EXHIBIT 10.1

                                   DEMAND NOTE

$200,000.00                                        July 11, 2001

         FOR VALUE RECEIVED, MICROLOG CORPORATION, a Virginia corporation, and
MICROLOG CORPORATION OF MARYLAND, a Maryland corporation (the "Borrowers")
hereby promise to pay to the order of TFX EQUITIES INCORPORATED, a Delaware
corporation ("Payee") on demand the principal sum of Two Hundred Thousand and
no/100 Dollars ($200,000.00) together with interest thereon as hereinafter
provided.

Interest. The Borrowers will pay interest on the outstanding principal balance
hereof at the rate of 12% per annum, payable monthly on the first day of each
month commencing August 1, 2001 and continuing on the first day of each month
thereafter until the outstanding balance of principal hereof shall be paid in
full. Interest shall be calculated on the basis of a year of 360 days divided
into 12 months of 30 days each, except that interest for any period of less than
a month shall be calculated on the basis of a year of 365 days for the actual
number of days elapsed.

Optional Prepayment of Principal. The Borrowers may prepay the principal hereof
in whole or in part at any time and from time to time without premium or
penalty. All prepayments will be applied to mandatory principal payments payable
hereunder in the inverse order of maturity.

Place and Form of Payment. All amounts payable hereunder shall be paid in lawful
currency of the United States of America at the principal office of the Payee
(which presently is located at 1105 N. Market Street, Suite 1300, Wilmington, DE
19899) against presentment hereof; provided that, unless Payee shall otherwise
request, the Borrowers will pay all amounts due hereunder (except the final
payment of principal, which shall be paid only against presentment and surrender
of this Note) by check payable to the order of Payee and mailed to Payee at
least one day before such amount shall be due.

Default. Upon the occurrence of any one or more of the following events (each of
which will constitute an Event of Default) or at any time thereafter while such
default remains uncured, Payee may declare the entire unpaid balance of
principal of and interest on this Note to be immediately due and payable:

              (a)  The  failure  by the  Borrowers  to pay  any  installment  of
principal of or interest on this Note when due,  within 30 days after it becomes
due;

              (b) The entry of a final judgment for the payment of money against
the Borrowers which, within 60 days after such entry, shall not have been
discharged or execution thereof stayed pending appeal or shall not have been
discharged within 60 days after the expiration of any such stay;

              (c) The issue of attachment, garnishment or any execution process
or the making of any levy against any property of the Borrowers and within 60
days thereafter (but prior to any sale or other disposition pursuant to such
process) such attachment, garnishment, execution process or levy shall not have
been discharged; or

              (d) The entry of an order for relief against the Borrowers in an
involuntary case under the Federal Bankruptcy Code, or the entry of any order
adjudicating the Borrowers a bankrupt or insolvent under any similar bankruptcy
or insolvency law, or the entry of an order appointing a receiver or trustee for
the Borrowers or any of their property or approving a petition seeking
reorganization, dissolution, liquidation or other similar relief under the
bankruptcy or other similar laws of the United States or any state or other
jurisdiction, or the filing by the Borrowers of a petition commencing a
voluntary proceeding under any such law or a petition, answer or other document
seeking or consenting to any of the foregoing, or the filing by the Borrowers of
a petition to take advantage of any debtor's act or the making by the Borrowers
of a general assignment for the benefit of creditors or admitting in writing
their inability to pay their debts as they mature.

Default Rate of Interest. If any payment of interest, principal or other amount
is not paid within ten (10) days after the same becomes due, interest shall
thenceforth accrue thereon at a rate of 5 percentage points (5%) greater than
the rate stated above; provided that interest shall not accrue at a rate greater
than the highest lawful rate under the laws of the Commonwealth of Pennsylvania.

Expenses of Enforcement. The Borrowers will pay all reasonable expenses of
Payee, including reasonable attorneys' fees, incurred by Payee in enforcing its
rights and remedies hereunder together with interest thereon at the Default
Rate. If Payee brings suit (or files any claim in any bankruptcy,
reorganization, insolvency or other proceeding) to enforce any of its rights
hereunder and shall be entitled

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              to judgment (or other recovery) in such action (or other
proceeding) then Payee may recover, in addition to all other amounts payable
hereunder, its reasonable expenses in connection therewith, including reasonable
attorneys' fees, and the amount of such expenses shall be included in such
judgment (or other form of award).

Delay or Omission Not Waiver. No delay or omission on the part of Payee to
exercise any right upon the occurrence of any Event of Default will impair any
such right or will be construed to be a waiver of any such default or any
acquiescence therein. No waiver of any default hereunder will affect any later
default or will impair any of Payee's rights hereunder. No single, partial or
other exercise of any right by Payee will preclude any further or other exercise
thereof.

Notice. Any notice, declaration or other communication ("Notice") given or made
pursuant hereto or in respect hereof shall be in writing. If given to Payee any
such Notice shall be duly and validly given if delivered, or mailed in the
continental United States first class postage prepaid to Payee at its principal
office stated above or such principal office hereafter established of which
Payee shall have given notice to the Borrowers. If given to the Borrowers such
Notice shall be valid only if delivered to Microlog Corporation at its principal
office (which presently is located at 20270 Goldenrod Lane, Germantown, MD
20876) and Microlog Corporation of Maryland at its principal office (which
presently is located at 20270 Goldenrod Lane, Germantown, MD 20876) or such
principal office or offices hereafter established of which the Borrowers shall
have given Notice to Payee.

              Governing Law. This Note shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

Headings Not Part of Note. The headings of sections and paragraphs hereof are
inserted for convenience of reference only, shall not be deemed a part of this
Note and shall not affect its interpretation or construction.

         IN WITNESS WHEREOF, the Borrowers has caused this Note to be executed
by its duly authorized officer named below.

                                               MICROLOG CORPORATION


                                               By: /s/ John C. Mears
                                                   -----------------------------
                                               Name:  John C. Mears
                                               Title: President and CEO

                                               MICROLOG CORPORATION OF MARYLAND


                                               By: /s/ John C. Mears
                                                   -----------------------------
                                               Name:  John C. Mears
                                               Title: President and CEO


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