winding
up, or any event deemed to be a liquidation, dissolution or winding up pursuant
to the

2

Company’s
charter, then all amounts to be payable per share to holders of the Common
Stock pursuant to the charter in the event of such liquidation, dissolution or
winding up, plus all other amounts to be payable per share in respect of the
Common Stock in liquidation under the charter, assuming for the purposes of
this clause (d) that all of the shares of Common Stock then issuable upon
exercise of all of the Warrants are outstanding at the Determination Date.

                    1.5.
Company Acknowledgment. The Company will, at the time of the exercise of
the Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to
afford to such Holder any such rights.

                    1.6.
Trustee for Warrant Holders. In the event that a bank or trust company
shall have been appointed as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and
duties of a warrant agent (as hereinafter described) and shall accept, in its
own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1. 

                    1.7
Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall
be deemed to be issued to the Holder hereof as the record owner of such shares
as of the close of business on the date on which payment shall have been made
for such Warrant Shares as aforesaid. As soon as practicable after the exercise
of this Warrant in full or in part, and in any event within three (3) business
days thereafter (“Warrant Share Delivery Date”), the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock
or other securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

                    1.8
Shareholder Approval. If required by the applicable NASD Market Place
Rules and/or Nasdaq’s corporate governance rules, and notwithstanding anything
to the contrary herein, (i) until the Company either obtains shareholder approval
of the issuance of the Securities, or (ii) an exemption from NASDAQ’s corporate
governance rules as they may apply to the Warrant Shares, and an opinion from
counsel reasonably acceptable to Subscriber that the issuance of the Warrant
Shares will not violate NASDAQ’s corporate governance rules nor may result in a
delisting of the Company’s common stock from the SmallCap, the Holder may not
receive any Warrant Shares.

          2.
Cashless Exercise.

                    (a)
If a Registration Statement (as defined in the Subscription Agreement)
(“Registration Statement”) is effective and the Holder may sell its shares of
Common Stock upon exercise hereof pursuant to the Registration Statement, this
Warrant may be exercisable in whole or in part for cash only as set forth in
Section 1 above. If no such Registration Statement is available, then
commencing six months after the Closing Date payment upon exercise may be made
at the option of the Holder either in (i) cash, by wire transfer or
certified or official bank check payable to the order of the Company equal to
the applicable aggregate Purchase Price, (ii) by cashless exercise in
accordance with

3

Section (b) below
or (iii) by a combination of any of the foregoing methods, for the number
of Common Stock specified in such form (as such exercise number shall be
adjusted to reflect any adjustment in the total number of shares of Common
Stock issuable to the holder per the terms of this Warrant) and the holder
shall thereupon be entitled to receive the number of duly authorized, validly
issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.

                    (b)
If the Notice of Exercise form elects a “cashless” exercise, the Holder shall
thereby be entitled to receive a number of shares of Common Stock equal to (x)
the excess of the Current Market Value (as defined below) over the total cash
exercise price of the portion of the Warrant then being exercised, divided by
(y) the Market Price of the Common Stock as of the trading day immediately
prior to the date of exercise. For the purposes of this Warrant, the term
“Current Market Value” shall be an amount equal to the Market Price of the
Common Stock as of the trading day immediately prior to the Exercise Date,
multiplied by the number of shares of Common Stock specified in such Notice of
Exercise Form, and “Market Price of the Common Stock” shall be the average of
the closing bid price of the Common Stock (as reported by Bloomberg L.P. for
the Principal Market) for the 5 Trading days prior to the exercise date.

                    (c)
For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Subscription
Agreement.

          3.
Adjustment for Reorganization, Consolidation, Merger, etc.

                    3.1. Reorganization,
Consolidation, Merger, etc. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other person or (c) transfer all or substantially all of
its properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate provision
shall be made by the Company whereby the Holder of this Warrant, on the
exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.

                    3.2.
Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrants after the effective date
of such dissolution pursuant to this Section 3 to a bank or trust company
(a “Trustee”) having its principal office in New York, NY, as trustee for
the Holder of the Warrants. 

                    3.3.
Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution following
any such transfer, as the case may be, and shall be binding upon the issuer of
any Other Securities, including, in the case of any such

4

transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 4. In the event this Warrant does not
continue in full force and effect after the consummation of the transaction
described in this Section 3, then only in such event will the Company’s
securities and property (including cash, where applicable) receivable by the
Holder of the Warrants be delivered to the Trustee as contemplated by
Section 3.2.

                    3.4
Share Issuance. Until the Expiration Date, if the Company shall issue
any Common Stock except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price that would be in effect at the time
of such issue, then, and thereafter successively upon each such issue, the
Purchase Price shall be reduced to such other lower price for then outstanding
Warrants. For purposes of this adjustment, the issuance of any security or debt
instrument of the Company carrying the right to convert such security or debt
instrument into Common Stock or of any warrant, right or option to purchase
Common Stock shall result in an adjustment to the Purchase Price upon the
issuance of the above-described security, debt instrument, warrant, right, or
option if such issuance is at a price lower than the Purchase Price in effect
upon such issuance and again at any time upon any subsequent issuances of
shares of Common Stock upon exercise of such conversion or purchase rights if such
issuance is at a price lower than the Purchase Price in effect upon such
issuance. Common Stock issued or issuable by the Company for no consideration
will be deemed issuable or to have been issued for $0.01 per share of Common
Stock. Upon any reduction of the Purchase Price, the number of shares of Common
Stock that the Holder of this Warrant shall thereafter, on the exercise hereof,
be entitled to receive shall be adjusted to a number determined by multiplying
the number of shares of Common Stock that would otherwise (but for the
provisions of this Section 3.4) be issuable on such exercise by a fraction of
which (a) the numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 3.4) be in effect, and (b) the denominator is the
Purchase Price in effect on the date of such exercise.

          4.
Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a
dividend or other distribution on outstanding Common Stock, (b) subdivide
its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common Stock,
then, in each such event, the Purchase Price shall, simultaneously with the happening
of such event, be adjusted by multiplying the then Purchase Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Purchase Price then
in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Common Stock that the Holder of
this Warrant shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be adjusted to a number determined
by multiplying the number of shares of Common Stock that would otherwise (but
for the provisions of this Section 4) be issuable on such exercise by a
fraction of which (a) the numerator is the Purchase Price that would
otherwise (but for the provisions of this Section 4) be in effect, and
(b) the denominator is the Purchase Price in effect on the date of such
exercise.

          5.
Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrants, the Company at its expense will promptly cause
its Chief Financial Officer or other appropriate designee to compute such
adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to

5

have been
issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such adjustment or readjustment
and as adjusted or readjusted as provided in this Warrant. The Company will
forthwith mail a copy of each such certificate to the Holder of the Warrant and
any Warrant Agent of the Company (appointed pursuant to Section 11
hereof).

          6.
Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements. The Company will at all times reserve and keep available,
solely for issuance and delivery on the exercise of the Warrants, all shares of
Common Stock (or Other Securities) from time to time issuable on the exercise
of the Warrant. 

          7.
Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”). On the surrender
for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together
with an opinion of counsel reasonably satisfactory to the Company that the
transfer of this Warrant will be in compliance with applicable securities laws,
the Company at its expense, twice only, but with payment by the Transferor of
any applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant so surrendered by the Transferor. No such transfers shall
result in a public distribution of the Warrant.

          8.
Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

          9.
Registration Rights. The Holder of this Warrant has not been granted
registration rights by the Company. 

          10.
Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date. For the purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be
limited to aggregate exercises which would result in the issuance of more than
4.99%. The Holder may decide whether to convert a Note or exercise this Warrant
to achieve an actual 4.99% ownership position.

          11.
Warrant Agent. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and

6

replacing this
Warrant pursuant to Section 8, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such Warrant Agent. 

          12.
Transfer on the Company’s Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary. 

          13.
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur or (c) three business days
after deposited in the mail if delivered pursuant to subsection (ii) above. The
addresses for such communications shall be: (i) if to the Company to: Conolog
Corporation, 5 Columbia Road, Somerville, NJ 08876, Attn: Robert Benou,
telecopier: (908) 722-5461, with a copy by telecopier only to: Sichenzia, Ross,
Friedman & Ference LLP, 61 Broadway, 32nd Floor, New York, NY 10006, Attn:
David Manno, Esq., telecopier number: (212) 930-9725, and (ii) if to the Holder,
to the addresses and telecopier number set forth in the first paragraph of this
Warrant, with an additional copy by telecopier only to: Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier
number: (212) 697-3575.

          14.
Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. Any dispute relating to this Warrant shall be
adjudicated in New York County in the State of New York. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision. 

7

          IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above. 

	
  

 	
  

 	
  

 
	
  

 	
 CONOLOG
 CORPORATION

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: 

 
	
  

 	
  

 	
 Title: 

 

8

Exhibit A
FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO: CONOLOG
CORPORATION 

The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):

___          ________
shares of the Common Stock covered by such Warrant; or

___          the
maximum number of shares of Common Stock covered by such Warrant pursuant to
the cashless exercise procedure set forth in Section 2.

The
undersigned herewith makes payment of the full purchase price for such shares
at the price per share provided for in such Warrant, which is $___________.
Such payment takes the form of (check applicable box or boxes):

___          $__________ in lawful money of the
United States; and/or

___          the
cancellation of the Warrant to the extent necessary, in accordance with the
formula set forth in Section 2, to exercise this Warrant with respect to
the maximum number of shares of Common Stock purchasable pursuant to the
cashless exercise procedure set forth in Section 2.

The
undersigned requests that the certificates for such shares be issued in the name of, and delivered to 
___________________________________________________________________________
whose address is __________________________________________________________________________________________________________________________________ ________________________________________
Number of Shares of Common Stock Beneficially Owned on the date of exercise:
Less than five percent (5%) of the outstanding Common Stock of Conolog
Corporation

The
undersigned represents and warrants that the representations and warranties in
Section 4 of the Subscription Agreement (as defined in this Warrant) are true
and accurate with respect to the undersigned on the date hereof.

The
undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption
from registration under the Securities Act.

	
  

 	
  

 	
  

 
	
 Dated:
 __________________

 	
  

 	

 

 
	
  

 	
  

 	
 (Signature
 must conform to name of holder as specified on the face of the Warrant)

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 (Address)

 

9

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

          For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of CONOLOG CORPORATION to which the within Warrant relates specified
under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of CONOLOG
CORPORATION with full power of substitution in the premises.

	
  

 	
  

 	
  

 
	
 Transferees 

 	
 Percentage Transferred 

 	
 Number Transferred 

 
	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 

	
  

 	
  

 	
  

 
	
 Dated:
 ______________, ___________

 	
  

 	

 

 
	
  

 	
  

 	
 (Signature
 must conform to name of holder as specified on the face of the warrant)

 
	
  

 	
  

 	
  

 
	
 Signed in
 the presence of:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	

 

 
	
                (Name)

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
                (address)

 
	
 ACCEPTED AND
 AGREED:

 	
  

 	
  

 
	
 [TRANSFEREE]

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	

 

 
	
                (Name)

 	
  

 	
                (address)

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