Exhibit 10.16


Confidential                                     CB Frankfurt Branch
                                                 Nancy Eichbaum
HOHENSTAUFEN ZWEIHUNDERT-                        Tel.: +49 69 718-3119
SECHSUNDZWANZIGSTE Vermogensverwaltungs GmbH     Fax: +49 69 718-3195
- Management -
Hohenstaufenring 62
50674 Koln                                       15.11.2002

Account no. [           ]

Preamble: Mikron Infrared, Inc. ("Mikron") has acquired the company Hohenstaufen
zweihundertsechSundzwanzigste Vermogensverwaltungs GmbH ("226"). This company is
to serve as a holding company as part of a legal and tax structure for the
purchase of the shares in the German Impac Group. As a consequence of this
transaction, the German Impac companies (Impac Electronic GmbH, infra sensor
Spezialpyrometer GmbH and IMPAC systems GmbH) are each scheduled to change their
legal form from that of a limited liability company (GmbH) to that of a limited
commercial partnership. The German limited liability company INFRAPOINT
Messtechnik GmbH is to act as the general partner ("Komplementar-GmbH").

The purchase price for these companies is financed using Mikron funds (loans
provided by Fleetbank), Mikron's own shares, capital appreciation notes of
Messrs. Stoneman and Posner, a deferred payment of the purchase price credited
against the purchase price and agreed with the selling parties (Messrs.
Schlosser and Breternitz) as well as the loan issued by ING BHF-BANK
Aktiengesellschaft as stated below.

The cash funds and the Mikron shares will be credited/transferred to 226's
account no. [ ] and allocated to the company's equity capital. Together with the
loan provided by ING BHF-BANK AG, these cash funds and Mikron shares will then
be used to pay the purchase price for the shares in the Impac Group to the
selling parties by performing an asset-side swap, i.e. posting the book value
and the good will of the shareholdings in exchange for these assets.

The redemption loan furnished by ING BHF-BANK AG is to be serviced in future out
of the cash flow of the Impac companies via credit transfer to 226's account
(covering the latter's interest and repayment obligations).

Dear Sirs,

We refer to the discussions held with you and declare our willingness to provide
you with the following cash redemption loan for the partial financing of the
purchase price for the takeover of Impac Group by the US company Mikron
Infrared, Inc.:

                                EUR 1,000,000.00
                          (in words: one million euros)

ING BHF-BANK Aktiengesellschaft
Frankfurt Branch


<PAGE>

Page 2 of the letter dated 15.11.2002
to HOHENSTAUFEN ZWEIHUNDERTSECHSUNDZWANZIGSTE
Vermogensverwaltungs GmbH Hohenstaufenring 62, 50674 Koln


Term and redemption:

The loan has a term ending on 30 September 2006 and shall be repaid quarterly in
equal instalments of EUR 62,500.00 at the end of each quarter. The first
redemption instalment falls due on 30 December 2002, the last on 30 September
2006.

Conditions:

Interest will be charged quarterly in arrears and calculated in accordance with
the international interest calculation method (365/360). In accordance with
customary practice, we will agree the conditions for this cash redemption loan
with you two bank business days in advance, based on the 3-month EURIBOR rate.
The bank's margin amounts to 2.50% p.a.

In addition, we will charge you a one-off processing fee of 1.50% of the loan
principal. This amount is payable immediately after the agreement is signed and
must be held at the ready on account no. [ ].

Conditions precedent for disbursement:

o     As agreed, the loan will only be disbursed after the legally binding
      purchase contract between Mikron Infrared, Inc. and the shareholders of
      Impac Group, the guarantee issued by Mikron Infrared, Inc., and the
      relevant legal opinion have been presented to us.

o     The entire settlement of the purchase price shall be conducted via your
      account no. [ ]; in other words, the liquid funds of approx. EUR
      2,700,000.00 required over and above this loan for the purchase price
      shall be credited and posted to this account.

Collateral:

In addition to the items and rights due to us under our "General Business
Conditions", the following collateral will be furnished to us, as set out in
separate agreements:

>>    an unlimited guarantee in the amount of EUR 1,000,000.00 issued by Mikron
      Infrared, Inc.

>>    a pledge of the shares held by HOHENSTAUFEN ZWEIHUNDERTSECHSUNDZWANZIGSTE
      Vermogensverwaltungs GmbH and INFRAPOINT Messtechnik GmbH in the following
      operating companies of the Impac Group:

      -     IMPAC Electronics GmbH, Frankfurt (to be known in future as IMPAC
            Electronic KG)

      -     infra sensor Spezialpyrometer GmbH, Magdeburg (to be known in future
            as Infra Sensor KG)

      -     IMPAC systems GmbH, Dresden (to be known in future as IMPAC Systems
            KG)


ING BHF-BANK Aktiengesellschaft
Frankfurt Branch


<PAGE>

Page 3 of the letter dated 15.11.2002
to HOHENSTAUFEN ZWEIHUNDERTSECHSUNDZWANZIGSTE
Vermogensverwaltungs GmbH Hohenstaufenring 62, 50674 Koln


The pledge agreements must be returned to us within 30 days of the signing of
this loan agreement.

As regards the provision of collateral, the relevant department of our bank will
be contacting you separately.

To the extent that the collateral is subject to foreign law and we consider it
necessary to obtain legal opinions, you agree that ING BHF-BANK
Aktiengesellschaft, as part of the documentation/creation of legal opinions
acceptable to it, may commission foreign lawyers at its own discretion. The
lawyer fees and other third-party costs shall be borne by you.

Other agreements:

In granting you this loan facility, we assume that:

o     you inform us in a timely manner of the performance of the relevant
      companies by submitting business appraisals at quarterly intervals. We
      have noted a deadline of six weeks after the end of the business quarter
      of each of the companies for the submission of these figures;

o     you will not distribute any profits or grant any loans to the parent
      company before the annual interest and principal repayment obligations
      under this cash redemption loan have been met;

o     you give priority to our cash redemption loan, repaying it before any
      other loans and the deferred payment of the purchase price agreed with
      Messrs. Schlosser and Breternitz;

o     you do not encumber the items of property/balance sheet assets, in
      particular the office furniture and equipment, and the merchandise
      inventory, or assign the receivables of the Impac companies without our
      consent;

Should the loan facility granted by Fleet National Bank in connection with the
financing of the purchase price for the takeover of Impac Group by Mikron
Infrared, Inc. become delinquent or be terminated, you undertake to inform us
without delay. Regardless of its termination rights under its General Business
Conditions, ING BHF-BANK shall then be entitled to accelerate the cash
redemption loan and demand immediate repayment.

With regard to Section 18 of the German Banking Act, you undertake to provide us
with a copy of the audited annual accounts (company and consolidated accounts)
within six months of the end of each business year. If there are any material
changes in your economic and legal situation, you undertake to inform us thereof
promptly before such changes occur.


ING BHF-BANK Aktiengesellschaft
Frankfurt Branch


<PAGE>

Page 4 of the letter dated 15.11.2002
to HOHENSTAUFEN ZWEIHUNDERTSECHSUNDZWANZIGSTE
Vermogensverwaltungs GmbH Hohenstaufenring 62, 50674 Koln


We shall also be entitled to request and/or inspect further documents to the
extent that we deem such action necessary for assessing your creditworthiness.

Without prejudice to the termination rights set out in our General Business
Conditions, we have the right to wholly or partially terminate the loan and to
demand immediate repayment if any of the aforementioned loan conditions are not
fulfilled.

This agreement is subject to German law, place of jurisdiction is Frankfurt am
Main.

We are pleased to be able to place the required loan facility at your disposal
and would request in closing that you sign and return the enclosed duplicate of
this letter hence confirming your agreement with the content hereof.

Our loan offers dated 1 November 2002 and 12 November 2002 will thus become null
and void.


Yours sincerely,

BHF-BANK Aktiengesellschaft
Frankfurt Branch