mis_8k0118ex105.htm


    Exhibit
      10.5

    


     

    COLLATERAL
      PLEDGE AGREEMENT

     

    Date:
      January 14, 2008

     

    
      	 DEBTOR:	 MISCOR
              GROUP, LTD.


      	 	 1125
              S. Walnut Street


      	 	 South
              Bend, Indiana  46619


      	 	 Telecopier
              No. 574/232-7648


      	 	 


      	 	 


      	
              SECURED
                PARTY:

            	
              Wells
                Fargo Bank, National Association, acting through its Wells Fargo
                Business
                Credit operating division

            


      	 	 111
              East Wayne Street, 2nd Floor


      	 	 MAC
              N8622-02A


      	 	 Fort
              Wayne, Indiana 46802


      	 	 Telecopier:  260/461-6037


    

    


     1.           Security
      Interest and Collateral. To secure the payment and performance of the
      Indebtedness which MISCOR GROUP, LTD., an Indiana corporation (“MISCOR”),
      MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”), MARTELL
      ELECTRIC, LLC, an Indiana limited liability company (“Martell”), HK ENGINE
      COMPONENTS, LLC, an Indiana limited liability company (“HK”), MAGNETECH POWER
      SERVICES, LLC, an Indiana limited liability company (“MPS”) and IDEAL
      CONSOLIDATED, INC., an Indiana corporation (“Ideal”), 3-D SERVICE, LTD., an Ohio
      limited liability company (“3D”), and AMERICAN MOTIVE POWER, INC., a Nevada
      corporation (“AMP” and together with MISCOR, MIS, Martell, HK, MPS, Ideal and
      3D, the “Borrowers” and each a “Borrower”) may now or at any time hereafter owe
      to the Secured Party, the Debtor hereby grants the Secured Party a security
      interest (herein called the “Security Interest”) in all property of any kind now
      or at any time hereafter owned by the Debtor, or in which the Debtor may now
      or
      hereafter have an interest, which may now be or may at any time hereafter
      (i) come into the possession or control of the Secured Party or into the
      possession or control of the Secured Party’s agents or correspondents, whether
      such possession or control is given for collateral purposes or for safekeeping;
      or (ii) be transferred or assigned to the Secured Party by any means
      permitted under Article 8 of the Uniform Commercial Code including, but not
      limited to, all of the stock and membership interests held by the Debtor in
      each
      of the other Borrowers, together with all rights in connection with such
      property (the “Collateral”).  "Indebtedness" is used herein in its
      most comprehensive sense and means any and all advances, debts, obligations
      and
      liabilities of the  Borrowers to the Secured
      Party, heretofore, now or hereafter made, incurred or created, whether voluntary
      or involuntary and however arising, whether due or not due, absolute or
      contingent, liquidated or unliquidated, determined or undetermined, including
      under any swap, derivative, foreign exchange, hedge, deposit, treasury
      management or other similar transaction or arrangement at any time entered
      into
      by the Borrowers, or any of them, with
      the Secured Party, and whether the Borrowers may be liable individually or
      jointly with others, or whether recovery upon such Indebtedness may be or
      hereafter becomes unenforceable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      2.           Representations,
        Warranties and Covenants. The Debtor represents, warrants and covenants
        that:

       

      (a)           The
        Debtor will duly endorse, in blank, each and every instrument constituting
        Collateral by signing on said instrument or by signing a separate document
        of
        assignment or transfer, if required by the Secured Party.

       

      (b)           The
        Debtor is the owner of the Collateral free and clear of all liens, encumbrances,
        security interests and restrictions, except the Security Interest and any
        restrictive legend appearing on any instrument constituting
        Collateral.

       

      (c)           The
        Debtor will keep the Collateral free and clear of all liens, encumbrances
        and
        security interests, except the Security Interest and any restrictive legend
        appearing on any instrument constituting Collateral.

       

      (d)           The
        Debtor will pay, when due, all taxes and other governmental charges levied
        or
        assessed upon or against any Collateral.

       

      (e)           At
        any time, upon request by the Secured Party, the Debtor will deliver to the
        Secured Party all notices, financial statements, reports or other communications
        received by the Debtor as an owner or holder of the Collateral.

       

      (f)           The
        Debtor will upon receipt deliver to the Secured Party in pledge as additional
        Collateral all securities distributed on account of the Collateral such as
        stock
        dividends and securities resulting from stock splits, reorganizations and
        recapitalizations.

       

      3.           Rights
        of the Secured Party. The Debtor agrees that the Secured Party may at any
        time, whether before or after the occurrence of an Event of Default (as
        hereinafter defined) and without notice or demand of any kind, (i) notify
        the obligor on or issuer of any Collateral to make payment to the Secured
        Party
        of any amounts due or distributable thereon; (ii) in the Debtor’s name or
        the Secured Party’s name enforce collection of any Collateral by suit or
        otherwise, or surrender, release or exchange all or any part of it, or
        compromise, extend or renew for any period any obligation evidenced by the
        Collateral; (iii) receive all proceeds of the Collateral; and
        (iv) hold any increase or profits received from the Collateral as
        additional security for the Indebtedness, except that any money received
        from
        the Collateral shall, at the Secured Party’s option, be applied in reduction of
        the Indebtedness, in such order of application as the Secured Party may
        determine, or be remitted to the Debtor.

       

      4.           Events
        of Default. Each of the following occurrences shall constitute an event of
        default under this Agreement (herein called “Event of Default”): (i) the
        Borrowers shall fail to pay any or all of the Indebtedness when due, or the
        Debtor shall fail to observe or perform any covenant or agreement herein
        binding
        on it; (ii) any representation or warranty by the Debtor set forth in this
        Agreement or made to the Secured Party in any financial statements or reports
        submitted to the Secured Party by or on behalf of the Debtor shall prove
        materially false or misleading; (iii) an Event of Default, as defined in
        any
        credit agreement or

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      other
        instrument or agreement evidencing or governing any or all of the Indebtedness,
        shall occur.

       

      5.           Remedies
        upon Event of Default. Upon the occurrence of an Event of Default and at any
        time thereafter, the Secured Party may exercise any one or more of the following
        rights or remedies: (i) declare all unmatured Indebtedness to be immediately
        due
        and payable, and the same shall thereupon be immediately due and payable,
        without presentment or other notice or demand; (ii) exercise all voting and
        other rights as a holder of the Collateral; (iii) exercise and enforce any
        or
        all rights and remedies available upon default to a secured party under the
        Uniform Commercial Code as in effect from time to time in the state of
        Wisconsin, including the right to offer and sell the Collateral privately
        to
        purchasers who will agree to take the Collateral for investment and not with
        a
        view to distribution and who will agree to the imposition of restrictive
        legends
        on the certificates representing the Collateral, and the right to arrange
        for a
        sale which would otherwise qualify as exempt from registration under the
        Securities Act of 1933; and if notice to the Debtor of any intended disposition
        of the Collateral or any other intended action is required by law in a
        particular instance, such notice shall be deemed commercially reasonable
        if
        given at least 10 calendar days prior to the date of intended disposition
        or
        other action; (iv) exercise or enforce any or all other rights or remedies
        available to the Secured Party by law or agreement against the Collateral,
        against the Debtor or against any other person or property.

       

      6.           Miscellaneous.
        Any disposition of the Collateral in the manner provided in Section 5 shall
        be
        deemed commercially reasonable. This Agreement can be waived, modified, amended,
        terminated or discharged, and the Security Interest can be released, only
        explicitly in a writing signed by the Secured Party. A waiver signed by the
        Secured Party shall be effective only in the specific instance and for the
        specific purpose given. Mere delay or failure to act shall not preclude the
        exercise or enforcement of any of the Secured Party’s rights or remedies. All
        rights and remedies of the Secured Party shall be cumulative and may be
        exercised singularly or concurrently, at the Secured Party’s option, and the
        exercise or enforcement of any one such right or remedy shall neither be
        a
        condition to nor bar the exercise or enforcement of any other. All notices
        to be
        given to the Debtor shall be deemed sufficiently given if delivered or mailed
        by
        registered or certified mail, postage prepaid, or by telecopier to the Debtor
        at
        its address or telecopier number, as the case may be, set forth above or
        at the
        most recent address or telecopier number shown on the Secured Party’s records.
        All requests under Section 9-210 of the Uniform Commercial Code (i) shall
        be made in a writing signed by a person duly authorized by Debtor,
        (ii) shall be personally delivered, sent by registered or certified mail,
        return receipt requested, or by overnight courier of national reputation,
        (iii) shall be deemed to be sent when received by the Secured Party, and
        (iv) shall otherwise comply with the requirements of Section 9-210. The Debtor
        requests that the Secured Party respond to all such requests which on their
        face
        appear to come from an authorized individual and releases the Secured Party
        from
        any liability for so responding. The Debtor shall pay Secured Party the maximum
        amount allowed by law for responding to such requests. The Secured Party’s duty
        of care with respect to Collateral in its possession (as imposed by law)
        shall
        be deemed fulfilled if the Secured Party exercises reasonable care in physically
        safekeeping such Collateral or, in the

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      case
        of
        Collateral in the custody or possession of a bailee or other third person,
        exercises reasonable care in the selection of the bailee or other third person,
        and the Secured Party need not otherwise preserve, protect, insure or care
        for
        any Collateral. The Secured Party shall not be obligated to preserve any
        rights
        the Debtor may have against prior parties, to exercise at all or in any
        particular manner any voting rights which may be available with respect to
        any
        Collateral, to realize on the Collateral at all or in any particular manner
        or
        order, or to apply any cash proceeds of Collateral in any particular order
        of
        application. The Debtor will reimburse the Secured Party for all expenses
        (including reasonable attorneys’ fees and legal expenses) incurred by the
        Secured Party in the protection, defense or enforcement of the Security
        Interest, including expenses incurred in any litigation or bankruptcy or
        insolvency proceedings. This Agreement shall be binding upon and inure to
        the
        benefit of the Debtor and the Secured Party and their respective heirs,
        representatives, successors and assigns and shall take effect when signed
        by the
        Debtor and delivered to the Secured Party, and the Debtor waives notice of
        the
        Secured Party’s acceptance hereof. If any provision or application of this
        Agreement is held unlawful or unenforceable in any respect, such illegality
        or
        unenforceability shall not affect other provisions or applications which
        can be
        given effect, and this Agreement shall be construed as if the unlawful or
        unenforceable provision or application had never been contained herein or
        prescribed hereby. All representations and warranties contained in this
        Agreement shall survive the execution, delivery and performance of this
        Agreement and the creation and payment of the Indebtedness. If this Agreement
        is
        signed by more than one person as the Debtor, the term “Debtor” shall refer to
        each of them separately and to both or all of them jointly; all such persons
        shall be bound both severally and jointly with the other(s); and the
        Indebtedness shall include all debts, liabilities and obligations owed to
        the
        Secured Party by any Debtor solely or by both or several or all Debtors jointly
        or jointly and severally, and all property described in Section 1 shall be
        included as part Collateral, whether it is owned jointly by both or all Debtors
        or is owned in whole or in part by one (or more) of them.  This
        Agreement shall be governed by the internal laws (other than conflict laws)
        of
        the state of Wisconsin and, unless the context otherwise requires, all terms
        used herein which are defined in Articles 1 and 9 of the Uniform Commercial
        Code, as in effect in Wisconsin, shall have the meanings therein stated.
        Each
        party consents to the personal jurisdiction of the state and federal courts
        located in the State of Wisconsin in connection with any controversy related
        to
        this Agreement, waives any argument that venue in any such forum is not
        convenient, and agrees that any litigation initiated by any of them in
        connection with this Agreement may be venued in either the state and federal
        courts located in Milwaukee County, Wisconsin. THE PARTIES WAIVE ANY
        RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING
        TO
        THIS AGREEMENT.

       

      
        
          	 	
                  MISCOR
                    GROUP, LTD.

                
	 	 	 	 
	 	
                  By

                	 /s/
                  John A. Martell
	 	 	
                  John
                    A. Martell, President

                


        

        


      

    

     

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