Document:

Exhibit 10.17

ING BHF-BANK Aktiengesellschaft
Bockenheimer Landstrasse 10

60323 Frankfurt am Main

Federal Republic of Germany

Dear Sirs,

We, the undersigned, have been informed that you have granted a credit facility
up to a maximum amount of (euro) 1.000.000,00 (in words: EURO one million)
(hereinafter the ,,Facility") under a Facility Agreement dated 20.11.2002
(hereinafter as from time to time prolonged or otherwise amended the ,,Facility
Agreement") to Hohenstaufen Zweihundertsechsundzwanzigste Vermogensverwaltungs
GmbH, Hohenstaufenring 62, 50674 Koln, Germany (hereinafter the ,,Borrower")
under the condition inter alia that you obtain our indemnity.

Therefore, in consideration of and as collateral for your granting the Facility,

1.    We, Mikron Infrared Inc., 16, Thornton Road, Oakland, New Jersey 07436,
      USA, hereby un-dertake irrevocably, unconditionally and irrespective of
      the validity and enforceability of the Fa-cility Agreement, whether the
      indebtedness, obligations and liabilities of the Borrower is from time to
      time reduced and thereafter increased or entirely extinguished and later
      reincurred, to pay freely transferable and effective to you, your
      successors, endorsers and assignees - upon your written demand stating
      that the Borrower has not fulfilled its obligations under the Facility
      Agreement - a maximum amount up to

                               (euro) 1.000.000,00
                          (in words: EURO one million)
                     - hereinafter called ,,Principal Sum" -

2.    The Principal Sum will be increased by any expenses, charges and interest,
      especially but not limited to legal costs, to be paid on the Principal Sum
      covered by this Indemnity or arising pursuant to the enforcement thereof.
      This also applies if the aforementioned amounts are added to the Principal
      Sum by balance determination on the current account. Such amounts can be
      claimed in addition to the Principal Sum.

3.    Our obligation hereunder shall be absolute and unconditional, irrespective
      of, and shall not be affected or impaired by, any circumstance whatsoever,
      which might otherwise constitute a dis-charge of or a defense available to
      the Borrower, or might otherwise constitute a discharge of, or defense
      available to, a surety or guarantor. All payments to be made hereunder
      shall be made in same day funds without set-off or counterclaim and free
      and clear of and without deduction for or on account of any present or
      future taxes of any nature now or hereafter imposed unless we are
      compelled by law to pay. In such event we shall pay to you such additional
      amounts as may be necessary to ensure that you receive a net amount equal
      to the full amount which you would have received had payment not been made
      subject to such tax.

4.    All payments under this indemnity shall be effected in the legal currency
      of the Federal Republic of Germany. If it is necessary for the purpose of
      obtaining judgement in any court to convert the sum due hereunder into any
      other currency, we hereto agree, to the fullest extent permitted by law

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      that the rate of exchange used shall be the rate at which in accordance
      with normal banking pro-cedures you could purchase such other currency on
      the business day preceding the day on which final judgement is given.

5.    Any demand hereunder may be delivered or sent either by letter, telex,
      telefax or cable to us at our office located at 16 Thornton Road, Oakland,
      New Jersey 07436, Attention: Gerald D. Posner, President, fax number
      +(201) 405-0090 and shall be deemed to have been made when re-ceived.

6.    This indemnity is valid as of the date of issuance and remains in full
      force and effect until we have been expressly released by you hereunder. 3
      month and 1 day after the date on which the Borrower's obligations
      under the Facility Agreement have been fulfilled you will immediately
      declare such release in writing. Should any provision contained in this
      indemnity be found invalid, such invalidity shall not affect the validity
      of the remaining provisions which shall continue to be in full force and
      effect.

7.    All costs, expenses and legal expenses, which might arise in connection
      with the delivery and/or execution of this indemnity will be borne by us.

This indemnity will be governed by and construed in all respects in accordance
with the laws of the Federal Republic of Germany. Non-exclusive place of
jurisdiction is Frankfurt am Main.

Oakland, New Jersey, dated 21. November 2002   Mikron Infrared, Inc.

                                               By: /s/ Dennis L. Stoneman
                                                  --------------------------
                                                   Dennis L. Stoneman,
                                                   Executive Vice President

ACCEPTED

_____________, dated __. ___________ 2002
                                               -------------------------------
                                               ING BHF-BANK AktiengesellschaftExhibit 10.18

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER
AND TO THE EXTENT SET FORTH IN THAT CERTAIN INTERCREDITOR AND SUBORDINATION
AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF NOVEMBER 21, 2002 AMONG
MIKRON INFRARED, INC., GERALD D. POSNER, AND FLEET NATIONAL BANK (THE "BANK"),
TO THE INDEBTEDNESS OWED BY MIKRON INFRARED, INC. TO THE BANK PURSUANT TO THAT
CERTAIN CREDIT AGREEMENT, DATED AS OF NOVEMBER 21, 2002 (THE "CREDIT
AGREEMENT"); AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

                                                   Dated Date: November 21, 2002
                                                Maturity Date: November 20, 2007
                                              Initial Principal Amount: $250,000
                                             Maturity Principal Amount: $388,303

      FOR VALUE RECEIVED, Mikron Infrared, Inc., a corporation duly organized
and validly existing under the laws of New Jersey (the "Company"), does hereby
promise to pay to the order of Gerald D. Posner (the "Payee"), and his
successors, heirs and assigns, on the date that the principal amount of this
Note shall become due (as set forth herein), in lawful currency of the United
States of America, the Appreciated Amount (as hereinafter defined). Unless the
principal amount of this Note is earlier prepaid or accelerated as hereinafter
provided, the "Appreciated Amount," as hereinafter defined. shall be due and
payable only on the Maturity Date stated above and in the Maturity Principal
Amount stated above. Interest shall not be payable on this Note except in the
case of the failure to pay the Appreciated Amount when due, in which case such
Appreciated Amount shall thereafter bear interest at the rate of 9% per annum
until paid in full.

      For purposes of this Note, the "Appreciated Amount" means, as of any date
of computation, the Initial Principal Amount stated above plus the principal
amount accreted on this Note from the Dated Date stated above to the date of
computation. This Note shall accrete in value at a yield of 9% per annum,
compounded on each December 31 and June 30, commencing December 31, 2002 (each a
"Compounding Date"). The Appreciated Amount on each Compounding Date prior to
the Maturity Date is set forth on Exhibit A attached hereto and incorporated
herein by this reference. The Appreciated Amount of this Note on a date other
than a Compounding Date is the Appreciated Amount on the immediately preceding
Compounding Date (or the Dated Date if the date of computation is prior to the
first Compounding Date), plus a portion of the difference between the
Appreciated Amount as of the immediately preceding Compounding Date and the
Appreciated Amount as of the immediately succeeding Compounding Date calculated
by multiplying such difference by a fraction the numerator of which is the
number of days that have elapsed since the immediately preceding Compounding
Date and denominator of which is the number of days from the immediately
preceding Compounding Date to the immediately succeeding Compounding Date.

      The Payee shall have the right to require the Company to prepay the amount
which shall be due and owing by Payee pursuant to the terms of this paragraph in
the event that a "Change in

<PAGE>

Control" (as hereinafter defined) occurs. The amount which shall be due and
payable by the Company in connection with any such prepayment shall equal the
Appreciated Amount as of the date selected by the Payee for prepayment (as
hereinafter provided). For purposes hereof, a "Change in Control" shall be
deemed to occur if: (i) any "person" or "group" (as such terms are defined in
the U.S. Securities Exchange Act of 1934, as amended) other than the Company or
any of its subsidiaries, or a trustee or any fiduciary holding securities under
an employee benefit plan of the Company or any of its subsidiaries, acting
singly or in concert with one or more other persons, acquires securities
representing 50% or more of the combined voting power of the Company's then
outstanding securities; (ii) during any one year period, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's shareholders was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
(iii) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (a) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent, in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, at least 50% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than 50% of the combined voting power of the
Company's then outstanding securities; (iv) the shareholders approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of its assets; or (v) Gerald D.
Posner shall cease to be a full time employee of the Company. The Payee may
exercise such right by delivery to the Company, within 20 days of his receipt of
notice that either a Change in Control or an Event of Default has occurred, of a
redemption notice in the form of Exhibit B hereto specifying the required date
of prepayment, which must be at least 10 days after the delivery of such notice
to the Company. The amount due and payable by the Company on such specified
prepayment date shall be the Appreciated Amount as of such date. The Company,
for itself, and on behalf of any successor to the Company by merger,
consolidation, operation of law or otherwise, covenants to give the Payee
written notice of the occurrence of (x) an Event of Default not later than the
date when the same shall occur, and (y) a Change in Control not later than the
date upon which the Company acquires actual notice of the occurrence thereof.

      The Company shall have the right to prepay this Note, in whole or in part,
in amounts of $50,000 or an integral multiple thereof at any time at its option,
at any time at its option, without premium or penalty. The amount due and
payable by the Company on the date when such prepayment shall occur shall be the
Appreciated Amount as of such date.

      The Payee shall have the right, by notice in writing to the Company, to
declare the entire principal amount of this Note to become immediately due and
payable (whereupon such amount shall become immediately due and payable) in the
event that any of the following defaults shall occur, and shall remain uncured
upon expiration of the period, if any, provided for the curing thereof (each, an
"Event of Default"):

                                       2
<PAGE>

      1. if the Company pays any cash dividend with respect to its common stock
at any time prior to the date upon which the Company's obligations to the Payee
pursuant to this Note shall have been fully satisfied;

      2. The admission in writing by the Company of its inability to pay its
debts as they mature;

      3. The filing by the Company of a petition in bankruptcy;

      4. The making of an assignment by the Company for the benefit of its
creditors;

      5. Consent by the Company to the appointment of, or possession by, a
custodian for itself or for all or substantially all of its property;

      6. The filing of a petition in bankruptcy against the Company with the
consent of the Company;

      7. The filing of a petition in bankruptcy against the Company without the
consent of the Company, and the failure to have such petition dismissed within
thirty (30) days from the date upon which such petition is filed;

      8. Notwithstanding the thirty (30) day provision in the foregoing
Paragraph 7, on a petition in bankruptcy filed against Company, Company is
adjudicated a bankrupt;

      9. The entry by a court of competent jurisdiction of a final
non-appealable order, judgment or decree appointing, without the consent of the
Company, of a receiver, trustee or custodian for the Company or of all or
substantially all of the respective property or assets of Company;

      10. The commencement of a proceeding to foreclose the security interest
in, or lien on, any property or assets to satisfy the security interest or lien
therein of any creditor of the Company;

      11. The entry of a final judgment for the payment of money by a court of
competent jurisdiction against the Company, which judgment the Company shall not
discharge (or provide for such discharge) in accordance with its terms within
sixty (60) days after the date of entry thereof, or procure a stay of execution
thereof within sixty (60) days after the date of entry thereof and, within such
sixty (60) day period, or such longer period during which execution of such
judgment shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; and

      12. The imposition of any attachment or levy, or the issuance of any note
of eviction against the assets or properties of the Company.

                                       3
<PAGE>

      Notwithstanding the foregoing, this Note shall, without demand, notice or
legal process of any kind, be declared and shall become immediately due and
payable upon the occurrence of any of the following events (each a "Bankruptcy
Event"): (i) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver, trustee, or liquidator for the Company in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities, or
similar decree or order unstayed and in effect for a period of thirty (30)
consecutive days; (ii) the consent by the Company to the appointment of a
trustee, conservator, receiver, or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to the Company and involving substantially all of its
property; or (iii) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition under any applicable
bankruptcy, insolvency, or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations.

      If principal of this Note is accelerated upon the occurrence of an Event
of Default or a Bankruptcy Event, the amount immediately due and payable on this
Note shall equal the Appreciated Amount as of such date of acceleration. The
Company hereby promises to pay all costs and expenses, including reasonable
attorneys fees and expenses, incurred in the collection and enforcement of this
Note.

      The validity of this Note and each of the terms and provisions of this
Note, and the rights and obligations of the Company and the Payee under this
Note, shall be governed by, interpreted, construed, and enforced pursuant to and
in accordance with the laws of the State of New Jersey without reference to the
conflicts of laws provisions thereof.

The Company hereby irrevocably waives, to the fullest extent permitted by
applicable law, presentment, demand, notice of dishonor, protest or notice of
any other kind in connection with this Note, and all payments hereunder shall be
made without set-off, defense, deduction, counterclaim or withholding on account
of taxes, levies, duties or any other reason whatsoever.

All notices, directions, certificates or other communications under this Note
shall be sufficiently given and shall be deemed given when sent by certified or
registered mail, return receipt requested, or by overnight courier addressed to
the appropriate notice address set forth below. The Company or the Payee may, by
such notice described above, designate any further or different address to which
subsequent notices, certificates or other communications shall be sent without
any requirement of execution of any amendment to this Note. Any such notice,
certificate or communication shall be deemed to have been given as of the date
of actual delivery or the date of failure to deliver by reason of refusal to
accept delivery or changed address of which no notice was given pursuant to this
paragraph. The notice addresses are as follows:

To the Company:

Mikron Infrared, Inc.
16 Thornton Road
Oakland, New Jersey 07436
Attention: President

                                       4
<PAGE>

To the Payee:

Mr. Gerald D. Posner
8 Victorian Hill
Manalapan, New Jersey  07726-8682

      The provisions of this Note shall be binding on the successors and assigns
of the Company, including, but not limited to, any receiver, trustee,
representative or other person appointed under foreign or domestic bankruptcy,
receivership, or similar proceedings of the Company and any person having an
interest in the Company.

TO THE EXTENT PERMITTED BY LAW, EACH OF THE COMPANY AND THE PAYEE (A) COVENANTS
AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING UNDER
THIS NOTE TRIABLE BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL EXIST NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL BY THE COMPANY, AND THIS WAIVER IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A JURY TRIAL WOULD OTHERWISE ACCRUE.

      If any provision of this Note shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining portions shall not in
any way be affected or impaired. In case any covenant, stipulation, obligation
or agreement of the Company contained in this Note shall for any reason be held
to be in violation of law, then such covenant, stipulation, obligation or
agreement shall be deemed to be the covenant, stipulation, obligation or
agreement of the Company to the full extent permitted by law.

      This Note represents a general unsecured obligation of the Company.

      IN WITNESS WHEREOF, the Company has executed this Promissory Note by its
duly authorized officer as of the Dated Date mentioned above.

                              Mikron Infrared, Inc.

                              By:    /s/ Paul A. Kohmescher
                                 ----------------------------------------------
                                     Paul A. Kohmescher, Vice President
                                     And Chief Financial Officer

                                       5
<PAGE>

                                    EXHIBIT A

                               APPRECIATED AMOUNTS

Compounding Date                            Amount
----------------                            ------

December 31, 2002                          $252,466
June 30, 2003                              $263,734
December 31, 2003                          $275,700
June 30, 2004                              $288,039
December 31, 2004                          $301,072
June 30, 2005                              $314,509
December 31, 2005                          $328,778
June 30, 2006                              $343,451
December 31, 2006                          $359,033
June 30, 2007                              $375,057
Maturity Date                              $388,303

                                      A-1

<PAGE>

                                    EXHIBIT B

                                REDEMPTION NOTICE
                            (Upon Change of Control)

To: Mikron Infrared, Inc.

      The undersigned Payee, having received notice of the occurrence of a
"Change of Control" (as such term is defined in the promissory note in the
original principal amount of $250,000 issued by Mikron Infrared, Inc. (the
"Company") to the undersigned on November 21, 2002 (the "Note")), hereby elects
to exercise the right of redemption granted pursuant to the terms of the Note to
the undersigned in such event.

      Accordingly, PLEASE TAKE NOTICE, that demand is hereby made that the
Company pay to the undersigned on ______, 200__ the "Appreciated Amount" (as
such term is defined in the Note) which shall be due and owing on said date.

Dated:                       , 200
        ---------------------     --

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

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