Exhibit 10.5

 

SUBORDINATED

PROMISSORY NOTE

 

$990,000

   May 19, 2003

 

FOR VALUE RECEIVED, the undersigned, CYBEX INTERNATIONAL, INC., a New York
corporation (the “Obligor”), does hereby promise to pay to the order of UM
HOLDINGS, LTD., a New Jersey corporation (the “Lender”), as hereinafter
provided, the principal sum of Nine Hundred and Ninety Thousand Dollars
($990,000), together with interest on the unpaid principal hereof from the date
of this Note until paid, at the rate of 10% per annum.

 

Both the principal of and interest on this Note are payable in lawful money of
the United States of America.

 

This Note shall be deemed to be “Junior Debt” for purposes of the subordination
agreement dated July 24, 2002 (the “Subordination Agreement”) among Obligor,
Lender, Wachovia Bank, National Association, as agent for the lenders named
therein, and such lenders, and as such shall be subject to the terms and
provisions of the Subordination Agreement, including the provisions thereof
subordinating the payment of the principal, interest, fees and costs hereunder
to the payment in full of all Obligations (as defined in the Subordination
Agreement), as more fully therein provided. Subject to the Subordination
Agreement, the principal of and interest on this Note shall become payable in
full on the later of January 1, 2004 or one business day after all Obligations
(as defined in the Subordination Agreement) shall have been indefeasibly paid in
full.

 

If any one or more of the following Events of Default shall occur:

 

A.    A failure to pay the principal of or interest on this Note when due, and
the continuance of such default 30 days after written notice thereof shall have
been provided by the Lender to the Obligor;

 

B.    A material attachment, garnishment, levy or lien shall be made, issued or
filed against any of the assets of the Obligor, and such action shall not be
discharged within sixty days; or

 

C.    The Obligor shall (i) apply for, consent to or permit the appointment of a
receiver, trustee or liquidator of the Obligor or of all or a substantial part
of its assets, (ii) be unable, or admit in writing its inability, to pay debts
as they mature, (iii) make a

--------------------------------------------------------------------------------

general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt
or insolvent, or (v) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization, or an arrangement with creditors or to take
advantage of any insolvency law, or any answer admitting the material
allegations of a petition filed against the Obligor in any such proceeding; or

 

D.    A change of control of the Obligor occurs of a nature that would be
required to be reported in the Obligor’s proxy statement under the Securities
Exchange Act of 1934, as amended;

 

then in any such event, but subject to the Subordination Agreement, the holder
of this Note may at any time thereafter (unless all such Events of Default shall
theretofore have been fully cured to the satisfaction of such holder, and all
costs and expenses, including without limitation attorneys’ fees and expenses,
incurred by or on behalf of such holder shall have been paid by the Obligor), by
notice to the Obligor, declare the entire outstanding principal of this Note to
be due and payable immediately, and upon such declaration such principal, and
all accrued but unpaid interest, shall become and be immediately due and
payable, without further notice.

 

Subject to the Subordination Agreement, this Note may at the option of the
Obligor at any time or from time to time be prepaid, in whole or in part,
without penalty or premium.

 

The principal of and interest on this Note is subject to automatic conversion
into shares of the Common Stock of the Obligor, in the event and on the terms
more fully provided in Section 4 of the Subordination Agreement.

 

Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding or placed in the hands of attorneys for collection,
the Obligor agrees to pay, in addition to the principal and interest due and
payable hereon, all costs of collecting this Note, including reasonable
attorneys’ fees and expenses.

 

The Obligor expressly waives presentment, demand, protest or any other notice
whatsoever.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Note on the
day and year first above written.

 

       

CYBEX INTERNATIONAL, INC.

        By:  

/s/    JOHN AGLIALORO        

--------------------------------------------------------------------------------

            Authorized signatory