Line of Credit Agreement


     

    Exhibit
      10.1


    

      

        

          

             

              
                	
                        MISCOR
                          GROUP, LTD., HK ENGINE COMPONENTS, LLC,

                        MAGNETECH
                          INDUSTRIAL SERVICES, INC., MAGNETECH

                        POWER
                          SERVICES, LLC, MARTELL ELECTRIC, LLC

                        1125
                          S. WALNUT STREET

                        SOUTH
                          BEND, IN 46619

                        .

                         

                      	 	
                        MFB
                          FINANCIAL

                        4100
                          Edison Lakes Parkway, Suite 300

                        MISHAWAKA,
                          IN 46545

                      	 
	
                        BORROWER’S
                          NAME AND ADDRESS

                        “I”
                          includes each borrower above, jointly and severally

                      	 	
                        LENDER’S
                          NAME AND ADDRESS

                        “You”
                          means the lender, its successors and assigns.

                      	
                        Line
                          of Credit No. 70-0028852 

                        Date:
                          3-9-07   

                        Max.
                          Credit Amt. $
                          5,000,000.00 

                        Loan
                          Ref. No.   

                      


              

            

          

        

      

    

    


    You
      have
      extended to me a line of credit in the AMOUNT of FIVE MILLION AND NO/100
      __________________________$5,000,000.

     

    You
      will
      make loans to me from time to time until 4:00 P.M. on DEMAND. Although the
      line
      of credit expires on that date, I will remain obligated to perform all my duties
      under this agreement so long as I owe you any money advanced according to the
      terms of this agreement, as evidenced by any note or notes I have signed
      promising to repay those amounts.

     

    This
      line
      of credit is an agreement between you and me. It is not intended that any third
      party receive any benefit from this agreement, whether by direct payment,
      reliance for future payment or in any other manner. This agreement is not a
      letter of credit.

     

    1.
      AMOUNT: This line of credit is:

     

    x 
      OBLIGATORY: You may not refuse to make a loan to me under this line of credit
      unless one of the following occurs:

     

    a.
      I have
      borrowed the maximum amount available to me;

     

    b.
      This
      line of credit has expired;

     

    c.
      I have
      defaulted on the note (or notes) which show my indebtedness under this line
      of
      credit;

     

    d.
      I have
      violated any term of this line of credit or any note or other agreement entered
      into in connection with this line of credit;

     

    e.
      ____________________________________

     

     ̈
      DISCRETIONARY: You may refuse to make a loan to me under this line of credit
      once the aggregate outstanding advances equal or exceed

     

    ___________________________________________________________________
      $ ___________________________.

     

    Subject
      to the obligatory or discretionary limitations above, this line of credit
      is:

     

    x
      OPEN-END
      (Business or Agricultural only): I may borrow up to the maximum amount of
      principal more than one time.

    

       ̈ CLOSED-END:
        I may borrow up to the maximum only one time.

       

    

    2.
      PROMISSORY NOTE: I will repay any advances made according to this line of credit
      agreement as set out in the promissory note, I signed on 02-28-2007, or any
      note(s) I sign at a later time which represent advances under this agreement.
      The note(s) set(s) out the terms relating to maturity, interest rate, repayment
      and advances. If indicated on the promissory note, the advances will be made
      as
      follows:

     

    TELEPHONE
      ADVANCES MAY BE MADE WITH THE OFFICER'S APPROVAL, FUNDS WILL BE DEPOSITED INTO
      THE BORROWER'S OPERATING ACCOUNT

     

    3.
      RELATED DOCUMENTS: I have signed the following documents in connection with
      this
      line of credit and note(s) entered into in accordance with this line of
      credit:

     

    x
      security
      agreement dated 02-28-2007 Given by each borrower 

    
       ̈ mortgage
        dated

    

    x
      guaranty
      dated 02-28-2007 Given by each borrower ⁪
      ______________________________________________

    
      x
        LOAN
        AGREEMENT OF EVEN DATE HEREWITH

      
        xBORROWING
          BASE ADDENDUM OF EVEN DATE
          HEREWITH

      

    

     

    4.
      REMEDIES: If I am in default on the note(s) you may:

     

    a.
      take
      any action as provided in the related documents;

     

    b.
      without notice to me, terminate this line of credit.

     

    By
      selecting any of these remedies you do not give up your right to later use
      any
      other remedy. By deciding not to use any remedy should I default, you do not
      waive your right to later consider the event a default, if it happens
      again.

     

    5.
      COSTS
      AND FEES: If you hire an attorney to enforce this agreement I will pay your
      reasonable attorney's fees, where permitted by law. I will also pay your court
      costs and costs of collection, where permitted by law.

     

    6.
      COVENANTS: For as long as this line of credit is in effect or I owe you money
      for advances made in accordance with the line of credit, I will do the
      following:

     

    a.
      maintain books and records of my operations relating to the need for this line
      of credit;

     

    b.
      permit
      you or any of your representatives to Inspect and/or copy these
      records;

     

    c.
      provide to you any documentation requested by you which support the reason
      for
      making any advance under this line of credit;

     

    d.
      [DELETED]

     

    7.
      NOTICES: All notices or other correspondence with me should be sent to my
      address stated above. The notice or correspondence shall be effective when
      deposited in the mail, first class, or delivered to me in person.

     

    8.
      MISCELLANEOUS: This line of credit may not be changed except by a written
      agreement signed by you and me. The law of the state in which you are located
      will govern this agreement. Any term of this agreement which is contrary to
      applicable law will not be effective, unless the law permits you and me to
      agree
      to such a variation.

     

    
      	 	
              SIGNATURES:
                I
                AGREE TO THE TERMS OF THIS LINE OF CREDIT. I HAVE RECEIVED A COPY
                ON
                TODAY'S DATE.

            
	
              FOR
                THE LENDER

            	 
	
              /s/
                Donald R. Kyle

            	
              SEE
                ATTACHED SIGNATURE PAGE

            
	
              Title:
                Executive Vice President/COO

            	 
	 	 


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     


    SIGNATURE
      PAGE

     

    Note
      #70-0028852, Dated 2/28/07

     

    IN
      WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
      on
      the date and year first above written.

     

    
      	 	 	
              “Borrowers”

            
	 	 	 
	 	 	
              MISCOR
                GROUP, Ltd.

            
	 	 	 
	 	
              By:

            	
              /s/
                John A. Martell

            
	 	 	
              John
                Martell, President

            
	 	 	 
	 	 	
              HK
                ENGINE COMPONENTS, LLC

            
	 	 	 
	 	
              By:

            	
              /s/
                John A. Martell

            
	 	 	
              John
                Martell, Managing Member

            
	 	 	 
	 	 	
              MAGNETECH
                INDUSTRIAL SERVICES, INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John A. Martell

            
	 	 	
              John
                Martell, President

            
	 	 	 
	 	 	
              MAGNETECH
                POWER SERVICES, LLC

            
	 	 	 
	 	
              By:

            	
              /s/
                John A. Martell

            
	 	 	
              John
                Martell, Managing Member

            
	 	 	 
	 	 	
              MARTELL
                ELECTRIC, LLC

            
	 	 	 
	 	
              By:

            	
              /s/
                John A. Martell

            
	 	 	
              John
                Martell, Managing Member