EX-10.1






Exhibit 10.1




8% CONVERTIBLE PROMISSORY NOTE




£150,000.00


August      , 2005



FOR VALUE RECEIVED, the adequacy of which is hereby acknowledged, the undersigned, ELCOM
INTERNATIONAL, INC., a Delaware corporation, whose principal address is 10 Oceana Way, Norwood,
Massachusetts 02062 (“Maker”), promises to pay to
     , a
     , whose principal address is
     (“Payee”), the entire aggregate
principal amount of One Hundred Thousand [Pounds Sterling] (£150,000.00), pursuant to the terms and
conditions contained herein, together with interest thereon at the rate hereinafter provided, in
accordance with the following.



1. Principal and Interest. The principal amount of this Note and all interest accrued
thereon shall be due and payable in one installment within three business days after Maker records
two sequential quarters of profitability with respect to its continuing operations (i.e. net income
from continuing operations), as certified by Maker’s Chief Financial Officer (the “Maturity Date”),
unless and to the extent that this Note shall have been previously converted pursuant to Section 3
hereof, in which case all outstanding principal under this Note and all interest accrued thereon
shall be satisfied in full by virtue of such conversion and issuance and delivery of fully paid and
non-assessable shares of Maker’s common stock, par value $.01 per share (“Common Stock”), to Payee,
all as set forth in Section 3 hereof. Interest on the principal amount of this Note shall accrue
at the rate of Eight Percent (8.0%) per annum commencing as of the date hereof and continuing until
all principal and accrued interest owing under this Note is paid in full. Interest shall be
calculated upon a year of 360 days for the actual number of days elapsed.



2. Payment. In the event this Note is not converted pursuant to Section 3, all
principal and all accrued interest due hereunder shall be payable on the Maturity Date in sterling
(or by Maker’s check payable in such money) to Payee in person or at Payee’s address (as given
above) or at such other place as Payee or any other holder of this Note may designate in writing to
Maker. Alternatively, Payee may designate a bank account into which Maker shall wire transfer
payments of principal and interest. To the extent payment becomes due and payable under this Note
on a day which is not a business day, such payment is and shall be due and payable on the next
succeeding business day.



3. Conversion.



(a) Mandatory Conversion. The outstanding principal on this Note and all interest
accrued thereon shall be converted into shares of Common Stock, as soon as practicable after the
occurrence of the “AIM Financing” (as defined below), at the same per share purchase price of the
Common Stock in the AIM Financing. For clarity, upon conversion of this Note pursuant to this
subsection 3(a), this Note shall be converted into that number of shares of Common Stock equal to
the quotient obtained by dividing (i) the sum of the outstanding principal on this Note and all
Accrued Interest by (ii) the per share purchase price of the Common Stock sold in the AIM
Financing. The term “AIM Financing” as used herein shall refer to the sale by Maker of Common
Stock in a single transaction or a series of related transactions, to non-U.S. persons outside the
U.S. pursuant to Regulation S promulgated under the Securities Act of 1933, as amended (the
“Securities Act”).



(b) Fractional Shares. Maker shall not be required to issue fractional shares of
Common Stock upon the conversion of this Note. If Payee would be entitled, upon the exercise of
any rights evidenced hereby, to receive a fractional interest in a share of Common Stock, in lieu
thereof Payee shall be entitled to receive from Maker an amount in cash equal to that portion
attributable to such fractional share.



(c) Other Matters. Maker covenants that the shares of AIM Financing Securities issued
upon the conversion of this Note will (i) when issued upon such conversion, be validly issued,
fully paid and non-assessable and (ii) be issued in reliance upon the exemption from the
registration and prospectus delivery requirements provided by Regulation S promulgated under the
Securities Act.



4. Representations and Warranties of Maker. Maker hereby represents and warrants
that: (a) Maker is duly organized, validly existing and in good standing under the laws of the
state of Delaware; (b) the execution, delivery and performance of this Note by Maker have been duly
authorized by all necessary action, corporate or otherwise, of Maker and are not in contravention
of any of its Certificate of Incorporation, Bylaws or any agreements to which it is a party or by
which any of its property is bound; and (c) this Note is the legal, valid and binding obligation of
Maker, enforceable against Maker in accordance with its terms.



5. Representations and Warranties of Payee. Payee hereby represent and warrants that:
(a) it is not a U.S. person; (b) will resell shares of Common Stock only in accordance with
Regulation S, pursuant to registration or an exemption therefrom; and (c) will not engage in
hedging transactions with regard to shares of Common Stock unless in compliance with the Securities
Act.



6. Events of Default. The then-outstanding principal and accrued interest on this
Note shall, at the option of Payee, become due and payable without notice or demand, upon the
happening of any one of the following specified events:




	 	(a)	 	the making of a general assignment for the benefit of creditors by Maker;






	 	(b)	 	the voluntary filing of any petition or the commencement of any proceeding by
Maker for any relief under any bankruptcy or insolvency laws, or any laws relating to
the relief of debtors, readjustment of indebtedness, reorganizations, compositions, or
extensions; or






	 	(c)	 	the involuntary filing of any petition or the commencement of any proceeding
against Maker for any relief under any bankruptcy or insolvency laws, or any laws
relating to the relief of debtors, readjustment of indebtedness, reorganizations,
compositions, or extensions, which proceeding is not dismissed within 30 days.





7. Security. This Note is secured pursuant to that certain Amended and Restated
Collateral Agency and Security Agreement, among the Maker and each of the Secured Parties named
therein, which is incorporated herein by reference as if fully set forth herein.



8. Cancellation. After all principal and accrued interest at any time owed on this
Note has been paid in full, this Note shall be surrendered to Maker for cancellation and will not
be reissued.



9. Expenses of Collection. Maker agrees to pay Payee’s reasonable costs in collecting
and enforcing this Note, including reasonable attorney’s fees.



10. Waiver by Payee. No waiver of any obligation of Maker under this Note shall be
effective unless it is in a writing signed by Payee. A waiver by Payee of any right or remedy
under this Note on any occasion shall not be a bar to exercise of the same right or remedy on any
subsequent occasion or of any other right or remedy at any time.



11. Notice. Any notice required or permitted under this Note shall be in writing and
shall be deemed to have been given on the date of delivery, if personally delivered to the party to
whom notice is to be given, or on the fifth business day after mailing, if mailed to the party to
whom notice is to be given, by certified mail, return receipt requested, postage prepaid, and
addressed as follows:



if to Maker, at



Elcom International, Inc.



10 Oceana Way



Norwood, Massachusetts, 02062



Attn: President



if to Payee, to



     



     



     



12. Waiver by Maker. Maker hereby expressly waives presentment, demand, and protest,
notice of demand, dishonor and nonpayment of this Note, and all other notices or demands of any
kind in connection with the delivery, acceptance, performance, default or enforcement hereof.



13. Severability. If any one or more of the provisions of this Note shall for any
reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or
if any one or more of the provisions of this Note operate or would prospectively operate to
invalidate this Note, then and in any such event, such provision(s) only shall be deemed null and
void and shall not affect any other provision of this Note and the remaining provisions of this
Note shall remain operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby.



14. Governing Law. This Note shall be governed by and construed in accordance with the
laws of England and the parties submit to the non-exclusive jurisdiction of the English courts.



IN WITNESS WHEREOF, Maker has executed this Note as of the date first above written.



ELCOM INTERNATIONAL, INC.



     



By: Robert J. Crowell

Its: Chairman and Chief Executive Officer




     



By:



Its: