Document:

Form of Commercial Security Agreement

    Exhibit
      10.3

     

    

       

        
          	
                  DEBTOR
                    NAME AND ADDRESS

                	
                  SECURED
                    PARTY NAME AND ADDRESS

                
	
                  MISCOR
                    GROUP, LTD.

                	
                  MFB
                    Financial

                
	
                  1125
                    S. WALNUT STREET

                	
                  4199
                    EDISON LAKES PARKWAY, SUITE 300

                
	
                  SOUTH
                    BEND, IN 46819

                	
                  MISHAWAKA,
                    IN 46545

                
	 	 
	
                  Type: ̈ individual
                     ̈
                    partnership  ̈
                    corporation  ̈________________

                  State
                    of organization/registration (if applicable) IN   

                   ̈
                    If
                    checked, refer to addendum fro additional Debtors and
                    signatures.

                

        

      

      

      COMMERCIAL
        SECURITY AGREEMENT

       

      The
        date
        of this Commercial Security Agreement (Agreement) is 3-9-07       

      SECURED
        DEBTS.
        This
        Agreement will secure all sums advanced by Secured Party under the terms
        of this
        Agreement and the payment performance of the following described Secured
        Debts
        that (check one) £
        Debtor
x MISCOR
        GROUP, LTD., HK ENGINE COMPONENTS, LLC. MAGNETECH INDUSTRIAL SERVICES, INC.,
        MAGNETECH POWER SERVICES, LLC. MARTELL ELECTRIC, LLC
        (Borrower) owes to Secured Party: 

      £ Specific
        Debts.
        The
        following debts and all extensions, renewals, refinancings, modifications,
        and
        replacements (describe):

      

      

      x All
        Debts.
        All
        present and future debts, even if this Agreement is not referenced, the debts
        are also secured by other collateral, or the future debt is unrelated to
        or of a
        different type than the current debt. Nothing in this Agreement is a commitment
        to make future loans or advances.

      SECURITY
        INTEREST.
        To
        secure the payment and performance of the Secured Debts, Debtor gives Secured
        Party a security interest in all of the Property described in this Agreement
        that Debtor owns or has sufficient rights in which to transfer an interest,
        now
        or in the future, wherever the Property is or will be located, and all proceeds
        and products of the Property. “Property” includes all parts, accessories,
        repairs, replacements, improvements, and accessions to the Property; any
        original evidence of title or ownership; and all obligations that support
        the
        payment or performance of the Property. “Proceeds” includes anything acquired
        upon the sale, lease, license, exchange, or other disposition of the Property;
        any rights and claims arising from the Property; and any collections and
        distributions on account of the Property. This Agreement remains in effect
        until
        terminated in writing, even if the Secured Debts are paid and Secured Party
        is
        no longer obligated to advance funds to Debtor or Borrower.

      PROPERTY
        DESCRIPTION.
        The
        Property is described as follows:

      x
        Accounts
        and Other Rights to Payment: All rights to payment, whether or not earned
        by
        performance, including, but not limited to, payment for property or services
        sold, leased, rented, licensed, or assigned. This includes any rights and
        interests (including all liens) which Debtor may have by law or agreement
        against any account debtor or obligor of Debtor.

      £ Inventory:
        All
        inventory held for ultimate sale or lease, or which has been or will be supplied
        under contracts of service, or which are raw materials, work in process,
        or
        materials used or consumed in Debtor’s business.

      £ Equipment:
        All
        equipment including, but not limited to, machinery, vehicles, furniture,
        fixtures, manufacturing equipment, farm machinery and equipment, shop equipment,
        office and record keeping equipment, parts, and tools. The Property includes
        any
        equipment described in a list or schedule Debtor gives to Secured Party,
        but
        such a list is not necessary to create a valid security interest in all of
        Debtor’s equipment.

      £ Instruments
        and Chattel Paper:
        All
        instruments, including negotiable instuunents and promissory notes and any
        other
        writings or records that evidence the right to payment of a monetary obligation,
        and tangible and electronic chattel paper.

      £ General
        Intangibles:
        All
        general intangibles including, but not limited to, tax refunds, patents and
        applications for patents, copyrights, trademarks, trade secrets, goodwill,
        trade
        names, customer lists, permits and franchises, payment intangibles, computer
        programs and all supporting information provided in connection with a
        transaction relating to computer programs, and the right to use Debtor’s
        name.

      £ Documents:
        All
        documents of titre including, but not limited to, bills of lading, dock warrants
        and receipts, and warehouse receipts.

      £ Farm
        Products and Supplies:
        All farm
        products including, but not limited to, all poultry and livestock and their
        young, along with their produce, products, and replacements; all crops, annual
        or perennial, and all products of the crops; and all feed, seed, fertilizer,
        medicines, and other supplies used or produced in Debtor’s farming
        operations,

      £ Government
        Payments and Programs:
        All
        payments, accounts, general intangibles, and benefits including, but not
        limited
        to, payments in kind, deficiency payments, letters of entitlement, warehouse
        receipts, storage payments, emergency assistance and diversion payments,
        production flexibility contracts, and conservation reserve payments under
        any
        preexisting, current, or future federal or state government
        program.

      £ Investment
        Property:
        All
        investment property including, but not limited to, certificated securities,
        uncertificated securities, securities entitlements, securities accounts,
        commodity contracts, commodity accounts, and financial assets.

      £ Deposit
        Accounts: All
        deposit accounts including, but not limited to, demand, time, savings, passbook,
        and similar accounts.

      £ Specific
        Property Description:
        The
        Property includes, but is not limited by, the following (if required, provide
        real estate description):

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      GENERAL
        PROVISIONS.
        Each
        Debtor’s obligations under this Agreement are independent of the obligations of
        any other Debtor, Secured Patty may sue each Debtor individually or together
        with any other Debtor. Secured Party may release any part of the Property
        and
        Debtor will remain obligated under this Agreement. The duties and benefits
        of
        this Agreement will bind the successors and assigns of Debtor and Secured
        Party.
        No modification of this Agreement is effective unless made in writing and
        signed
        by Debtor and Secured Party. Whenever used, the plural includes the singular
        and
        the singular includes the plural. Time is of the essence,

      

      APPLICABLE
        LAW.
        This
        Agreement is governed by the laws of the state in which Secured Party is
        located. In the event of a dispute, the exclusive forum, venue, and place
        of
        jurisdiction will be the state in which Secured Party is located, unless
        otherwise required by law. If any provision of this Agreement is unenforceable
        by law, the unenforceable provision will be severed and the remaining provisions
        will still be enforceable.

      

      NAME
        AND LOCATION.
        Debtor’s name indicated on page 1 is Debtor’s exact legal name. If Debtor is an
        individual, Debtor’s address is Debtor’s principal residence. If Debtor is not
        an individual, Debtor’s address is the location of Debtor’s chief executive
        offices or sole place of business. If Debtor is an entity organized and
        registered under state law, Debtor has provided Debtor’s state of registration
        on page 1. Debtor will provide verification of registration and location
        upon
        Secured Party’s request. Debtor will provide Secured Party with at least 30 days
        notice prior to any change in Debtor’s name, address, or state of organization
        or registration..

      

      WARRANTIES
        AND REPRESENTATIONS.
        Debtor
        has the right, authority, and power to enter into this Agreement. The execution
        and delivery of this Agreement will not violate any agreement governing Debtor
        or Debtor’s property, or to which Debtor is a party. Debtor makes the following
        warranties and representations which continue as long as this Agreement is
        in
        effect:

      	(1)  	
              Debtor
                is duly organized and validly existing in all jurisdictions in which
                Debtor does business;

            

      	(2)  	
              the
                execution and performance of the terms of this Agreement have been
                duly
                authorized, have received all necessary governmental approval, and
                will
                not violate any provision of law or
                order;

            

      	(3)  	
              other
                than previously disclosed to Secured Party, Debtor has not changed
                Debtor’s name or principal place of business within the last 10 years and
                has not used any other trade or fictitious name;
                and

            

      	(4)  	
              Debtor
                does not and will not use any other name without Secured Party’s prior
                written consent.

            

      Debtor
        owns all of the Property, and Secured Party’s claim to the Property is ahead of
        the claims of any other creditor, except as otherwise agreed and disclosed
        to
        Secured Party prior to any advance on the Secured Debts. The Property has
        not
        been used for any purpose that would violate any laws or subject the Property
        to
        forfeiture or seizure. 

      

      DUTIES
        TOWARD PROPERTY.
        Debtor
        will protect the Property and Secured Party’s interest against any competing
        claim. Except as otherwise agreed, Debtor will keep the Property in Debtor’s
        possession at the address indicated on page 1 of this Agreement. Debtor will
        keep the Property in good repair and use the Property only for purposes
        specified on page 1. Debtor will not use the Property in violation of any
        law
        and will pay all taxes and assessments levied or assessed against the Property.
        Secured Party has the right of reasonable access to inspect the Property,
        including the right to require Debtor to assemble and make the Property
        available to Secured Party. Debtor will immediately notify Secured Party
        of any
        loss or damage to the Property. Debtor will prepare and keep books, records,
        and
        accounts about the Property and Debtor’s business, to which Debtor will allow
        Secured Party reasonable access. Debtor will not sell, offer to sell, license,
        lease, or otherwise transfer or encumber the Property without Secured Party’s
        prior written consent. Any disposition of the Property will violate Secured
        Party’s rights, unless the Property is inventory sold in the ordinary course of
        business at fair market value. If the Property includes chattel paper or
        instruments, either as original collateral or as proceeds of the Property,
        Debtor will record Secured Party’s interest on the face of the chattel paper or
        instruments. If the Property includ accounts, Debtor will not settle any
        account
        for less than the full valu d` ispose of the accounts by assignment, or make
        any
        material change in the terms of any account without Secured Party’s prior
        written consent. Debtor will collect all accounts in the ordinary course
        of
        business, unless otherwise required by Secured Party. Debtor will keep the
        proceeds of the accounts, and any goads returned to Debtor, in trust for
        Secured
        Party and will not commingle the proceeds or returned goods with any of Debtor’s
        other property. Secured Party has the right to require Debtor to pay Secured
        Party the full price on any returned items. Secured Party may require account
        debtors to make payments under the accounts directly to Secured Party, Debtor
        will deliver the accounts to Secured Party at Secured Party’s request. Debtor
        will give Secured Party all statements, reports, certificates, lists of account
        debtors (showing names, addresses, and amounts owing), invoices applicable
        to
        each account, and any other data pertaining to the accounts as Secured Party
        requests.

      If
        the
        Property includes farm products, Debtor will provide Secured Party [text
        cut
        off]

      

      INSURANCE.
        Debtor
        agrees to keep the Property insured against the risks reasonably associated
        with
        the Property until the Property is released from this Agreement. Debtor will
        maintain this insurance in the amounts Secured Party requires. Debtor may
        choose
        the insurance company, subject to Secured Party’s approval, which will not be
        unreasonably withheld. Debtor will have the insurance provider name Secured
        Party as loss payee on die insurance policy. Debtor will give Secured Party
        and
        the insurance provider immediate notice of any loss. Secured Party may apply
        the
        insurance proceeds toward the Secured Debts. Secured Party may require
        additional security as a condition of permitting any insurance proceeds to
        be
        used to repair or replace the Property. If Secured Party acquires the Property
        in damaged condition, Debtor’s rights to any insurance policies and proceeds
        will pass to Scoured Parry to the extent of the Secured Debts. Debtor will
        immediately notify Secured Parry of the cancellation or termination of
        insurance. If Debtor fails to keep the Property insured, or fails to provide
        Secured Party with proof of insurance, Secured Party may obtain insurance
        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      to
        protect Secured Party’s interest in the Property. The insurance may include
        coverages not originally required of Debtor, may be written by a company
        other
        than one Debtor would choose, and may be written at a higher rate than Debtor
        could obtain if Debtor purchased the insurance. 

      

      AUTHORITY
        TO PERFORM.
        Debtor
        authorizes Secured Party to do anything Secured Party deems reasonably necessary
        to protect the Property and Secured Party’s interest in the Property. If Debtor
        fails to perform any of Debtor’s duties under this Agreement, Secured Party is
        authorized, without notice to Debtor, to perform the duties or cause them
        to be
        performed. These authorizations include, but are not limited to, permission
        to
        pay for the repair, maintenance, and preservation of the Property and take
        any
        action to realize the value of the Property. Secured Party’s authority to
        perform for Debtor does not create an obligation to perform, and Secured
        Party’s
        failure to perform will not preclude Secured Party from exercising any other
        rights under the law or this Agreement. If Secured Party performs for Debtor,
        Secured Party will use reasonable care. Reasonable care will not include
        any
        steps necessary to preserve rights against prior parties or any duty to take
        action in connection with the management of the Property.

      If
        Secured Party comes into possession of the Property, Secured Party will preserve
        and protect the Property to the extent required by law. Secured Party’s duty of
        care with respect to the Property will be satisfied if Secured Party exercises
        reasonable care in the safekeeping of the Property or in the selection of
        a
        third party in possession of the Property. Secured Party may enforce the
        obligations of an account debtor or other person obligated on the Property.
        Secured Party may exercise Debtor’s rights with respect to the account debtor’s
        or other person’s obligations to make payment or otherwise render performance to
        Debtor, and enforce any security interest that secures such obligations.
        

      

      PURCHASE
        MONEY SECURITY INTEREST.
        If the
        Property includes items purchased with the Secured Debts, the Property purchased
        with the Secured Debts will remain subject to Secured Party’s security interest
        until the Secured Debts are paid in full. Payments on any non-purchase money
        loan also secured by this Agreement will not be applied to the purchase money
        loan. Payments on the purchase money loan will be applied first to the
        non-purchase money portion of the loan, if any, and then to the purchase
        money
        portion in the order in which the purchase money Property was acquired. If
        the
        purchase money Property was acquired at the same time, payments will be applied
        in the order Secured Party selects. No security interest will be terminated
        by
        application of this formula.

      

      DEFAULT.
        Debtor
        will be in default if:

      	(1)  	
              Debtor
                (or Borrower, if not the same) fails to make a payment in full when
                due;

            

      	(2)  	
              Debtor
                fails to perform any condition or keep any covenant on this or any
                debt or
                agreement Debtor has with Secured Party;

            

      	(3)  	
              a
                default occurs under the terms of any instrument or agreement evidencing
                or pertaining to the Secured Debts;

            

      	(4)  	
              anything
                else happens that either causes Secured Party to reasonably believe
                that
                Secured Party will have difficulty in collecting the Secured Debts
                or
                significantly impairs the value of the Property.
                

            

      

      REMEDIES.
        After
        Debtor defaults, and after Secured Party gives any legally required notice
        and
        opportunity to cure the default, Secured Party may at Secured Party’s option do
        any one or more of the following: 

      	(1)  	
              make
                all or any part of the Secured Debts immediately due and accrue interest
                at the highest post-maturity interest
                rate;

            

      	(2)  	
              require
                Debtor to gather the Property and make it available to Secured Party
                in a
                reasonable fashion;

            

      	(3)  	
              enter
                upon Debtor’s premises and take possession of all or any part of Debtor s
                property for purposes of preserving the Property or its value and
                use and
                operate Debtor’s property to protect Secured Party’s interest, all without
                payment or compensation to Debtor;

            

      	(4)  	
              use
                any remedy allowed by state or federal law, or provided in any agreement
                evidencing or pertaining to the Secured
                Debts.

            

      If
        Secured Party repossesses the Property or enforces the obligations of an
        account
        debtor, Secured. Party may keep or dispose of the Property as [text cut
        off]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Schedule
        of Additional Commercial Security Agreements

      

      In
        reliance on Instruction 2 to Regulation S-K, Item 601, MISCOR is not filing
        additional Commercial Security Agreements that are identical to the one filed
        herewith, except for the parties. The following Debtor’s entered into identical
        Commercial Security Agreements with MFB Financial:

      

      1.
        HK
        Engine Components, LLC

      

      2.
        Magnetech Industrial Services, Inc.

      

      3.
        Magnetech Power Services, LLC

      

      4.
        Martell Electric, LLCEX-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

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