LIMITED STANDSTILL AGREEMENT
This AGREEMENT (the "Agreement") is made as of the 30th day of July, 2004,
by the signators hereto (each a "Holder"), in connection with his ownership of
shares of Conolog Corporation, a Delaware corporation (the "Company").
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which consideration are hereby acknowledged, Holder agrees as
follows:
1. Background.
a. Holder is the beneficial owner of the amount of shares of the
Common Stock, $.001 par value, of the Company ("Common Stock").
x. Xxxxxx acknowledges that the Company has entered into or will enter
into agreements with subscribers to the Company's Common Stock and Warrants (the
"Subscribers"), for the sale of an aggregate of up to $688,500 of Common Stock
and Warrants to the Subscribers (the "Offering"). Holder understands that, as a
condition to proceeding with the Offering, the Subscribers have required, and
the Company has agreed to assist the Subscribers in obtaining, an agreement from
the Holder to refrain from selling any securities of the Company for a period of
time from the present until the sooner of (i) ninety (90) days after the
registration statement covering the securities sold in the Offering has been
effective under the Securities Act of 1933 (the "Act"), (ii) two (2) years after
the Closing Date (as defined in the Subscription Agreement) (the "Restriction
Period"), (iii) Subscribers no longer own any Securities (as defined in the
Subscription Agreement), or (iv) by operation of law, provided that any
distributee agrees to be subject to this Agreement.
2. Share Restriction.
a. Holder hereby agrees that during the Restriction Period, the Holder
will not sell or otherwise dispose of any shares of Common Stock or any options,
warrants or other rights to purchase shares of Common Stock or any other
security of the Company which Holder owns or has a right to acquire as of the
date hereof, other than (i) in connection with an offer made to all shareholders
of the Company or any merger, consolidation or similar transaction involving the
Company, or (ii) with the prior written consent of the Subscribers, which shall
not be unreasonably withheld. Holder further agrees that the Company is
authorized to and the Company agrees to place "stop orders" on its books to
prevent any transfer of shares of Common Stock or other securities of the
Company held by Holder in violation of this Agreement.
b. Any subsequent issuance to and/or acquisition of shares by Holder
will be subject to an additional ninety (90) day lockup from the date of such
issuance or acquisition.
3. Miscellaneous.
a. At any time, and from time to time, after the signing of this
Agreement Holder will execute such additional instruments and take such action
as may be reasonably requested by the Subscribers to carry out the intent and
purposes of this Agreement.
b. This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of New York, except to the extent that the
securities laws of the state in which Holder
resides and federal securities laws may apply.
c. This Agreement contains the entire agreement of the Holder with
respect to the subject matter hereof.
d. This Agreement shall be binding upon Holder, its legal
representatives, successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Holder
has executed this Agreement as of the day and year first above written.
HOLDER:
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(Signature of Holder)
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(Print Name of Holder)
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Number of Shares of Common Stock
Beneficially Owned
COMPANY:
CONOLOG CORPORATION
By:
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