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 requi
