EX-10.4


    Exhibit
      10.4

    


      
        	
                GUARANTOR
                  NAME AND ADDRESS

              	
                LENDER
                  NAME AND ADDRESS

              	 
	 	 	 
	
                MISCOR
                  GROUP, LTD.

              	
                MFB
                  FINANCIAL

              	
                NUMBER
                  70-0028852

              
	
                1125
                  S. WALNUT STREET

              	
                4100
                  EDISON LAKES PARKWAY,

              	 
	
                SOUTH
                  BEND, IN 46619

              	
                SUITE
                  300

              	
                AMOUNT
                  5,000,000.00

              
	 	
                MISHAWAKA,
                  IN 46545

              	
                DATE
                  FEBRUARY 28, 2007

              


      

    

     

    
    

    GUARANTY

     

    DATE.
      The
      date of this Guaranty is March 9, 2007.

    For
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and to induce Lender (with its participants, successors and
      assigns), at its option, at any time or from time to time to make loans or
      extend other accommodations to or for the account of HK
      ENGINE COMPONENTS, LLC
      (Borrower or to engage in any other transactions with Borrower, the Guarantor
      hereby absolutely and unconditionally guarantees to the Lender the full and
      prompt payment when due, whether at maturity or earlier by reason of
      acceleration or otherwise, of the debts, liabilities and obligations described
      as follows:

    INDEBTEDNESS.

    £ Specific
      Debts.
      The
      Guarantor guarantees to Lender the payment and performance of the debt,
      liability or obligation of Borrower to Lender evidenced by or arising out of
      the
      following: _____________________________________________________ and any
      extensions, renewals or replacements thereof (Indebtedness).

    T All
      Debts.
      Except
      as this Guaranty may otherwise provide, the Guarantor guarantees to Lender
      the
      payment and performance of each and every debt, liability and obligation of
      every type and description which Borrower may now or at any time hereafter
      owe
      to Lender (whether such debt, liability or obligation now exists or is hereafter
      created or incurred, and whether it is or may be direct or indirect, due or
      to
      become due, absolute or contingent, primary or secondary, liquidated or
      unliquidated, or joint, several, or joint and several; all such debts,
      liabilities and obligations (indebtedness)). Without limitation, this Guaranty
      includes the following described debt(s):

    


    PROMISSORY
      NOTE #70-0028852 DATED 2/28/07 IN THE AMOUNT OF $5,000,000.00  

    Exclusions.

    £ Guarantor
      will be liable for $___________________ of the principal amount of the
      Indebtedness outstanding at default and for all of the accrued interest, and
      the
      expenses of collection, enforcement or protection of Lender’s rights and
      remedies under this Guaranty, including reasonable attorneys’ fees.

    £ Guarantor’s
      liability will not exceed ____________% of the Indebtedness outstanding at
      default and all of the accrued interest, and the expenses of collection,
      enforcement or protection of Lender’s rights and remedies under this Guaranty,
      including reasonable attorneys’ fees.

    £ Indebtedness
      Excludes:

    


    


    SECURITY

    £ the
      Guaranty is unsecured.

    T secured
      by SECURITY
      AGREEMENT DATED OF EVEN DATE HEREWITH, AND ALL SECURITY AGREEMENTS GIVEN IN
      THE
      FUTURE OF GUARANTOR IN FAVOR OF LENDER, REGARDLESS OF WHETHER SUCH SECURITY
      AGREEMENTS STATE THAT THEY SECURE THIS GUARANTY         .

    


    


    
      	 
	 


    

    


    


    SIGNATURES.
      By signing under seal, Guarantor agrees to the terms contained in this Guaranty
      (including those on page 2). Guarantor also acknowledges receipt of a copy
      of
      this Guaranty.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ADDITIONAL
      PROVISIONS

     

    



    The
      Guarantor further acknowledges and agrees with Lender that:

    1.  No
      act or
      thing need occur to establish the liability of the Guarantor hereunder, and
      no
      act or thing, except full payment and discharge of all Indebtedness, shall
      in
      any way exonerate the Guarantor or modify, reduce, limit or release the
      liability of the Guarantor hereunder.

    2.  This
      is
      an absolute, unconditional and continuing Guaranty of payment of the
      Indebtedness and will continue to be enforceable against the Guarantor, whether
      or not all Indebtedness is paid in full, until this Guaranty Is revoked by
      written notice actually received by the Lander. Any revocation shall not be
      effective as to any Indebtedness existing or committed to at the time of actual
      receipt of notice by the Lender, or as to any renewals, extensions and
      refinancings thereof.

    The
      Guarantor represents and warrants to the Lender that the Guarantor has a direct
      and substantial economic interest in Borrower and expects to derive substantial
      benefits therefrom and from any loans and financial accommodations resulting
      from the creation of Indebtedness guaranteed hereby, and that this Guaranty
      is
      given for a business purpose. The Guarantor agrees to rely exclusively on its
      right to revoke this Guaranty prospectively as to future transactions, by
      written notice actually received by Lender if at any time, the benefits then
      being received by the Guarantor in connection with this Guaranty are not
      sufficient to warrant its continuance as a Guarantor as to future Indebtedness.
      Accordingly, the Lender may rely conclusively on a continuing warranty, hereby
      made, that the Guarantor continues to be benefited by this Guaranty and that
      the
      Lender has no duty to inquire into or confirm the receipt of any benefits,
      and
      that this Guaranty will be enforceable without regard to the receipt, nature
      or
      value of any such benefits,

    3.  If
      the
      Guarantor is dissolved or becomes insolvent, however defined, or revokes this
      Guaranty, than the Lander has the right to declare the full amount of all
      Indebtedness immediately due and payable, and the Guarantor will forthwith
      pay
      the Lender. If the Guarantor voluntarily commences or there is commenced
      involuntarily against the Guarantor a case under the United States Bankruptcy
      Code, the full amount of all Indebtedness, whether due and payable or unmatured,
      will become immediately due and payable without demand or notice
      thereof.

    4.  The
      Guarantor will be liable for all Indebtedness, without any limitation as to
      amount, plus accrued interest thereon and all attorneys’ fees, collection costs
      and enforcement expenses referable thereto. Indebtedness may be created and
      continued in any amount, whether or not in excess of such principal amount,
      without affecting or impairing the liability of the Guarantor hereunder. The
      Lender may apply any sums received by or available to the Lender on account
      of
      the indebtedness from Borrower or any other person (except the Guarantor),
      from
      their properties, out of any collateral security or from any other source to
      payment of the excess. Such application of receipts will not reduce, affect
      or
      impair the liability of the Guarantor hereunder. If the liability of the
      Guarantor is limited pursuant to this paragraph 4, any payment made by the
      Guarantor under this Guaranty will be effective to reduce or discharge its
      liability only if accompanied by a written transmittal document, received by
      the
      Lender, advising that such payment is made under this Guaranty for that
      purpose.

    5.  The
      Guarantor will pay or reimburse the Lender for all costs and expenses (including
      reasonable attorneys’ fees and legal expenses) incurred by the Lender in
      connection with the protection, defense or enforcement of this Guaranty in
      any
      litigation or bankruptcy or insolvency proceedings.

    6.  Whether
      or not any existing relationship between the Guarantor and Borrower has been
      changed or ended and whether or not this Guaranty has been revoked, the Lender
      may, but shall not be obligated to, enter into transactions resulting in the
      creation or continuance of Indebtedness, without any consent or approval by
      the
      Guarantor and without any notice to the Guarantor. The liability of the
      Guarantor will not be affected or impaired by any of the following acts or
      things (which the Lender is expressly authorized to do, omit or suffer from
      time
      to time, both before and after revocation of this Guaranty, without notice
      to or
      approval by the Guarantor): (i)
      any
      acceptance of collateral security, Guarantor’s, accommodation parties or
      sureties for any or all Indebtedness; (ii)
      any one
      or more extensions or renewals of Indebtedness (whether or not for longer than
      the original period) or any modification of the interest rates, maturities
      or
      other contractual terms applicable to any Indebtedness; (iii)
      any
      waiver adjustment, forbearance, compromise or indulgence granted to Borrower,
      any delay or lack of diligence in the enforcement of Indebtedness, or any
      failure to institute proceedings, file a claim, give any required notices or
      otherwise protect any Indebtedness; (iv)
      any full
      or partial release of, settlement with, or agreement not [missing
      text]

    7.  [missing
      text] waiver,
      release, estoppel, statute of limitations, res judicata, statute of frauds,
      fraud, forgery, incapacity, minority, usury, illegality or unenforceability
      which may be available to Borrower or any other person liable in respect of
      any
      Indebtedness, or any setoff available against the Lender to Borrower or any
      such
      other person, whether or not on account of a related transaction. The Guarantor
      expressly agrees that the Guarantor will be liable, to the fullest extent
      permitted by applicable law, for any deficiency remaining after foreclosure
      of
      any mortgage or security interest securing Indebtedness, whether or not the
      liability of Borrower or any other obligor for such deficiency is discharged
      pursuant to statute or judicial decision. The Guarantor shall remain obligated,
      to the fullest extent permitted by law, to pay such amounts as though Borrower’s
      obligations had not been discharged.

    8.  The
      Guarantor further agree(s) that Guarantor will be obligated to pay Indebtedness
      even though any other person obligated to pay Indebtedness, Including Borrower,
      has such obligation discharged in bankruptcy or otherwise discharged by law.
      “Indebtedness” shall include post-bankruptcy petition interest and attorneys’
fees and any other amounts which Borrower is discharged from paying or which
      do
      not accrue to Indebtedness due to Borrower’s discharge, and Guarantor will be
      obligated to pay such amounts as fully as if Borrower’s obligations had not been
      discharged,

    9.  If
      any
      payment applied by the Lender to Indebtedness is thereafter set aside,
      recovered, rescinded or required to be returned for any reason (including,
      without limitation, the bankruptcy, insolvency or reorganization of Borrower
      or
      any other obligor), the Indebtedness to which such payment was applied will
      for
      the purposes of this Guaranty be deemed to have continued in existence,
      notwithstanding such application, and this Guaranty will be enforceable as
      to
      such Indebtedness as fully as if such application had never been
      made.

    10.  The
      Guarantor waive(s) any claim, remedy or other right which the Guarantor may
      now
      have or hereafter acquire against Borrower or any other person obligated to
      pay
      Indebtedness arising out of the creation or performance of the Guarantor’s
      obligation under this Guaranty, including, without limitation, any right of
      subrogation, contribution, reimbursement, indemnification, exoneration or any
      right to participate in any claim or remedy the Guarantor may have against
      the
      Borrower, collateral, or other party obligated for Borrower’s debt, whether or
      not such claim, remedy, or right arises In equity, or under contract, statute
      or
      common law.

    11.  The
      Guarantor waives presentment, demand for payment, notice of dishonor or
      nonpayment, and protest of any instrument evidencing Indebtedness. The Lender
      will not be required first to resort for payment of the Indebtedness to Borrower
      or other persons or their properties, or first to enforce, realize upon or
      exhaust any collateral security for Indebtedness, before enforcing this
      Guaranty.

    12.  The
      liability of the Guarantor under this Guaranty is in addition to and is
      cumulative with all other liabilities of the Guarantor to the Lander as
      Guarantor or otherwise, without any limitation as to amount, unless the
      instrument or agreement evidencing or creating such other liability specifically
      provides to the contrary.

    13.  To
      induce
      Lander to enter into the Loan, Guarantor makes these representations and
      warranties for as long as Guaranty is in effect. Guarantor is duty organized,
      validly existing and in good standing under the laws in the jurisdiction where
      Guarantor was organized and is duty qualified, validly existing and in good
      standing in all jurisdictions in which Guarantor operates or Guarantor owns
      or
      leases property. Guarantor has the power and authority to enter into this
      transaction and to carry on Guarantor’s business or activity as now conducted.
      The execution, delivery and performance of this Guaranty and the obligation
      evidenced by this Guaranty: are within Guarantor’s duly authorized powers; has
      received all necessary governmental approval; will not violate any provision
      of
      law or order of court or governmental agency; and will not violate any agreement
      to which Guarantor is a party or to which Guarantor is or any of Guarantor’s
      property is subject. Other than previously disclosed in writing to Lender,
      Guarantor has not changed Guarantor’s name or principal place of business within
      the last ton years and has not used any other trade or fictitious name. Without
      Lender’s prior written consent, Guarantor does not and will not use any other
      name and will preserve Guarantor’s existing name, trade names and franchises.
      Guarantor owns or leases all property that Guarantor needs to conduct
      Guarantor’s business and activities. All of Guarantor’s property is free and
      clear of all liens, security interests, encumbrances and other adverse claims
      and interests, except those Lender previously agreed to in writing. Guarantor
      is
      not violating any laws, regulations, rules, orders, judgments or decrees
      applicable to [missing
      text]

    




    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Schedule
      of Additional Guaranty Agreements

    


    In
      reliance on Instruction 2 to Regulation S-K, Item 601, MISCOR is not filing
      additional Guaranties Agreements that are identical to the one filed herewith,
      except for the parties. MISCOR signed a Guaranty guaranteeing the obligations
      of
      each of the following subsidiaries:

    


    1.
      Magnetech Industrial Services, Inc.

    2.
      Magnetech Power Services, LLC

    3.
      Martell Electric, LLC

    


    Each
      of
      the following signed a Guaranty guaranteeing the obligations of
      MISCOR:

    


    1.
      HK
      Engine Components, LLC

    2.
      Magnetech Industrial Services, Inc.

    3.
      Magnetech Power Services, LLC

    4.
      Martell Electric, LLC