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                                                                   EXHIBIT 10.27

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
TO THE SECURITY, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND
SUCH APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE ISSUER RECEIVES AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION UNDER SUCH
ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

                             OAKHURST COMPANY, INC.
                          SUBORDINATED PROMISSORY NOTE

DATE: JULY 18, 2001                                                   $4,060,000

OAKHURST COMPANY, INC., a Delaware corporation (together with its successors and
assigns the "Issuer") for value received hereby promises to pay to NORTH
ATLANTIC SMALL COMPANIES INVESTMENT TRUST PLC, or order (the "Noteholder") by
wire transfer of immediately available funds to an account designated by the
Noteholder by notice to the Issuer, the principal sum of Four Million Sixty
Thousand Dollars ($4,060,000), without interest on the Maturity Date (as defined
herein) in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts.

1.       Note Register. The Issuer shall keep at its principal office a register
         (the "Register") in which shall be entered the name and address of the
         registered holder of this Note and of all permitted transfers of this
         Note. References to the "Noteholder" shall mean the Person listed in
         the Register as the payee of the Note. The ownership of this Note shall
         be proven by the Register. For the purpose of paying the principal on
         this Note, the Issuer shall be entitled to rely on the name and address
         in the Register and notwithstanding anything to the contrary contained
         in this Note, no Event of Default shall occur under Section 3(c) if
         payment of principal is made in accordance with the name and address
         contained in the Register. The Noteholder may change his address as
         shown on the Note Register by written notice to the Company requesting
         such change.

2.       Definitions. The following terms for all purposes of this Note shall
         have the meanings specified below. All accounting terms used herein and
         not expressly defined shall have the meanings given to them in
         accordance with generally accepted accounting principles as in effect
         from time to time. The terms defined in this Section 2 include the
         plural as well as the singular.

         (a)      "Acceleration Notice" shall have the meaning set forth in
                  Section 3(c).

         (b)      "Affiliate" means, with respect to any Person, any other
                  Person directly or indirectly controlling, controlled by or
                  under common control with, such Person.

         (c)      "Business Day" means any day except a Saturday, Sunday or
                  other day on which commercial banks in the State of Delaware
                  are authorized by law to close.

         (d)      "Debt" means at any date an amount equal to or greater than
                  $100,000 of (i) all obligations of the Issuer for borrowed
                  money; (ii) all obligations of the Issuer evidenced by bonds,
                  debentures, notes, or other similar instruments; (iii) all
                  obligations of the Issuer in respect of letters of credit or
                  other similar instruments (or reimbursement obligations with
                  respect thereto;) (iv) all obligations of the Issuer to pay
                  the deferred purchase price of property or services, except
                  trade payables; (v) all obligations of the Issuer as lessee
                  under capitalized leases; (vi) all Debt of others secured by a
                  Lien on any asset of the Issuer, whether or not such Debt is
                  assumed by such Person; and (vii) any guarantee by the Issuer
                  of the payment obligation of another Person.

         (e)      A "Default" means any condition or event which constitutes an
                  Event of Default or which with the giving of notice or lapse
                  of time or both would, unless cured or waived, become an Event
                  of Default.
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         (f)      Event of Default" shall have the meaning set forth in Section
                  3(c).

         (g)      "Lien" means, with respect to any asset, any mortgage, lien,
                  pledge, charge, security interest or encumbrance of any kind
                  in respect of such asset. For the purposes of this Note, the
                  Issuer shall be deemed to own subject to a Lien any asset
                  which it has acquired or holds subject to the interest of a
                  vendor or lessor under any conditional sale agreement,
                  capitalized lease or other title retention agreement relating
                  to such asset.

         (h)      "Maturity Date" means 5:00 p.m. Eastern Time on the earliest
                  to occur of the following dates:

                  (i)      The fourth anniversary of the date hereof;

                  (ii)     The fourth anniversary of the date of the closing of
                           the sale by the Issuer of all of its then remaining
                           right, title and interest in and to New Heights
                           Recovery & Power, LLC to KTI, Inc.; and

                  (iii)    The Put Payment Date, as that term is defined in the
                           Transaction Agreement (defined below.)

         (i)      "Notice of Default" shall have the meaning set forth in
                  Section 3(c).

         (j)      "Person" means any individual, corporation, partnership, firm,
                  association, joint venture, joint stock company, trust,
                  unincorporated organization or other entity, or any government
                  or regulatory, administrative or political subdivision or
                  agency, department or instrumentality thereof.

         (k)      "Senior Indebtedness" means indebtedness to any bank or other
                  lending institution, including, but not limited to (i) all
                  currently outstanding indebtedness of the Issuer to Finova
                  Capital Corporation (the "Senior Lender"), as the same may be
                  amended, modified, increased or decreased from time to time,
                  by agreement between the Senior Lender and the Issuer; (ii)
                  any and all replacements or refinancings of the indebtedness
                  to the Senior Lender with one or more other lending entities,
                  whether any such refinancing is for a greater or lesser amount
                  than the current indebtedness to the Senior Lender; (iii) all
                  obligations of the Issuer to Comerica Bank-Texas ("Comerica")
                  under the guaranty by the Issuer of the obligations of
                  Sterling Construction Company, a Michigan corporation, to
                  Comerica (the "Comerica Obligations;") and (iv) any and all
                  replacements or refinancings of the Comerica Obligations
                  (whether any such replacement or refinancing is for a greater
                  or lesser amount than the amount replaced or refinanced) with
                  one or more other lending institutions that is guaranteed by,
                  or is the direct obligation of, the Issuer.

         (l)      "Subordinated Note" and "Subordinated Notes" shall have the
                  meanings set forth in Section 7.

         (m)      "Transaction Agreement" shall have the meaning set forth in
                  Section 3(c).

3.       PAYMENT OF PRINCIPAL.

         (a)      Payment Obligation. No provision of this Note shall alter or
                  impair the obligations of the Issuer to pay the principal of
                  this Note at the place and time, and in the currency, herein
                  prescribed.

         (b)      Prepayment. The principal hereunder shall be subject to
                  prepayment by the Issuer at any time without the consent of
                  the Noteholder and without premium or penalty. Insomuch as
                  this is a zero coupon note, any prepayment of this Note shall
                  be in an amount equal to the net present value as of the
                  prepayment date of the principal amount hereof, applying an
                  interest rate of twelve percent (12%) per annum.

         (c)      Events of Default and Remedies. In case one or more of the
                  following events ("Events of Default") shall have occurred and
                  be continuing:
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                  (i)      Default in the payment of the principal of this Note
                           as and when the same shall become due and payable, at
                           maturity, upon any redemption, by declaration or
                           otherwise; or

                  (ii)     failure on the part of the Issuer duly to observe or
                           perform (A) any other of the covenants or agreements
                           on the part of the Issuer contained herein (other
                           than those covered by clause (i), above;) or (B) any
                           material covenants or agreements on the part of the
                           Issuer contained in any other agreement between the
                           Issuer and the Noteholder, including, but not limited
                           to, that certain Transaction Agreement of even date
                           herewith (the "Transaction Agreement,") in either
                           such case for a period of 30 days after the date on
                           which written notice specifying such failure, stating
                           that such notice is a "Notice of Default" hereunder
                           and demanding that the Issuer remedy the same, shall
                           have been given by registered or certified mail,
                           return receipt requested, to the Issuer; or

                  (iii)    the prepayment of any Subordinated Note in violation
                           of the provisions of Section 7 of this Note; or

                  (iv)     any event or condition shall occur which results in
                           the acceleration of the maturity of any Debt or
                           enables or, with the giving of notice or lapse of
                           time or both, would enable the holder of such Debt or
                           any Person acting on such holder's behalf to
                           accelerate the maturity thereof; or

                  (v)      the Issuer pursuant to, or within the meaning of, any
                           bankruptcy or insolvency law: (A) commences a
                           voluntary case or proceeding; (B) consents to the
                           entry of an order for relief against it in an
                           involuntary case or proceeding; (C) consents to the
                           appointment of a receiver or custodian of it or for
                           all or substantially all of its property; (D) makes a
                           general assignment for the benefit of its creditors;
                           or (E) admits in writing its inability to pay its
                           debts as the same become due;

         then, subject to the last paragraph of this Section 3(c), set forth
         below, in each case where an Event of Default specified in Section
         3(c)(i) through 3(c)(iv) occurs, the Noteholder, by notice in writing
         to the Issuer (the "Acceleration Notice") may declare the principal
         hereunder to be due and payable immediately, and upon any such
         declaration the same shall become immediately due and payable; provided
         however, that if an Event of Default specified in Section 3(c)(v)
         occurs, the principal hereunder shall become and be immediately due and
         payable without any declaration or other act on the part of the
         Noteholder.

         Any principal, the payment of which shall become accelerated pursuant
         to this Section 3(c), shall be equal to (i) the net present value as of
         the payment date of the principal amount hereof applying an interest
         rate of twelve percent (12%) per annum less (ii) any prepayments made
         pursuant to Section 3(b), above.

4.       REIMBURSEMENT OF EXPENSES. The Issuer shall reimburse the Noteholder,
         on demand, for any and all costs and expenses, including reasonable
         attorneys' fees and court costs, incurred by the Noteholder in
         collecting or otherwise enforcing this Note or in attempting to do any
         of the foregoing.

5.       POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT A WAIVER OF
         DEFAULT.

         (a)      No right or remedy herein conferred upon or reserved to the
                  Noteholder is intended to be exclusive of any other right or
                  remedy, and every right and remedy shall, to the extent
                  permitted by law, be cumulative and in addition to every other
                  right and remedy given hereunder or now or hereafter existing
                  at law or in equity or otherwise. The assertion or employment
                  of any right or remedy hereunder, or otherwise, shall not
                  prevent the concurrent assertion or employment of any other
                  appropriate right or remedy.

         (b)      No delay or omission of the Noteholder to exercise any right
                  or power accruing upon any Default or Event of Default
                  occurring and continuing as aforesaid shall impair any such
                  right or power or shall be construed to be a waiver of any
                  such Default or Event of Default or an


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                  acquiescence therein; and every power and remedy given by this
                  Note or by law may be exercised from time to time, and as
                  often as shall be deemed expedient, by the Noteholder.

6.       WAIVER OF PAST DEFAULTS.

         (a)      The Noteholder may waive any past Default or Event of Default
                  hereunder and its consequences. In the case of any such
                  waiver, the Issuer and the Noteholder shall be restored to
                  their former positions and rights hereunder, respectively; but
                  no such waiver shall extend to any subsequent or other Default
                  or impair any right consequent thereon.

         (b)      Upon any such waiver, such Default shall cease to exist and be
                  deemed to have been cured and not to have occurred, and any
                  Default or Event of Default arising therefrom shall be deemed
                  to have been cured, and not to have occurred for every purpose
                  of this Note; but no such waiver shall extend to any
                  subsequent or other Default or Event of Default or impair any
                  right consequent thereon.

7.       SUBORDINATION.

         (a)      No payment on account of principal of or interest on (i) that
                  certain promissory note dated July 3, 2001 in the original
                  principal amount of $1,000,000 issued to KTI, Inc.; (ii) this
                  Note; or (ii) any other promissory note issued
                  contemporaneously herewith pursuant to the Transaction
                  Agreement (each a "Subordinated Note and collectively, the
                  "Subordinated Notes") shall be made, and no Subordinated Notes
                  shall be redeemed or purchased directly or indirectly by the
                  Issuer (or any of its subsidiaries), if at the time of such
                  payment or purchase or immediately after giving effect
                  thereto, (x) there shall exist a default in any payment with
                  respect to the Senior Indebtedness; or (y) there shall have
                  occurred any other default or event of default as those terms
                  may be defined in the instrument under which such Senior
                  Indebtedness is outstanding (other than a default in the
                  payment of amounts due thereon) with respect to the Senior
                  Indebtedness permitting the holders thereof to accelerate the
                  maturity thereof, and such default or event of default shall
                  not have been cured or waived or shall not have ceased to
                  exist.

         (b)      Subject to payment in full of the Senior Indebtedness, the
                  holders of the Subordinated Notes shall be subrogated to the
                  rights of the holders of Senior Indebtedness to receive
                  payments or distributions of the assets of the Issuer made on
                  such Senior Indebtedness until all principal and interest on
                  the Subordinated Notes shall be paid in full; and for purposes
                  of such subrogation, no payments or distributions to the
                  holders of Senior Indebtedness of any cash, property or
                  securities to which any holders of the Subordinated Notes
                  would be entitled except for the subordination provisions of
                  this Section 7 shall, as between the holders of the
                  Subordinated Notes and the Issuer and/or its creditors (other
                  than the holders of the Senior Indebtedness) be deemed to be a
                  payment on account of the Senior Indebtedness.

         (c)      The provisions of this Section 7 are and are intended solely
                  for the purposes of defining the relative rights of the
                  holders of the Subordinated Notes and the holders of Senior
                  Indebtedness and nothing in this Section 7 shall impair, as
                  between the Issuer and any holders of the Subordinated Notes,
                  the obligation of the Issuer, which is unconditional and
                  absolute, to pay to the holders of the Subordinated Notes the
                  principal thereof and interest thereon, in accordance with the
                  terms of the Subordinated Notes, nor shall anything herein
                  prevent any holders of the Subordinated Notes from exercising
                  all remedies otherwise permitted by applicable law or
                  hereunder upon default, subject to the rights set forth above
                  of holders of Senior Indebtedness to receive cash, property or
                  securities otherwise payable or deliverable to the holders of
                  the Subordinated Notes.

         (d)      Upon any payment (including by redemption) which is not a
                  payment in full of all of the principal amount and accrued
                  interest of all outstanding Subordinated Notes, the aggregate
                  amount of the payments shall be allocated to all the
                  Subordinated Notes then outstanding in proportion to the
                  amounts of principal and interest due thereunder, so that the
                  amount of


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                  principal paid under this Note shall bear the same ratio to
                  the aggregate principal and accrued interest paid under all of
                  the Subordinated Notes as the then outstanding principal then
                  owed under this Note (as if the same were then being prepaid
                  pursuant to Section 3(b)) bears to the aggregate principal and
                  accrued interest then owed under all Subordinated Notes then
                  outstanding.

8.       MODIFICATION OF NOTE. This Note may be modified only with the written
         consent of the Noteholder and the Issuer.

9.       MISCELLANEOUS. This Note shall be governed by and be construed in
         accordance with the laws of the State of New York without regard to the
         conflicts of law rules of such state. The Issuer hereby waives
         presentment, demand, notice, protest and all other demands and notices
         in connection with the delivery, acceptance, performance and
         enforcement of this Note, except as specifically provided herein, and
         assents to extensions of the time of payment, or forbearance or other
         indulgence without notice. The section headings herein are for
         convenience only and shall not affect the construction hereof. THE
         ISSUER AND THE NOTEHOLDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL
         BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
         RELATING TO THIS NOTE.

10.      SUBMISSION TO JURISDICTION. The Issuer irrevocably submits to the
         exclusive jurisdiction of the state and federal courts located in the
         State of Delaware for the purposes of any suit, action or other
         proceeding arising out of this Note. The Issuer further agrees that
         service of any process, summons, notice or document by U.S. registered
         mail to the Issuer address set forth below shall be effective service
         of process for any action, suit or proceeding in the State of Delaware
         with respect to any matters to which it has submitted to jurisdiction
         in this paragraph. The Issuer irrevocably and unconditionally waives
         any objection to the laying of venue of any action, suit or proceeding
         arising out of this Note in the foregoing courts, and hereby and
         thereby further irrevocably and unconditionally waives and agrees not
         to plead or claim in any such court that any such action, suit or
         proceeding brought in any such court has been brought in an
         inconvenient forum.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed as
of the date first set forth above.

OAKHURST COMPANY, INC.
2751 Centerville Road -- Suite 3131
Wilmington, Delaware 19803



By: /s/ Robert M. Davies
    ------------------------------------------
    Robert M. Davies, Chief Executive Officer