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Exhibit 10.1
8% CONVERTIBLE PROMISSORY NOTE
£_______________ September ____, 2005
FOR VALUE RECEIVED, the adequacy of which is hereby acknowledged, the undersigned, ELCOM INTERNATIONAL,
INC., a Delaware corporation, whose principal address is 00 Xxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 ("Maker"),
promises to pay to ________________________________________________________________, a
_________________________________________________________, whose principal address is
_________________________________________________________________ ("Payee"), the entire aggregate principal
amount of __________________________________________, 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 upon written demand by Payee in one installment within five business days after Maker notifies Payee
that it has adequate funds to repay this note (the "Maturity Date"). 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, Xxxxx 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. Optional Conversion.
(a) Optional Conversion. The outstanding principal on this Note and all interest accrued thereon shall be
converted at the option of the Payee into shares of common stock, par value $.01 per share ("Common Stock"), at
the same per share purchase price of the Common Stock in the AIM Financing (as defined below). 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").
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(b) Fractional Shares. Maker shall not be required to issue fractional shares of Common Stock upon the
conversion of this Note. If Xxxxx 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.
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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. Xxxxx agrees to pay Xxxxx's reasonable costs in collecting and enforcing this
Note, including reasonable attorney's fees.
10. Waiver by Xxxxx. No waiver of any obligation of Maker under this Note shall be effective unless it is
in a writing signed by Xxxxx. 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.
00 Xxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx, 00000
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.
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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: Xxxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
_______________________________
By:
Its:
