Exhibit 10.3
 

Execution Copy

SECURED PROMISSORY NOTE
 
$425,149.00
February 3, 2010
 
South Bend, Indiana

THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY JOHN A.
MARTELL IN FAVOR OF WELLS FARGO BANK, NATIONAL ASSOCIATION, ACTING THROUGH ITS
WELLS FARGO BUSINESS CREDIT OPERATING DIVISION, DATED AS OF JANUARY 29, 2010.

FOR VALUE RECEIVED, the undersigned, MISCOR GROUP, LTD., an Indiana corporation
(the "Borrower"), hereby promises to pay to the order of JOHN A. MARTELL, a
resident of Michigan (the "Lender"), at his residence of 61249 Howell Drive,
Cassopolis, Michigan 49031 or at such other place as the holder hereof may
designate in writing, in lawful money of the United States of America, the
principal sum of Four Hundred Twenty-Five Thousand One Hundred Forty-Nine and
00/100 Dollars ($425,149.00),or such lesser principal sum as may then be owed by
the Borrower to the Lender under this Secured Promissory Note (the "Note") and
any remaining accrued interest (as set forth below), on or before the earlier of
the following dates:
 
The entire unpaid principal of the Note and any unpaid and accrued interest
thereon shall be due in full on February 28, 2012 (the "Stated Maturity Date").
 
THE UNPAID INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME IMMEDIATELY DUE AND
PAYABLE UPON THE STATED MATURITY DATE, TOGETHER WITH ANY REMAINING ACCRUED
INTEREST THEREON (AS SET FORTH BELOW).
 
This Note shall bear interest on the unpaid principal amount outstanding
beginning on the first day of the month immediately following the date of this
Note and continuing on a monthly basis thereafter until the Stated Maturity Date
or until maturity due to acceleration; said interest shall accrue at the Prime
Rate plus two percent (2%), but in no event shall the total interest rate be
less than five percent (5%); and interest payments shall be made by the Borrower
each month beginning on the first day of the month immediately following the
date of this Note and continuing on a monthly basis thereafter in an amount
equal to the interest accruing for the prior month.
 
Subject to the approval of Wells Fargo Business Credit, installment payments on
the principal sum shall begin April 1, 2010, and shall be made on the first day
of each consecutive month thereafter in amounts of not less than Five Thousand
Dollars ($5,000), with the final payment of the entire unpaid principal and all
unpaid accrued interest thereon due on the Stated Maturity Date.  All payments
on account of indebtedness evidenced by this Note shall be first applied to
interest on the unpaid balance and the remainder to principal.  Payments of both
principal and interest hereunder are to be made in immediately available funds.
 
If the Borrower fails or refuses to pay any principal, interest, charges, costs,
expenses and/or fees in accordance with the terms of this Note ("Event of
Default"), the Lender shall be entitled, at its sole option, to accelerate the
then outstanding indebtedness hereunder and to take all other action permissible
by law.
 

 
 

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The remedies of the holder hereof as provided in this Note shall be cumulative
and concurrent, and may be pursued singly, successively, or together against the
Borrower, and/or against any collateral or guarantor, at the sole discretion of
the holder hereof.
 
The Borrower hereby waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest, and
protest of this Note and all other notices in connection with the delivery,
acceptance, performance, default, or enforcement of the payment of this Note,
and agrees that its liability shall be unconditional without regard to the
liability of any other party or person and shall not in any manner be affected
by any indulgence, extension of time, renewal, waiver or modification granted or
consented to by the holder hereof; and the Borrower agrees that additional
makers, endorsers, guarantors, or sureties may become parties hereto without
notice to the Borrower or affecting the Borrower’s liability hereunder.
 
It being the intent of the Lender and the Borrower that the rate of interest and
all other charges to the Borrower be lawful, if for any reason the payment of a
portion of the interest or other charges otherwise required to be paid under
this Note would exceed the limit which the Lender may lawfully charge the
Borrower, then the obligation to pay interest or other charges shall
automatically be reduced to such limit.
 
The holder hereof shall not by any act of omission or commission be deemed to
waive any of its rights or remedies hereunder unless such waiver be in writing
and signed by the holder hereof (and then only to the extent specifically set
forth therein).  A waiver of any one event shall not be construed as continuing
or as a bar to or waiver of such right or remedy on a subsequent event.
 
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under such law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions of this Note.
 
This Note shall not be amended, supplemented or modified except pursuant to a
writing signed by both the Lender and the Borrower.
 
If at any time or times, the Lender: (a) employs counsel in good faith for
advice or other representation (i) with respect to this Note or any collateral
securing this Note, (ii) to represent Lender in any restructuring, workout,
litigation, contest, dispute, suit or proceeding or to commence, defend or
intervene or to take any other action in or with respect to any litigation,
contest, dispute or proceeding (whether instituted by the Lender, the Borrower
or any other person or entity) in any way or respect relating to this Note or
any collateral securing this Note, or (iii) to enforce any rights of the Lender
against the Borrower; (b) takes any action to protect, collect, sell, liquidate
or otherwise dispose of any collateral securing this Note; and/or (c) attempts
to or enforces any of the Lender’s rights and remedies against the Borrower;
then the costs and expenses incurred by the Lender shall be part of the
indebtedness evidenced by this Note, payable by the Borrower to the Lender on
demand.  Without limiting the generality of the foregoing, such expenses and
costs include any and all court costs, reasonable attorneys’ fees and expenses,
and accountants’ fees and expenses.
 
Payment of this Note is secured pursuant to that certain Security Agreement
dated as of February 3, 2010 (the "Security Agreement").
 
This Note shall inure to the benefit of the Lender and its successors and
assigns and shall be binding upon the Borrower and its successors and permitted
assigns.  As used herein the term “Lender”
 

 
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shall mean and include the successors and assigns of the identified payee and
the holder or holders of this Note from time to time.
 
THIS NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND ENFORCED
AND GOVERNED BY THE INTERNAL LAWS OF, THE STATE OF INDIANA, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
 
THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE
FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS
NOTE OR ANY COLLATERAL SECURING THIS NOTE, INCLUDING, WITHOUT LIMITATION, ANY
ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS NOTE OR THE SECURITY AGREEMENT, OR (B) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS NOTE OR THE SECURITY
AGREEMENT.  THE LENDER AND THE BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY.
 

 
[SIGNATURE PAGE FOLLOWS]
 

 
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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its
authorized officer as of the date first above written.
 

 

 
MISCOR GROUP, LTD
     
By:
/s/ Michael D. Topa
   
Michael D. Topa
Interim Chief Financial Officer

 
 
 
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