EXHIBIT 10.18
THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT IN FAVOR OF KEYBANK
NATIONAL ASSOCIATION. A COPY MAY BE OBTAINED UPON REQUEST TO A MEMBER OF THE
MAKER BY CALLING (212) 551-0117.
SUBORDINATED SECURED PROMISSORY NOTE
$685,694.87 SEPTEMBER 28, 2002
FOR VALUE RECEIVED, STRATEGIC TECHNICAL ALLIANCE, LLC, a limited liability
company organized under the laws of the State of Delaware ( the "Maker,") hereby
promises to pay to the order of BURLINGTON INDUSTRIES, INC. or assigns (the
"Holder,") the principal sum of six hundred eighty five thousand-six
hundred-ninety five dollars.
1. MATURITY DATE. All principal and accrued but unpaid interest shall be
due to the Holder on the second anniversary of the original date of
issuance of this Note (the "Maturity Date.")
2. PAYMENT OF PRINCIPAL. The Maker shall pay principal in the following
eight (8) installments on or before the dates set forth below (each a
"Principal Payment Date"):
<Table>
DATE OF PAYMENT AMOUNT
January 31, 2003 $85,711.85
April 30, 2003 $85,711.85
July 31, 2003 $85,711.85
October 31, 2003 $85,711.85
January 30, 2004 $85,711.85
April 30, 2004 $85,711.85
July 30, 2004 $85,711.85
October 31, 2004 $85,711.85
</Table>
3. INTEREST. The Maker shall pay interest on the balance of the principal of
this Note outstanding from time to time quarterly, in arrears, on or before
each Principal Payment Date following the last day of each calendar
quarter, at the prime rate of the holder (or if there is more than one, the
primary holder) of Senior Indebtedness (as defined below) (currently
KeyBank National Association) in effect on the last day of such calendar
quarter that such holder is opened for business, pro rated for any period
of less than a full calendar quarter that this Note is outstanding based on
the number of days in such calendar quarter.
4. SUBORDINATION.
(a) For purposes of this Section 4, the term "Senior Indebtedness" shall
mean the indebtedness of the Maker to its primary lending bank or
banks outstanding from time to time. All references to "holders" of
Senior Indebtedness shall also refer to a single holder if there is
only one such holder, as the circumstances shall require.
(b) No payment on account of the principal of, or interest on, this note
shall be made if at the time such payment would otherwise be made, the
holders of the Senior Indebtedness have declared the Senior
Indebtedness to be in default.
(c) Subject to payment in full of the Senior Indebtedness, the Holder
shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of the assets of the
Maker made on such Senior Indebtedness until all principal and
interest on this Note shall be paid in full. For purpose of such
subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which any holder
of this Note would be entitled except for the subordination provisions
to this Section 4 shall, as between the Holder and the Maker and/or
its creditors (other than the holders of the Senior Indebtedness) be
deemed to be a payment on account of the Senior Indebtedness.
(d) The provisions of this Section 4 are and are intended to be solely for
the purposes of defining the relative rights of the Holder and the
holders of Senior Indebtedness, and nothing in this Section 4 shall
impair, as between the Maker and the Holder, the obligation of the
Maker, which is unconditional and absolute, to pay to the Holder the
principal hereof and interest
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hereon in accordance with the terms hereof; nor shall anything herein
prevent the holder from exercising all remedies otherwise permitted by
applicable law or hereunder upon default, subject to the rights set
forth above of the holders of Senior Indebtedness.
5. EVENTS OF DEFAULT. At the option of the Holder, all unpaid principal and
accrued but unpaid interest on this Note shall become immediately due and
payable without presentment, demand, protest or notice of any kind if any
one or more of the events described in clauses (a) and (b), below, occurs
(each and "Event of Default"):
(a) The Maker -
(i) fails to pay any installment of interest or principal when due;
(ii) commences any voluntary proceeding under any provision of Title 11
of the United States Code, as now in effect or as hereafter
amended; or commences any other proceeding under any law, now or
hereafter in force relating to bankruptcy, insolvency,
reorganization, liquidation, or otherwise relating to its relief as
a debtor or the readjustment of its indebtedness;
(iii) makes any assignment for the benefit of creditors or a composition
or similar arrangement with creditors; or
(iv) appoints a receiver, trustee or similar judicial officer or agent
to take charge of, or liquidate any of its property or assets.
(b) Any involuntary proceeding of the kind described in clauses (a)(ii),
(a)(iii) or (a)(iv), above, is commenced against the Maker.
6. PREPAYMENT. At the option of the Maker, this note may be prepaid in whole
or in part at any time without penalty or premium. Any such prepayment
shall be applied first to the payment of accrued but unpaid interest as of
the date of such prepayment and then to the payment of the principal
balance hereof.
7. SECURITY INTEREST. The Maker has granted to the Holder a present security
interest in all of the Maker's assets, both tangible and intangible
pursuant to a security agreement between the Holder and the Maker of even
date herewith. The security interest is subordinate in right of payment,
performance and priority only to the security interest of the holders of
Senior Indebtedness in effect from time to time.
8. GENERAL.
(a) None of the terms or provisions of this Note may be excluded; modified
or amended except by a written instrument duly executed by the Holder
and Maker expressly referring to this Note and setting forth the
provision so excluded, modified or amended.
(b) The Maker hereby waives presentment, demand, presentment for payment,
protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note.
(c) This Note shall be governed by an construed in accordance with the
domestic laws of the State of New York without giving effect to any
choice of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York and shall be
binding upon the successors and assigns of the Maker and shall inure
to the benefit of the successors and assigns of the Holder.
STRATEGIC TECHNICAL ALLIANCE, LLC
By: /s/ AMBER M. BROOKMAN
--------------------------------
Amber M. Brookman
Member