Exhibit 10.1

      Amendment  dated as of June 1, 2002, to Agreement dated November 28, 2001,
by and between  Tel-Instrument  Electronics  Corp.  ("Tel" or the "Company") and
Semaphore Capital Advisors, LLC ("Semaphore").

      WHEREAS Tel and Semaphore (previously known as Crary Partners LLC) entered
into a letter  agreement,  dated November 28, 2001 (the  "November  Agreement"),
which provided, inter alia, for Semaphore to render specified financial services
to Tel, in consideration for the compensation set forth therein, and

      WHEREAS  Tel and  Semaphore  desire to amend  the  November  Agreement, as
hereinafter set forth;

      NOW, THEREFORE, it is hereby agreed by and between Tel and Semaphore,  for
valuable  consideration  the  receipt  of which is hereby  acknowledged  by both
parties, as follows:

      1.  Section II of the  November  Agreement  is hereby  amended by deleting
subsection (i) thereof and substituting the following paragraphs:

            (i) (a)  Monthly  Payments.  Tel shall pay  Semaphore  a retainer of
      $10,000 per month, for each of six (6) months commencing with the month of
      June 2002, and ending with the month of November,  2002, in  consideration
      of Semaphore  providing the services set forth in the November  Agreement,
      as supplemented by the services set forth in this Amendment. In December,
<PAGE>

      2002,  the  parties  shall  review the  services  provided to that date by
      Semaphore,  and their  result,  and consider  the  question of  additional
      monthly payments for subsequent months.

            The  retainer is intended to  compensate  Semaphore  for  investment
      banking services,  particularly those described in subparagraphs (i), (ii)
      and (iii) in Section 1 of the November Agreement,  as amended. The Company
      considers time of the essence in connection with these services and if, in
      the Company's reasonable judgment, Semaphore has not provided the services
      contemplated  hereunder in a diligent manner, the Company may exercise its
      termination  rights any time after  sixty days from the date  hereof,  and
      after such  termination,  no further amounts  specified in this subsection
      (i) shall be due and payable.  In the event that  Semaphore  exercises its
      termination  rights,  no further  amounts under this  subsection (i) shall
      become due and payable.

            (b) Credits.  The entire  amount of retainer  payments  made by Tel,
      pursuant to subparagraph (a) above,  shall be credited against,  and shall
      reduce  amounts  otherwise  payable by Tel to  Semaphore as a Success Fee,
      pursuant to Section II (ii) of the November Agreement,  as amended by this
      Amendment  Agreement;  Provided that there shall be no credit or reduction
      of the Success Fee  pursuant to this  subparagraph  (b) until the value of
      all Transactions and Aggregate Consideration of all investments exceeds $2
      million,  and Provided  further,  that no such credits shall be applied if
      they reduce cash Success Fees


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<PAGE>

      payable  hereunder  to  Semaphore  below the Minimum  Amount  specified in
      paragraph 5 of this Amendment Agreement. If a Transaction or investment is
      completed,  and a Success Fee paid to Semaphore  without reduction for the
      monthly retainer amounts,  pursuant to this subparagraph (b), then, in the
      event  of  another   Transaction  or  investment  being   concluded,   all
      Transactions   and  investments   pursuant  to  this  Agreement  shall  be
      aggregated and the Success Fee required by this  subparagraph (b) shall be
      recalculated.

      2. Section II of the November Agreement shall be further amended by adding
a new subsection,  following subsection (ii), and designated subsection "(iii)",
as follows:

            (iii) BCG. In recognition  of the fact that Tel identified  BCG, and
      already has done a substantial  amount of due diligence in connection with
      BCG,  Tel shall pay  Semaphore a different  Success Fee in respect of BCG,
      than  the  Success  Fee  payable  under   subsection  (ii)  on  all  other
      Transactions or investments.  Tel shall pay a Success Fee upon the closing
      of a  Transaction  in  respect  of BCG,  in an  amount  equal to 4% of the
      Aggregate Consideration paid by Tel, rather than the Success Fee set forth
      in subsection  (ii) above,  plus  warrants,  as defined and  calculated in
      Paragraph  3 of this  Amendment.  In no event  will the cash  Success  Fee
      payable in respect of BCG be less than $50,000.


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<PAGE>

      3. Section II (iii) of the November  Agreement is hereby deleted and a new
subsection (iii), now designated "subsection iv", shall be added as follows:

            (iv) Warrants. In connection with a Success Fee payable as set forth
      in subsections (ii) or (iii) above, Tel shall also issue to Semaphore,  as
      a Success  Fee,  warrants to  purchase  its common  stock,  with usual and
      customary  rights,  terms and  conditions  (to be  covered  in a  separate
      warrant purchase agreement).

            The  warrants  issuable  shall have an  exercise  price of $2.30 per
      share, if issued prior to June 1, 2003, and thereafter the exercise price,
      shall  be at the  average  of the  bid and  asked  prices  on the  date of
      issuance, as quoted in the over the counter market.

            Semaphore shall be issued  warrants under this  subsection  equal to
      (a) 5% of the value up to and including $4 million,  of  Transactions  and
      the  Aggregate  Considerations  of  investments,  other than a Transaction
      involving BCG; (b) 3% of Transactions  and the Aggregate  Consideration of
      investments,  on the excess over $4 million (excluding BCG) and (c) 2-1/2%
      of the value of a Transaction involving BCG.

            The amount of warrants to which  Semaphore is  entitled,  under this
      subsection   shall  be  equal  to  (x)  the  Aggregate   Consideration  of
      investments,  and  the  value  of  Transactions,  (y)  multiplied  by  the
      applicable  warrant percentage as set forth above (5%, 3% or 2-1/2% as the
      case may be) and then


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<PAGE>

            (z) the result divided by the warrant exercise price, which shall be
      $2.30  per share  until  June 1,  2003.  For  example,  in the event of $5
      million of  Transactions,  prior to December 31, 2002,  Semaphore would be
      entitled to warrants to purchase  100,000 shares of Tel common stock at an
      exercise price of $2.30 per share ($4 million of  transactions x 5% / 2.30
      = 86,957  warrants  plus $1 million of  transactions  x 3% / 2.30 = 13,043
      warrants.)

      4. Subsection (iii) and (iv) of Section II of the November Agreement shall
be renumbered "(v)".

      5. Section II of the November Agreement shall be further amended by adding
a new subsection "(vi)", as follows:

            "(vi).  Minimum  Fee.  Semaphore's  cash  Success Fee to which it is
      entitled,  pursuant to this Agreement,  shall in no event be less than (1)
      $50,000,  in the event of a BCG Transaction or (b) $100,000 for each other
      Transaction,  or investment.  After Semaphore has received its minimum fee
      on a Transaction or investment,  the aggregate  Success Fee to which it is
      entitled  hereunder  shall be  recalculated  on an  aggregate  basis,  and
      credits shall be applied for retainer  amounts paid pursuant to subsection
      (i)  and  for any  other  prior  payments  made  by Tel  pursuant  to this
      Agreement.


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<PAGE>

      6. Semaphore shall be the exclusive financial advisor to the company for a
period of six (6) months,  and the term of this  Agreement  shall be extended to
twelve  (12)  months,  commencing  on the date as of  which  this  amendment  is
executed by both parties,  provided  however that either party may withdraw from
and  terminate the November  Agreement as amended,  at any time upon thirty (30)
days written notice to the other party. Semaphore shall provide the services set
forth in  Section  I of the  November  Agreement  and  shall be  compensated  in
accordance with Section II, except the parties agree that in the event Semaphore
is unable to render a fairness opinion on any Transaction or investment  because
of exceptional  circumstances,  such as questions arising outside of Semaphore's
expertise,  then the parties  will in good faith review the matter and use their
best  efforts  to reach an  accommodation  that  takes  into  consideration  the
interests of both parties. The parties also acknowledge that the first paragraph
of the November  Agreement,  which defines a Transaction  in terms of "any other
financial transactions",  includes joint ventures and strategic partnerships, so
that if such a  Transaction  is  closed  with a  Candidate,  as  defined  in the
November  Agreement, then Semaphore  would be entitled to the  compensation  set
forth in Section II.

      7.  Semaphore  represents  and  warrants to Tel that (a)  Semaphore is the
successor  in interest to Crary  Partners  LLC,  the  signatory  to the November
Agreement,  and has all of the rights,  title,  interest  and duties which Crary
Partners LLC had under that  agreement,  (b) it has the  obligation  to and will
perform the duties required to be performed


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<PAGE>

by Crary  Partners  LLC under the November  Agreement  and (c) Tel will incur no
claim from or liability to Crary Partners LLC, its partners,  members, assignees
or successors,  in connection  with or growing out of Tel dealing with Semaphore
as the other party to the November Agreement.  Semaphore will indemnify and hold
Tel harmless from and against any and all costs,  expenses and damages including
reasonable  attorneys  fees,  arising or resulting from or in connection  with a
breach or claimed breach of this  Paragraph.  Semaphore's  indemnity  obligation
includes the  obligation to defend at its cost, any such claim made against Tel,
its officers,  directors and  representatives.  The rights and obligations under
this  Paragraph  are in addition  to any and all other  rights Tel has under the
November Agreement, this Amendment or otherwise.

      The Assignment to Semaphore does not waive, qualify or limit the provision
in  Section  IV of the  November  Agreement  prohibiting  assignments,  and  any
attempted  further  assignment or transfer will be  ineffective  to transfer any
right or interest in the November Agreement as amended.

      8. Terms and provisions  defined in the November  Agreement shall have the
same meaning when used in this Amendment Agreement.

      9. The November  Agreement and all its terms and provisions,  are still in
full force and effect and  binding on the  parties,  unless  expressly  changed,
modified or deleted by this Amendment  Agreement,  except that all references to
Crary Partners LLC shall be deemed to refer to Semaphore.


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<PAGE>

      WHEREFORE  the  undersigned   parties  have  executed  and  accepted  this
Amendment Agreement as of June 1, 2002.

                                    TEL-INSTRUMENT ELECTRONICS CORP.

                                    By: HAROLD K. FLETCHER
                                        ----------------------------------------
                                                       President

Dated: New York, New York
       June 10, 2002
                                    SEMAPHORE CAPITAL ADVISORS, LLC

                                    By:
                                        ----------------------------------------
                                                       (Office)


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<PAGE>

      WHEREFORE  the  undersigned   parties  have  executed  and  accepted  this
Amendment Agreement as of June 1, 2002.

                                    TEL-INSTRUMENT ELECTRONICS CORP.

                                    By:
                                        ----------------------------------------
                                                       President

Dated: New York, New York
       June   , 2002
                                    SEMAPHORE CAPITAL ADVISORS, LLC

                                    By: [ILLEGIBLE]
                                        ----------------------------------------
                                              (Office) Partner


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