Document:

exv10w1

Exhibit 10.1

EIGHTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     This EIGHTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT (the “Amendment”), dated December
____, 2010, is entered into by and among MISCOR GROUP, LTD., an Indiana corporation (“MISCOR”),
MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”), and HK ENGINE COMPONENTS, LLC,
an Indiana limited liability company (“HK” and together with MISCOR and MIS, the “Borrowers” and
each a “Borrower”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”), acting through its Wells
Fargo Business Credit operating division.

RECITALS

     Lender and the Borrowers are parties to a Credit and Security Agreement dated January 14,
2008, as amended (the “Credit Agreement”).

     The Borrowers have requested that Lender extend the term of the credit facilities provided
under the Credit Agreement, which Lender is willing to do pursuant to the terms and conditions of
this Amendment.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein contained, it is agreed as follows:

     1. Defined Terms. Capitalized terms used in this Amendment which are defined in the
Credit Agreement shall have the same meanings as defined therein, unless otherwise defined herein.
In addition, Section 1.1 of the Credit Agreement shall be amended by adding or amending, as the
case may be, the following definitions:

     “HK Sale” means a sale of the membership interests in, or all or substantially all of,
the assets of, HK upon terms acceptable to Lender in its sole discretion.

     “Maturity Date” means June 30, 2011.

     In addition to the foregoing, the definition of “Eligible Accounts” shall be amended so that
clauses (i) and (xiv) read as follows:

     (i) That portion of Accounts unpaid one hundred twenty (120) days or more after the
invoice date; provided, however, that portion of the aggregate amount of
otherwise Eligible Accounts which are unpaid between ninety one (91) and one hundred twenty
(120) days after the invoice date which exceeds the following amounts during the following
periods shall also be deemed to be ineligible:

	 	 	 	 	 
	Period	 	Maximum Amount
	December ___, 2010 to January 30, 2011
	 	$	275,000	 
	January 31, 2011 to February 27, 2011
	 	$	225,000	 
	February 28, 2011 to March 30, 2011
	 	$	175,000	 

 

 

	 	 	 	 	 
	Period	 	Maximum Amount
	March 31, 2011 to April 29, 2011
	 	$	125,000	 
	April 30, 2011 to May 30, 2011
	 	$	50,000	 

; provided, further, however, that in any event upon the earlier of
consummation of the HK Sale or May 31, 2011, all Accounts unpaid ninety (90) days or more
after the invoice date shall be deemed ineligible;

     (xiv) Accounts owed by an account debtor, regardless of whether otherwise eligible, if
thirty five percent (35%) or more of the total amount of Accounts due from such account
debtor is ineligible under clauses (i), (ii), or (xi) above; provided,
however, that in any event upon the earlier of consummation of the HK Sale or
January 31, 2011, the foregoing shall automatically be amended to provide that such Accounts
will be ineligible if twenty five percent (25%) or more of the total amount of Accounts due
from such account debtor is ineligible under clauses (ii) or (xi) or, for purposes of this
clause (xiv) is deemed ineligible under clause (i) assuming all Accounts unpaid ninety (90)
days or more after the invoice date are ineligible; and

     2. Amendment of Section 2.6(a). Section 2.6(a) of the Credit Agreement shall be
amended to provide that notwithstanding anything to the contrary set forth therein, the Real Estate
Note shall be paid in full by no later than December 31, 2010. In accordance with the terms of the
Credit Agreement, Lender is authorized to make a Revolving Advance on December 31, 2010, for
payment in full of the Real Estate Note to the extent not paid prior to such date.

     3. Amendment of Section 2.18. Section 2.18 of the Credit Agreement shall be amended
to read as follows:

     Section 2.18 Payment of Term Note. The outstanding principal balance of the
Term Note as of December 31, 2010 shall be due and payable as follows:

     (a) On January 1, 2010, a monthly installment of Twenty Thousand Eight Hundred Thirty
Three Dollars ($20,833);

     (b) In equal monthly installments of Fifty Two Thousand Dollars ($52,000) beginning on
February 1, 2011, and on the first day of each month thereafter;

     (c) If Lender at any time obtains an appraisal of the Borrowers’ Equipment the value of
which was used to determine the amount of the Term Advance (the “subject Equipment”) as
permitted under Section 6.9(d) herein, and the appraisal shows the aggregate outstanding
principal balance of the Term Note to exceed one hundred percent (100%) of the Net Forced
Liquidation Value of the subject Equipment, then the Borrowers, upon demand by Lender, shall
in Lender’s discretion either make additional monthly principal payments in an amount equal
to the amount of such excess divided by twelve (12) months, or immediately prepay the Term
Note in the amount of such excess, in each case together with any prepayment or contracted
funds breakage fee due pursuant to Section 2.8;

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     (d) All prepayments of principal with respect to the Term Note shall be applied to the
most remote principal installment or installments then unpaid; and

     (e) On the earlier of the consummation of the HK Sale or the Termination Date, the
entire unpaid principal balance of the Term Note, and all unpaid interest accrued thereon,
shall in any event be due and payable.

     4. Amendment of Section 6.2. Section 6.2 of the Credit Agreement shall be amended to
read as follows:

     Section 6.2 Financial Covenants.

     (a) Stop Loss. Commencing with the 2011 fiscal year, the Borrowers will not incur a
Net Loss during any fiscal year-to-date period, as determined as of the end of each fiscal
month, in excess of Four Hundred Thousand Dollars ($400,000).

     (b) Capital Expenditures. The Borrowers collectively, will not incur or contract to
incur Capital Expenditures of more than Two Hundred Thousand Dollars ($200,000) during the
fiscal year ending December 31, 2011.

     5. Extension and Amendment of Subordinated Debt. The Borrowers have advised Lender
that BDeWees, Inc. and XGen III, Ltd. (the “3D Subordinated Creditors”) have agreed to extend the
terms of their respective notes receivable from MIS and MISCOR pursuant to the terms of those
certain Loan Extension and Modification Agreements between each of the 3D Subordinated Creditors
and MIS and MISCOR, made as of December 1, 2010 (the “Modification Agreements”). Lender hereby
consents to the terms of the Modification Agreements in the form attached hereto as Exhibit A
(being the Modification Agreement for BDeWees, Inc. with the Modification Agreement for XGen III,
Ltd. to contain the same terms) and the additional collateral to be provided to the 3D Subordinated
Creditors pursuant to the Modification Agreements, provided the 3D Subordinated Creditors reaffirm
their respective obligations under their Subordination Agreements in favor of Lender, pursuant to
the terms of that certain Amendment and Reaffirmation of Subordination Agreement in the form
attached hereto as Exhibit B (the “Reaffirmation”).

     6. No Other Changes. Except as explicitly amended by this Amendment, all of the terms
and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any
advance or letter of credit thereunder.

     7. Accommodation Fees. In consideration of Lender’s agreements herein, the Borrowers
shall pay to Lender a fully earned, non-refundable accommodation fee in the amount of Twenty Five
Thousand Dollars ($25,000) on the date hereof. Further, commencing April 1, 2011, and on the first
day of each month thereafter so long as any Indebtedness remains outstanding, additional
accommodation fees of Two Thousand Five Hundred Dollars ($2,500) per month shall be due and
payable.

     8. Conditions Precedent. This Amendment shall be effective when Lender shall have
received an executed original hereof, together with each of the following, each in substance and
form acceptable to Lender in its sole discretion:

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     (a) The Acknowledgment and Agreement of Subordinated Creditors set forth at the end of
this Amendment, duly executed by John Martell.

     (b) The Reaffirmation duly executed by each of BDeWees, Inc. and XGen III, Ltd.

     (c) With respect to each Borrower, a Certificate of the Secretary of the Borrower
certifying as to (i) the resolutions of the board of directors or manager, as applicable, of
the Borrower approving the execution and delivery of this Amendment, (ii) the fact that the
Constituent Documents of the Borrower, which were certified and delivered to Lender pursuant
to the Certificate of Authority of the Borrower’s secretary issued in connection with the
original execution of the Credit Agreement, continue in full force and effect and have not
been amended or otherwise modified except as set forth in the Certificate to be delivered,
and (iii) certifying that the officers and agents of the Borrower who have been previously
certified to Lender as being authorized to sign and to act on behalf of the Borrower
continue to be so authorized or setting forth the sample signatures of each of the officers
and agents of the Borrower authorized to execute and deliver this Amendment and all other
documents, agreements and certificates on behalf of the Borrower.

     (d) Such other matters as Lender may require.

     9. Representations and Warranties. Each Borrower (as to such Borrower) hereby
represents and warrants to Lender as follows:

     (a) The Borrower has all requisite power and authority to execute this Amendment, and
this Amendment, and has been duly executed and delivered by the Borrower and constitutes the
legal, valid and binding obligations of the Borrower, enforceable in accordance with its
terms.

     (b) The execution, delivery and performance by the Borrower of this Amendment, has been
duly authorized by all necessary action and does not (i) require any authorization, consent
or approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or
regulation or of any order, writ, injunction or decree presently in effect, having
applicability to the Borrower, or the Constituent Documents of the Borrower, or (iii) result
in a breach of or constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Borrower is a party or by which it or
its properties may be bound or affected.

     (c) All of the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as of such date,
except to the extent that such representations and warranties relate solely to an earlier
date.

     10. References. All references in the Credit Agreement to “this Agreement” shall be
deemed to refer to the Credit Agreement as amended hereby; and any and all references in the

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Security Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as
amended hereby.

     11. No Waiver. The execution of this Amendment and the acceptance of all other
agreements and instruments related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or a waiver of any breach, default or event of default
under any Security Document or other document held by Lender, whether or not known to Lender and
whether or not existing on the date of this Amendment.

     12. Release. Each Borrower hereby absolutely and unconditionally releases and forever
discharges Lender, and any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all
of the present and former directors, officers, agents and employees of any of the foregoing, from
any and all claims, demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or otherwise, which
such Borrower had, now has or has made claim to have against any such person for or by reason of
any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and
including the date of this Amendment, whether such claims, demands and causes of action are matured
or unmatured or known or unknown.

     13. Fees, Costs and Expenses. Each Borrower hereby reaffirms its agreement under the
Credit Agreement to pay or reimburse Lender on demand for all costs and expenses incurred by Lender
in connection with the Loan Documents, including without limitation all reasonable fees and
disbursements of legal counsel. Without limiting the generality of the foregoing, the Borrowers
specifically agree to pay all reasonable fees and disbursements of counsel to Lender for the
services performed by such counsel in connection with the preparation of this Amendment and the
documents and instruments incidental hereto. The Borrower hereby agrees that Lender may, at any
time or from time to time in its sole discretion and without further authorization by the Borrower,
make a loan to the Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

     14. Miscellaneous. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and all of which counterparts,
taken together, shall constitute one and the same instrument.

Signatures appear on following page.

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the date first above written.

	 	 	 	 	 	 	 	 	 	 	 

	MISCOR GROUP, LTD.	 	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Michael P. Moore, Chief Executive Officer
	 	 	 	 	 	Daniel J. Manella, Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MAGNETECH INDUSTRIAL SERVICES, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Michael P. Moore, Chief Executive Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	HK ENGINE COMPONENTS, LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Michael P. Moore, Chief Executive Officer	 	 	 	 	 	 	 	 

 

 

ACKNOWLEDGMENT AND AGREEMENT OF SUBORDINATED CREDITOR

     The undersigned, a subordinated creditor of MISCOR GROUP, LTD., an Indiana corporation
(“MISCOR”), MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”), and HK ENGINE
COMPONENTS, LLC, an Indiana limited liability company (“HK” and together with MISCOR and MIS, the
“Borrowers” and each a “Borrower”) to WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting
through its Wells Fargo Business Credit operating division pursuant to a Subordination Agreement
dated as of January 14, 2008 (the “Subordination Agreement”), hereby (i) acknowledges receipt of
the foregoing Amendment; (ii) consents to the terms and execution thereof; and (iii) reaffirms his
obligations to Lender pursuant to the terms of his Subordination Agreement.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	John A. Martell 	 
	 	 	 
	 

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Exhibit 10.2

LOAN EXTENSION AND MODIFICATION AGREEMENT

     THIS AGREEMENT, (“Agreement”) made as of December 1, 2010, at Canton, Ohio, by and between
Magnetech Industrial Services, Inc. (“Magnetech”), an Indiana corporation, and MISCOR Group, Ltd.
(“MISCOR”), an Indiana corporation, both with an address at 800 Nave Road, SE, Massillon, Ohio
44646 (collectively, “Borrowers”, and sometimes individually a “Borrower”) and BDeWees, Inc., an
Ohio corporation with an address at 6424 Selkirk Circle NW, Canton, Ohio 44718 (“Lender”).

Recitals:

     A. On or about November 30, 2007, Borrowers and Lender closed on a transaction (the
“Transaction”) in which, among other things, Borrowers became indebted, jointly and severally, to
Lender in the amount of $2,000,000.00, as evidenced by Borrowers’ promissory note dated November
30, 2007, for the principal amount of $2,000,000.00, executed and delivered to Lender and payable
to it or its order, which contained additional terms and provisions (the “Note”).

     B. Borrowers’ indebtedness to Lender as of the date hereof under all of the terms of the Note
is $2,000,000.00, plus any interest accrued on the Note since Borrowers’ last payment of interest
on the Note. Borrowers are not delinquent on payment of interest.

     C. As used in this Agreement, the term “Indebtedness” will mean Borrowers’ indebtedness to
Lender under the Amended Note (defined herein) — including principal, interest, and all other
amounts which Borrowers now and in the future may owe to Lender under the terms of the Amended Note
— together with any additional amounts Borrowers and either of them may owe now or in the future
to Lender pursuant to the terms of any of the other documents the parties executed as a part of or
in connection with the said closing of the Transaction or as a part of the Loan Modification
(defined below), including this Agreement.

     D. Borrowers wish to extend the time for Borrowers to repay the $2,000,000.00 presently owed
to Lender in exchange for a higher interest rate, monthly installment payments of principal and
interest, additional collateral which will be given to Lender as security, and certain other
changes (the “Loan Modification”).

     E. Lender is bound by a certain Subordination Agreement dated in December, 2007 (the
“Subordination Agreement”), by and between Lender and XGen III, Ltd., an Ohio limited liability
company (“XGen”), executed for the benefit of Wells Fargo Bank, NA, acting through one of its
divisions (said bank and division referred to herein as “Wells Fargo”). As a result, the

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effectiveness of each of the provisions of the Loan Modification contained or referred to in
this Agreement are contingent upon Wells Fargo’s written consent to all such amendments,
modifications, and additions.

Agreement:

     THEREFORE, in consideration of the foregoing and of the mutual agreements set forth herein,
the parties agree as follows:

     1. Incorporation of Recitals. All of the recitals set forth above, including the definitions,
are incorporated herein by reference.

     2. All Modifications Contingent on Wells Fargo Approval. The effectiveness of every one of the
amendments, modifications, additions, and sets of changes referred to or described below is
contingent on the written approval of all of the same by Wells Fargo .

     3. Amendment and Restatement of Note. The Note will be amended and restated to read
substantively as set forth in the form of Amended and Restated Promissory Note labeled as Exhibit
A, attached and incorporated herein by reference (the “Amended Note”).

     4. Amendment of Security Agreement. The Commercial Security Agreement by and between 3-D
Services, Ltd, an Ohio limited liability company (predecessor in interest by merger to Magnetech),
and Lender, dated November 30, 2007, shall be modified by amendment which shall read substantively
as set forth in Exhibit B, attached and incorporated herein by reference (the “Amended Security
Agreement”).

     5. Filing of New UCC-1 Financing Statement. A new UCC-1 Financing Statement will be filed in
the appropriate jurisdiction(s) in substantively the form labeled as Exhibit C, attached hereto and
incorporated herein by reference (the “Amended Financing Statement”).

     6. Continued Effect of Intercreditor Agreement and Cross-Default. XGen was also a party to
the Transaction in 2007, received its own promissory note from Borrowers, entered into a commercial
security agreement to secure said note, and filed a UCC-1 financing statement, just like Lender.
In order to memorialize their respective rights and obligations, Lender and XGen entered into an
Intercreditor Agreement dated November 30, 2007 (the “Intercreditor Agreement”). All provisions of
the Intercreditor Agreement shall remain in full force and effect notwithstanding the Loan
Modification; provided, however, that references in the Intercreditor Agreement to the BDeWees
Note, the BDeWees Security Agreement, the XGen Note, and the XGen Security Agreement will now refer
to, respectively, the Amended Note, the Amended Security Agreement, the XGen Note as amended in
connection with loan

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modifications identical to those for Lender (XGen’s own loan extension and modification
agreement with Borrowers, which contains those identical modifications, will sometimes be referred
to herein as the “XGen Loan Modification”), and the XGen Security Agreement as amended in
connection with the XGen Loan Modification. Any default under any one of the following four
documents — the Amended Note, the Amended Security Agreement, the XGen Note as amended in
connection with the XGen Loan Modification, and the XGen Security Agreement as amended in
connection with the XGen Loan Modification — shall also constitute a default under the remaining
three of those documents.

     7. Special Repayments Expected to Reduce Principal Payments. As a part of the Loan
Modifications, Borrowers and Lender further agree that Borrowers shall be required to make an extra
payment to Lender on the Amended Note which is expected to reduce principal (a “Special
Repayment”). A Special Repayment shall be owed in the circumstances described below, and the
amount thereof shall be defined as follows.

     (a) Triggering Sale. At any time that: (i) a Borrower sells assets, other than sales of
inventory in the ordinary course of business, in one or more related sales for at least
$1,000,000.00 (gross) or (ii) there is a Change in Control (as defined below) of a Borrower as a
result of or contemporaneously with the Borrower’s issuance of securities to one or more persons
(any type of such sale or issuance as described under (i) or (ii), above, sometimes being referred
to herein as a “Triggering Sale”), the Borrowers, jointly and severally, will be required to make a
Special Repayment from the proceeds of such Triggering Sale.

     (b) Calculation and Payment of Amount of Special Payment. From the proceeds of a Triggering
Sale, after payment of (i) all transaction related costs to third parties, not to exceed eight
percent (8%) of such proceeds, (ii) payments to Wells Fargo, not to exceed the amount of term debt
then outstanding to Wells Fargo plus the portion of revolving debt attributable to the assets
subject to the Triggering Sale, and (iii) other debt that is secured by the assets subject to the
Triggering Sale (such proceeds, after such deductions, being referred to as the “Net Proceeds”),
twelve and one half percent (12 1/2%) will be owed to Lender by Borrowers, jointly and severally,
as a Special Repayment; provided, however, that if the Triggering Sale is that of HK Engine
Components LLC the amount of the Special Repayment will be $75,000.00, and the Special Payment: (i)
will be paid to Lender as a disbursement at the time of closing by whomever is conducting the
closing, when applicable, or (ii) when there is no formal closing, will be paid by Borrowers or
their agent to Lender within two (2) business days after the proceeds of such sale or issuance
become available to a Borrower.

     (c) Definition of “Change in Control”. For purposes of this Agreement, the term “Change in
Control” shall mean a situation (whether occasioned by issuance, sales, or transfers of a
Borrower’s securities or by any merger, consolidation, recapitalization, reorganization, or

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other transaction involving a Borrower) in which: (i) for Magnetech, MISCOR no longer holds
record or beneficial ownership of more than fifty percent (50%) of Magnetech’s outstanding capital
stock and/or no longer possesses the voting power to elect directly a majority of Magnetech’s board
of directors; and (ii) for MISCOR, any person, company or organization, not a five percent or more
shareholder as of the date of this Agreement, acquires record and beneficial ownership of more than
fifty percent (50%) of MISCOR’s outstanding capital stock.

     (d) Application and Effect of Special Repayment. Any Special Repayment shall be applied to
reduce outstanding principal on the Amended Note; provided, however, that if the Borrowers are at
that time delinquent in any installment payment, interest or other amount then owed under the
Amended Note, the Special Repayment will be applied first to satisfy the delinquency and the
balance, if any, will be applied to reduce outstanding principal. Nothing in this Agreement or in
the Amended Note will be deemed to prevent or excuse any delinquency in making installment payments
under the Amended Note, nor will any Special Repayment be deemed any type of prepayment of one or
more monthly installment payments under the Amended Note. Except as expressly provided above in
this subsection (d), each Special Repayment shall be applied to principal payments in the inverse
order of their due date.

     8. Lender’s Consent for Additional Indebtedness, Prepayments. Neither Borrower shall incur
additional indebtedness that is for the purpose of, or to be used in connection with, investing in,
forming or acquiring new businesses, joint ventures or other entities, or is in excess of the
Permitted Indebtedness without the written consent of Lender given in advance which Lender may
grant or withhold in the exercise of its discretion. For purposes of this Agreement the term
“Permitted Indebtedness” shall mean (i) the current amount of the existing term loan from Wells
Fargo less amounts paid to Wells Fargo with respect to the term loan from Net Proceeds after the
date hereof, (ii) amounts owed from time to time under the Wells Fargo revolving loan facility as
such may be increased in correlation with the asset borrowing base of Borrower and under letters of
credit obtained in the ordinary course of business of Borrower; (iii) existing notes and capital
leases with Centier in the amount of $131,722, Freeman-Spicer in the amount of $142,171, Visalia
Equipment Lease in the amount of $839,946, John A. Martell in the amount of $2,079,000, and
miscellaneous other capital leases in the amount of $33,159; and (iv) indebtedness incurred for
capital expenditures that does not exceed $100,000.00 in the aggregate per calendar year and is
secured only by the capital asset acquired with the indebtedness.

Neither Borrower shall make any prepayment of principal to John A. Martell on account of loans or
other extensions of credit or other financial accommodations from Borrowers to such person.

     9. Effective Date; Governing Law; Jurisdiction. This Agreement shall be effective as of the
date set forth at the outset hereof. This Agreement shall be construed in

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accordance with the laws of the State of Ohio without regard to principles of conflict of
laws. Any action or suit commended by any of the parties hereto concerning this Agreement shall be
commenced and maintained in a court of competent jurisdiction located in the State of Ohio.

     10. Release of Claims. In consideration of this Agreement, each of the Borrowers hereby
releases and discharges Lender and its respective shareholders, directors, member, officers,
managers, employees, attorneys, affiliates and subsidiaries from any and all claims, demands,
liability and causes of action whatsoever, now known or unknown, arising prior to the date hereof
out of or in any way related to the extension or administration of the Indebtedness of the
Borrowers or any security interest related thereto. Lender hereby consents to the disposition and
sale by Magnetech of the generators sold by it during 2010 up to the date hereof.

     11. No Set-Offs. The Borrowers hereby declare that to the best of their knowledge, no
Borrower has any set offs, counterclaims, defenses or other causes of action against Lender.

     12. Counterparts; Facsimile. This Agreement may be executed in counterparts and all such
counterparts shall constitute one agreement binding on all the parties, notwithstanding that the
parties are not signatories to the same counterpart. The parties may execute this Agreement by
facsimile or e-mail PDF, and all such facsimiles or e-mail PDF signatures shall have the same force
and effect as manual signatures delivered in person.

     13. Fees and Expenses. Borrowers hereby agree, jointly and severally, to reimburse Lender for
its reasonable out-of-pocket costs, fees and expenses incurred in connection with this Agreement
and all exhibits related hereto, including, without limitation, reasonable attorneys’ fees.

     14. Representations and Warranties. Each Borrower hereby represents and warrants to Lender
that: (a) such Borrower has the legal power and authority to execute and delivery this Agreement;
(b) the officials executing this Agreement have been duly authorized to execute and deliver the
same and bind such Borrower with respect to the provisions hereof; (c) the execution and delivery
hereof by such Borrower and the performance and observance by such Borrower of the provisions
hereof do not violate or conflict with the organizational documents and agreements of such Borrower
or any law applicable to such Borrower or result in a breach of any provisions of or constitute a
default under any other agreement, instrument, or document binding upon or enforceable against such
Borrower or its properties; and (d) this Agreement constitutes a valid and binding obligation upon
such Borrower in every respect.

     15. Controlling Effect. The provisions of this Agreement (including those provisions
incorporated herein by reference) shall apply to, and control in the event of any

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conflict with or ambiguity in, any and all of the documents referred to or incorporated by
reference in this Agreement, except for the Subordination Agreement.

     IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this
Agreement in multiple counterparts at the place and effective as of the date set forth at the
outset.

	 	 	 	 	 
	 	MAGNETECH INDUSTRIAL SERVICES, INC.,

an Indiana corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MISCOR Group, Ltd, an Indiana corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 	 	 
	 	BDeWees, Inc., an Ohio corporation

 	 
	 	By:  	 	 
	 	 	Bernard L. DeWees, its President 	 
	 	 	 	 
	 

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CONSENT OF XGEN III, LTD.

     Pursuant to Section 4 of the Intercreditor Agreement (defined above), XGen III, Ltd. hereby
gives its advance written consent to the provisions contained in and referred to in the foregoing
Agreement.

     Executed at _____________________, Ohio, on ________________________, 2010, by a duly
authorized officer of XGen III, Ltd.

	 	 	 	 	 
	 	XGen III, Ltd., an Ohio limited liability company

 	 
	 	By:  	 	 
	 	 	Thomas J. Embrescia, its President 	 

APPROVAL OF LOAN MODIFICATIONS IN CONJUNCTION WITH

SUBORDINATION AGREEMENT

     The undersigned “Wells Fargo” (referred to in paragraph E of the above Recitals) hereby
consents to the loan modifications set forth in and referred to in the above Agreement and waives
any restrictions contained in the Subordination Agreement (also referred to in paragraph E of the
above Recitals) which might otherwise prohibit any one or more of such modifications or cause
either or both Borrowers to be in default of their obligations to Wells Fargo. The waivers granted
herein, however, are strictly limited to allow the various modifications that are described or
referred to above to become effective and operational; the provisions in the Subordination
Agreement to which the waivers apply shall otherwise remain in full force and effect.

     Executed at __________________________, _______________, on _______________________ , 2010, by
a duly authorized representative for Wells Fargo Bank, National Association.

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

7

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