Document:

Guaranty Agreement

 Exhibit 10.8 

 

			
	 Guaranty Agreement
	 	

  
 THIS
GUARANTY AGREEMENT (this “Guaranty”) is made and entered into as of this      day of December, 2012, by HK ENGINE COMPONENTS, LLC (the “Guarantor”), with an address at 800 Nave
Road, Southeast, Massillon, Ohio 44646, in consideration of the extension of credit by PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 213 Market Avenue North, Suite 250, Canton, Ohio 44702, to MISCOR
GROUP, LTD. (the “Borrower”), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. 
 1. Guaranty of Obligations. The Guarantor hereby unconditionally guarantees, as a primary obligor, the prompt payment and performance of all loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Bank or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of any kind or nature, present or future (including any interest accruing thereon after maturity, or
after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by any note, guaranty or other
instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, (v) under
any interest or currency swap, future, option or other interest rate protection or similar agreement, (vi) under or by reason of any foreign currency transaction, forward, option or other similar transaction providing for the purchase of one
currency in exchange for the sale of another currency, or in any other manner, or (vii) arising out of overdrafts on deposit or other accounts or out of electronic funds transfers (whether by wire transfer or through automated clearing houses
or otherwise) or out of the return unpaid of, or other failure of the Bank to receive final payment for, any check, item, instrument, payment order or other deposit or credit to a deposit or other account, or out of the Bank’s non-receipt of or
inability to collect funds or otherwise not being made whole in connection with depository or other similar arrangements; and any amendments, extensions, renewals and increases of or to any of the foregoing, and all costs and expenses of the Bank
incurred in the documentation, negotiation, modification, enforcement, collection and otherwise in connection with any of the foregoing, including reasonable attorneys’ fees and expenses (collectively, the “Obligations”). If
the Borrower defaults under any such Obligations, the Guarantor will pay the amount due to the Bank. 
 2. Nature of
Guaranty; Waivers. This is a guaranty of payment and not of collection and the Bank shall not be required or obligated, as a condition of the Guarantor’s liability, to make any demand upon or to pursue any of its rights against the
Borrower, or to pursue any rights which may be available to it with respect to any other person who may be liable for the payment of the Obligations. 
 This is an absolute, unconditional, irrevocable and continuing guaranty and will remain in full force and effect until all of the Obligations have been indefeasibly paid in full, and the Bank has
terminated this Guaranty. This Guaranty will remain in full force and effect even if there is no principal balance outstanding under the Obligations at a particular time or from time to time. This Guaranty will not be affected by any surrender,
exchange, acceptance, compromise or release by the Bank of any other party, or any other guaranty or any security held by it for any of the Obligations, by any failure of the Bank to take any steps to perfect or maintain its lien or security
interest in or to preserve its rights to any security or other collateral for any of the Obligations or any guaranty, or by any irregularity, unenforceability or invalidity of any of the Obligations or any part thereof or any security or other
guaranty thereof. The Guarantor’s obligations hereunder shall not be affected, modified or impaired by any counterclaim, set-off recoupment, deduction or defense based upon any claim the Guarantor may have (directly or indirectly) against the
Borrower or the Bank, except payment or performance of the Obligations. 

 Notice of acceptance of this Guaranty, notice of extensions of credit to the Borrower from
time to time, notice of default, diligence, presentment, notice of dishonor, protest, demand for payment, and any defense based upon the Bank’s failure to comply with the notice requirements under Sections 9-611 and 9-612 of the Uniform
Commercial Code as in effect from time to time are hereby waived. The Guarantor waives all defenses based on suretyship or impairment of collateral. 
 The Bank at any time and from time to time, without notice to or the consent of the Guarantor, and without impairing or releasing, discharging or modifying the Guarantor’s liabilities hereunder, may
(a) change the manner, place, time or terms of payment or performance of or interest rates on, or other terms relating to, any of the Obligations; (b) renew, substitute, modify, amend or alter, or grant consents or waivers relating to any
of the Obligations, any other guaranties, or any security for any Obligations or guaranties; (c) apply any and all payments by whomever paid or however realized including any proceeds of any collateral, to any Obligations of the Borrower in
such order, manner and amount as the Bank may determine in its sole discretion; (d) settle, compromise or deal with any other person, including the Borrower or the Guarantor, with respect to any Obligations in such manner as the Bank deems
appropriate in its sole discretion; (e) substitute, exchange or release any security or guaranty; or (f) take such actions and exercise such remedies hereunder as provided herein. 

3. Repayments or Recovery from the Bank. If any demand is made at any time upon the Bank for the repayment or recovery of
any amount received by it in payment or on account of any of the Obligations and if the Bank repays all or any part of such amount by reason of any judgment, decree or order of any court or administrative body or by reason of any settlement or
compromise of any such demand, the Guarantor will be and remain liable hereunder for the amount so repaid or recovered to the same extent as if such amount had never been received originally by the Bank. The provisions of this section will be and
remain effective notwithstanding any contrary action which may have been taken by the Guarantor in reliance upon such payment, and any such contrary action so taken will be without prejudice to the Bank’s rights hereunder and will be deemed to
have been conditioned upon such payment having become final and irrevocable. 
 4. Financial Statements. Unless
compliance is waived in writing by the Bank or until all of the Obligations have been paid in full, the Guarantor will promptly submit to the Bank such information relating to the Guarantor’s affairs (including but not limited to annual
financial statements and tax returns for the Guarantor) or any security for the Guaranty as the Bank may reasonably request. 

5. Enforceability of Obligations. No modification, limitation or discharge of the Obligations arising out of or by virtue
of any bankruptcy, reorganization or similar proceeding for relief of debtors under federal or state law will affect, modify, limit or discharge the Guarantor’s liability in any manner whatsoever and this Guaranty will remain and continue in
full force and effect and will be enforceable against the Guarantor to the same extent and with the same force and effect as if any such proceeding had not been instituted. The Guarantor waives all rights and benefits which might accrue to it by
reason of any such proceeding and will be liable to the full extent hereunder, irrespective of any modification, limitation or discharge of the liability of the Borrower that may result from any such proceeding. 

6. Events of Default. The occurrence of any of the following shall be an “Event of Default”: (i) any
Event of Default (as defined in any of the Obligations); (ii) any default under any of the Obligations that does not have a defined set of “Events of Default” and the lapse of any notice or cure period provided in such Obligations
with respect to such default; (iii) demand by the Bank under any of the Obligations that have a demand feature; (iv) the Guarantor’s failure to perform any of its obligations hereunder; (v) the falsity, inaccuracy or material
breach by the Guarantor of any written warranty, representation or statement made or furnished to the Bank by or on behalf of the Guarantor; or (vi) the termination or attempted termination of this Guaranty. Upon the occurrence of any Event of
Default, (a) the Guarantor shall pay to the Bank the amount of the Obligations; or (b) on demand of the Bank, the Guarantor shall immediately deposit with the Bank, in U.S. dollars, all amounts due or to become due under the Obligations,
and the Bank may at any time use such funds to repay the Obligations; or (c) the Bank in its discretion may exercise with respect to any collateral any one or more of the rights and remedies provided a secured party under the applicable version
of the Uniform Commercial Code; or (d) the Bank in its discretion may exercise from time to time any other rights and remedies available to it at law, in equity or otherwise. 

  
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 7. Right of Setoff. In addition to all liens upon and rights of setoff against
the Guarantor’s money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Guarantor’s obligations to the Bank under this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a contractual right of setoff against, and the Guarantor hereby grants Bank a security interest in, and hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the Guarantor’s right, title and
interest in and to, all of the Guarantor’s deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial
Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest
and right of setoff may be exercised without demand upon or notice to the Guarantor. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank,
although the Bank may enter such setoff on its books and records at a later time. 
 8. Collateral. This Guaranty
is secured by the property described in any collateral security documents which the Guarantor executes and delivers to the Bank and by such other collateral as previously may have been or may in the future be granted to the Bank to secure any
Obligations of the Guarantor to the Bank. 
 9. Costs. To the extent that the Bank incurs any costs or expenses in
protecting or enforcing its rights under the Obligations or this Guaranty, including reasonable attorneys’ fees and the costs and expenses of litigation, such costs and expenses will be due on demand, will be included in the Obligations and
will bear interest from the incurring or payment thereof at the Default Rate (as defined in any of the Obligations). 
 10.
Postponement of Subrogation. Until the Obligations are indefeasibly paid in full, expire, are terminated and are not subject to any right of revocation or rescission, the Guarantor postpones and subordinates in favor of the Bank or its
designee (and any assignee or potential assignee) any and all rights which the Guarantor may have to (a) assert any claim whatsoever against the Borrower based on subrogation, exoneration, reimbursement, or indemnity or any right of recourse to
security for the Obligations with respect to payments made hereunder, and (b) any realization on any property of the Borrower, including participation in any marshalling of the Borrower’s assets. 

11. Power to Confess Judgment. The Guarantor hereby irrevocably authorizes any attorney-at-law, including an attorney employed
by or retained and paid by the Bank, to appear in any court of record in or of the State of Ohio, or in any other state or territory of the United States, at any time after the Obligations become due, whether by acceleration or otherwise, to waive
the issuing and service of process and to confess a judgment against the Guarantor in favor of the Bank, and/or any assignee or holder hereof for the amount of the Obligations then appearing due from the Guarantor under this Guaranty, together with
costs of suit and thereupon to release all errors and waive all right of appeal or stays of execution in any court of record. The Guarantor hereby expressly (i) waives any conflict of interest of the attorney(s) retained by the Bank to confess
judgment against the Guarantor upon this Guaranty, and (ii) consents to the receipt by such attorney(s) of a reasonable legal fee from the Bank for legal services rendered for confessing judgment against the Guarantor upon this Guaranty. A copy
of this Guaranty, certified by the Bank, may be filed in each such proceeding in place of filing the original as a warrant of attorney. 
 12. Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be
effective upon receipt. Notices may be given in any manner to which the Bank and the Guarantor may separately agree, including electronic mail. Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service
are hereby agreed to as acceptable methods for giving Notices. Regardless of the manner in which provided, Notices may be sent to addresses for the Bank and the Guarantor as set forth above or to such other address as either may give to the other
for such purpose in accordance with this section. 

  
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 13. Preservation of Rights. No delay or omission on the Bank’s part to
exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights and remedies
hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity. The Bank may proceed in any order against the Borrower, the Guarantor or any obligor of, or any
collateral securing, the Obligations. 
 14. Illegality. If any provision contained in this Guaranty should be
invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions of this Guaranty. 
 15. Changes in Writing. No modification, amendment or waiver of, or consent to any departure by the Guarantor from, any provision of this Guaranty will be effective unless made in a writing
signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Notwithstanding the foregoing, the Bank may modify this Guaranty for the purposes of completing missing content
or correcting erroneous content, without the need for a written amendment, provided that the Bank shall send a copy of any such modification to the Guarantor (which notice may be given by electronic mail). No notice to or demand on the Guarantor
will entitle the Guarantor to any other or further notice or demand in the same, similar or other circumstance. 
 16.
Entire Agreement. This Guaranty (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the Guarantor and
the Bank with respect to the subject matter hereof; provided, however, that this Guaranty is in addition to, and not in substitution for, any other guarantees from the Guarantor to the Bank. 

17. Successors and Assigns. This Guaranty will be binding upon and inure to the benefit of the Guarantor and the Bank and
their respective heirs, executors, administrators, successors and assigns; provided, however, that the Guarantor may not assign this Guaranty in whole or in part without the Bank’s prior written consent and the Bank at any time
may assign this Guaranty in whole or in part. 
 18. Interpretation. In this Guaranty, unless the Bank and the
Guarantor otherwise agree in writing, the singular includes the plural and the plural the singular; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the
word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; and references to sections
or exhibits are to those of this Guaranty. Section headings in this Guaranty are included for convenience of reference only and shall not constitute a part of this Guaranty for any other purpose. If this Guaranty is executed by more than one party
as Guarantor, the obligations of such persons or entities will be joint and several. 
 19. Anti-Money
Laundering/International Trade Law Compliance. The Guarantor represents and warrants to the Bank, as of the date of this Guaranty, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification
of any loan, and at all times any Obligations exist that: (A) no Guarantor (i) is listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions
(including but not limited to the blocking of property or rejections of transactions) under any order or directive of any Compliance Authority; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a
Sanctioned Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Person or Sanctioned Country in violation of any law or regulation enforced by any Compliance
Authority; (B) the proceeds of any loan will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country; and (C) each Guarantor is in compliance
with, and no 

  
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Guarantor engages in any dealings or transactions prohibited by, any laws of the United States including the USA Patriot Act, the Trading with the Enemy Act, or the U.S. Foreign Corrupt Practices
Act of 1977, all as amended, supplemented or replaced from time to time. As used herein: “Compliance Authority” means each and all of the (a) U.S. Department of the Treasury’s Office of Foreign Asset Control; (b) U.S.
Treasury Department/Financial Crimes Enforcement Network; (c) U.S. State Department/Directorate of Defense Trade Controls; (d) U.S. Commerce Department/Bureau of Industry and Security; (e) U.S. Internal Revenue Service; (f) U.S.
Justice Department; and (g) U.S. Securities and Exchange Commission. “Sanctioned Country” means a country subject to a sanctions program maintained by any Compliance Authority. “Sanctioned Person” means any
individual person, a group, regime, entity or thing subject to, or specially designated under, any sanctions program maintained by any Compliance Authority. 
 20. Indemnity. The Guarantor agrees to indemnify each of the Bank, each legal entity, if any, who controls, is controlled by or is under common control with the Bank and each of their
respective directors, officers and employees (the “Indemnified Parties”), and to defend and hold each Indemnified Party harmless from and against, any and all claims, damages, losses, liabilities and expenses (including all fees and
charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation and preparation therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person,
entity or governmental authority (including any person or entity claiming derivatively on behalf of the Guarantor), in connection with or arising out of or relating to the matters referred to in this Guaranty, whether (a) arising from or
incurred in connection with any breach of a representation, warranty or covenant by the Guarantor, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened, whether based
on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to any claims, damages, losses, liabilities and
expenses solely attributable to an Indemnified Party’s gross negligence or willful misconduct. The indemnity agreement contained in this Section shall survive the termination of this Guaranty and assignment of any rights hereunder. The
Guarantor may participate at its expense in the defense of any such claim. 
 21. Governing Law and Jurisdiction.
This Guaranty has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank’s office indicated above is located. THIS GUARANTY WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
GUARANTOR DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE
THE BANK’S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT
OF LAWS RULES. The Guarantor hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank’s office indicated above is
located; provided that nothing contained in this Guaranty will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Guarantor individually, against any security or against any property of
the Guarantor within any other county, state or other foreign or domestic jurisdiction. The Guarantor acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Guarantor. The Guarantor waives any
objection to venue and any objection based on a more convenient forum in any action instituted under this Guaranty. 
 22.
Equal Credit Opportunity Act. If the Guarantor is not an “applicant for credit” under Section 202.2 (e) of the Equal Credit Opportunity Act of 1974 (“ECOA”), the Guarantor acknowledges that (i) this
Guaranty has been executed to provide credit support for the Obligations, and (ii) the Guarantor was not required to execute this Guaranty in violation of Section 202.7(d) of the ECOA. 

23. Authorization to Obtain Credit Reports. By signing below, each Guarantor who is an individual provides written
authorization to the Bank or its designee (and any assignee or potential assignee) to obtain the Guarantor’s personal credit profile from one or more national credit bureaus. Such authorization shall extend to obtaining a credit profile in
considering this Guaranty and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account. 

  
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         24. WAIVER OF
JURY TRIAL. THE GUARANTOR IRREVOCABLY WAIVES ANY AND ALL RIGHT
THE GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED
IN ANY OF SUCH DOCUMENTS. THE GUARANTOR ACKNOWLEDGES THAT THE FOREGOING
WAIVER IS KNOWING AND VOLUNTARY. 
 The
Guarantor acknowledges that it has read and understood all the provisions of this Guaranty, including the confession of judgment and waiver of jury trial, and has been advised by counsel as necessary or appropriate. 

WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

  

WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT
JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO
COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE. 

  

									
	WITNESS / ATTEST:	 		 	HK ENGINE COMPONENTS, LLC
			
		 		 	By: MISCOR GROUP, LTD., its Member
				
	  
	 		 	        By:	 	 
		 		 		 		 	(SEAL)
	Print Name:	 	 	 		 		 	Michael P. Moore
	Title:	 	 	 		 		 	Chief Executive Officer and President
	 (Include title only if an officer of entity signing to the right)
	 		 		 	

  
 - 6 -Base Borrowing Rider

 Exhibit 10.9 

 

			
	Borrowing Base Rider	 	

  
 THIS
BORROWING BASE RIDER (“Rider”) is executed this      day of December, 2012, by and between MISCOR GROUP, LTD. (the “Borrower”) with an address at 800 Nave Road, Southeast,
Massillon, Ohio 44646, and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 213 Market Avenue North, Suite 250, Canton, Ohio 44702. This Rider is incorporated into and made part of that certain Loan Agreement
dated December     , 2012, and promissory note dated December     , 2012, and also into certain other financing documents and security agreements executed by and between the Borrower and the Bank
(all such documents including this Rider are collectively referred to as the “Loan Documents”). All initially capitalized terms not otherwise defined in this Rider shall have the same meanings assigned to such terms in the other
Loan Documents. 
 Pursuant to the Loan Documents, the Bank has extended a “Facility” or “Loans” (as defined
in the Loan Documents) to the Borrower, under which the Borrower may borrow, repay and reborrow funds at any time prior to the Expiration Date (such Facility or Loans being referred to herein as the “Facility”). As a condition to
the Bank’s willingness to extend the Facility to the Borrower, the Bank and the Borrower are entering into this Rider in order to set forth their agreement regarding the maximum amount which may be outstanding under the Facility at any time,
and for the other purposes set forth below. 
 NOW, THEREFORE, with the foregoing background deemed incorporated by
reference and made a part hereof, the parties hereto, intending to be legally bound, covenant and agree as follows: 
 1.
Limitations on Borrowings Under Facility. Notwithstanding any provision to the contrary in any of the other Loan Documents, at no time shall the aggregate principal amount of indebtedness outstanding at any one time under the Facility
exceed the Borrowing Base (as hereinafter defined) at such time. If at any time the aggregate principal amount of indebtedness outstanding under the Facility exceeds the limitations set forth in this Section 1 for any reason, then the Borrower
shall immediately repay the amount of such excess to the Bank in immediately available funds. 
 2.
Borrowing Base Certificates. In addition to any and all provisions of the other Loan Documents which establish conditions to the Borrower’s ability to request and obtain any advance under the Facility, the Borrower may
not request an advance under the Facility unless a Borrowing Base Certificate (as hereinafter defined) shall have been delivered to the Bank on or before the 15th day of each month.  

3. Certain Defined Terms. In addition to the words and terms defined elsewhere in this Rider or in the other Loan
Documents, the following words and terms, as used in this Rider, shall have the following meanings: 

“Account” shall mean an “account” or a “general intangible” as defined in the Uniform Commercial
Code as in effect in the jurisdiction whose Law governs the perfection of the Bank’s security interest therein, whether now owned or hereafter acquired or arising. 
 “Account Debtor” shall mean, with respect to any Account, each Person who is obligated to make payments to the Borrower on such Account. 

“Affiliate” of the Borrower or any Account Debtor shall mean (a) any Person who (either alone or with a group of
Persons, and either directly or indirectly through one or more intermediaries) is in control of, is controlled by or is under common control with the Borrower or such Account Debtor, (b) any director, officer, partner, employee or agent of the
Borrower or such Account Debtor, and (c) any member of the immediate family of any natural person described in the preceding clauses (a) and (b). A Person or group of Persons shall be deemed to be in control of the Borrower or an Account
Debtor when such Person or group of Persons possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the Borrower or such Account Debtor, whether through the ownership of voting securities, by
contract or otherwise. 

 “Borrowing Base” at any time shall mean the lesser of
(a) $6,500,000.00 (the maximum principal amount of the Facility) and (b) the sum of (i) 85% of Qualified Accounts at such time and (ii) 50% of Qualified Inventory at such time. The value of Qualified Accounts and Qualified
Inventory at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered by the Borrower to the Bank. 
 “Borrowing Base Certificate” shall mean each Borrowing Base Certificate to be delivered by the Borrower to the Bank pursuant to Section 2 of this Rider, in substantially the form
attached as Exhibit A to this Rider, executed by the Borrower and with blanks appropriately completed, as amended, supplemented or otherwise modified from time to time. 
 “Eligible Location” shall mean one of the addresses in the United States of America at which the Borrower maintains, keeps or stores Inventory, as listed in the Security Agreement
executed and delivered by the Borrower and the Bank in connection with the Facility, and, if such location is leased by the Borrower, for which the Bank has received a landlord’s waiver acceptable to the Bank. The Borrower and the Bank may
agree jointly to add other addresses of the Borrower to such list at any time by executing and delivering a substitute list of addresses under said Security Agreement. The Bank may in its discretion at any time determine that any address on such
list shall no longer be an Eligible Location, by giving written notice of such determination to the Borrower. 

“Inventory” shall mean “inventory” as defined in the Uniform Commercial Code as in effect in the jurisdiction
whose Law governs the perfection of the Bank’s security interest therein, whether now owned or hereafter acquired and wherever located. 
 “Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body. 

“Lien” shall mean any mortgage, pledge, security interest, bailment, encumbrance, claim, lien or charge of any kind,
including any agreement to give any of the foregoing, any conditional sale or other title retention agreement and any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code.

 “Official Body” shall mean any government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of any government or political subdivision, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. 

“Person” shall mean an individual, sole proprietorship, corporation, partnership (general or limited), trust, business
trust, limited liability company, unincorporated organization or association, joint venture, joint-stock company, Official Body, or any other entity of whatever nature. 
 “Qualified Accounts” shall mean Accounts which are and at all times continue to be acceptable to the Bank in its sole discretion. Standards of acceptability include but are not limited to
the following conditions: 
 (a) The Account duly complies with all applicable Laws, whether Federal, state or local, including
but not limited to usury Laws, the Federal Truth in Lending Act, the Federal Consumer Credit Protection Act, the Fair Credit Billing Act, and Regulation Z of the Board of Governors of the Federal Reserve System; 

(b) The Account was not originated in, and is not subject to the Laws of, a jurisdiction whose Laws would make the account or the grant of
the security interest in the Account to the Bank unlawful, invalid or unenforceable; 

  
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 (c) The Account was originated by the Borrower in connection with the sale of goods or the
rendering of services by the Borrower in the ordinary course of business under an enforceable contract, and such sale has been consummated and such goods have been delivered or such services have been rendered so that the performance of such
contract has been completed by the Borrower and by all parties other than the Account Debtor; 
 (d) The Account is evidenced by
a written invoice or other documentation and arises from a contract, all of which are in form and substance satisfactory to the Bank; 
 (e) The Account does not arise out of a contract with, or order from, an Account Debtor that, by its terms, forbids or makes void or unenforceable the grant of the security interest by the Borrower to the
Bank in and to the Account arising with respect thereto; 
 (f) The title of the Borrower to the Account and, except as to the
Account Debtor, to any related goods is absolute and is not subject to any Lien except Liens in favor of the Bank; 
 (g) The
Account provides for payment in United States Dollars by the Account Debtor; 
 (h) The Account shall have amounts owing that are
not less than the amounts represented by the Borrower; 
 (i) The portion of the Account for which income has not yet been earned
or which constitutes unearned discount, service charges or deferred interest shall be ineligible; 
 (j) The Account shall be
eligible only to the extent that it is not subject to any defense, claim of reduction, counterclaim, set-off, recoupment, or any dispute or claim for credits, allowances or adjustments by the Account Debtor because of returned, inferior, damaged
goods or unsatisfactory services, or for any other reason; 
 (k) The goods the sale of which gave rise to the Account were
shipped or delivered or provided to the Account Debtor on an absolute sale basis and not on a bill and hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar terms making the
Account Debtor’s payment obligations conditional; 
 (l) The Account Debtor has not returned, rejected or refused to retain,
or otherwise notified the Borrower of any dispute concerning, or claimed nonconformity of, any of the goods from the sale of which the Account arose; 
 (m) No default exists under the Account by any party thereto, and all rights and remedies of the Borrower under the Account are freely assignable by the Borrower; 

(n) The Account has not been outstanding for more than ninety (90) days past the invoice date and is not subject to
“dating” terms; 
 (o) The Account shall be ineligible if 50% or more of the accounts of the related Account Debtor and
its Affiliates are more than ninety (90) days past due from the date of original invoice therefor; 
 (p) The Account shall
be ineligible to the extent that the aggregate amount of all the Accounts of the Account Debtor and its Affiliates exceed 25% of all of the Borrower’s Accounts; 
 (q) The Borrower has not received any note, trade acceptance, draft, chattel paper or other instrument with respect to, or in payment of, the Account, unless, if any such instrument has been received, the
Borrower immediately notifies the Bank and, at the Bank’s request, endorses or assigns and delivers such instrument to the Bank; 

  
 - 3 -

 (r) The Borrower has not received any notice of (i) the death of the Account Debtor, if
an individual, or of a partner or member thereof if a partnership or a limited liability company, (ii) the filing by or against the Account Debtor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or any similar proceeding, or (iii) any assignment by the Account Debtor for the benefit of creditors. Upon receipt by the Borrower of any such notice, it will give the Bank prompt written notice thereof; 

(s) The Account Debtor is not an Affiliate of the Borrower; 
 (t) The Account shall be ineligible if the related Account Debtor is domiciled in any country other than the United States of America or the Province of Ontario, Canada, or a Province of Canada which has
adopted and has in effect the Personal Property Security Act, unless such Account is supported by a documentary letter of credit, duly assigned to and in the possession of the Bank, from a financial institution acceptable to the Bank and the terms
and conditions of which are acceptable to the Bank; or is insured with a foreign credit insurance policy acceptable to the Bank. 

(u) The Account shall be ineligible if the Account Debtor is an Official Body, unless the Borrower shall have taken all actions deemed
necessary by the Bank in order to perfect the Bank’s security interest therein, including but not limited to any notices or filings required under the Assignment of Claims Act of 1940, as amended, or other applicable Laws; 

(v) The Bank has not deemed such Account ineligible because of uncertainty about the creditworthiness of the Account Debtor (including,
without limitation, unsatisfactory past experiences of the Borrower or the Bank with the Account Debtor or unsatisfactory reputation of the Account Debtor) or because the Bank otherwise makes a determination that the collateral value of the Account
to the Bank is impaired or that the Bank’s ability to realize such value is insecure; 
 (w) The Account shall be eligible
only to the extent that the amount owing on the Account is not a Payment Intangible; and 
 (x) The Account shall comply with the
additional eligibility standards, if any, which are set forth on Exhibit B to this Rider. 
 Standards of acceptability shall be fixed and may
be revised from time to time solely by the Bank in its exclusive judgment. In the case of any dispute about whether an Account is or has ceased to be a Qualified Account, the decision of the Bank shall be final. 

“Qualified Inventory” shall mean the Borrower’s Inventory of saleable raw materials and finished goods manufactured
or acquired by the Borrower in the ordinary course of business, subject to its control or sole possession, stored in an Eligible Location and in a manner acceptable to the Bank, valued at the lower of cost or market value (determined on a first-in,
first-out basis), which is not subject to any Lien except Liens in favor of the Bank, which complies with the additional eligibility standards, if any, which are set forth on Exhibit B to this Rider, and which is and at all times continues to be
acceptable to the Bank. Standards of acceptability shall be fixed and may be revised from time to time exclusively by the Bank in its sole discretion. In the case of any dispute about whether Inventory is or has ceased to be Qualified Inventory, the
decision of the Bank shall be final. 
 “Payment Intangible” shall mean a “payment intangible” as
defined in the Uniform Commercial Code as in effect in the jurisdiction whose Law governs the perfection of the Bank’s security interest in the Accounts. 
 4. Governing Law. This Rider will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State where the Bank’s office
indicated above is located, excluding its conflicts of laws rules. 
 5. Counterparts. This Rider may be signed in
any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an 

  
 - 4 -

 
executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Agreement by
facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission. 

WITNESS the due execution hereof as a document under seal, as of the date first written above. 

 

									
	WITNESS / ATTEST:	 		 	MISCOR GROUP, LTD.
				
	  
	 		 	By:	 	 
		 		 		 		 	(SEAL)
	Print Name:	 	 	 		 		 	Michael P. Moore
	Title:	 	 	 		 		 	Chief Executive Officer and President
	 (Include title only if an officer of entity signing to the right)
	 		 		 	
				
		 		 		 	PNC BANK, NATIONAL ASSOCIATION
					
		 		 		 	By:	 	 
		 		 		 		 	(SEAL)
		 		 		 		 	Joseph Luckring
		 		 		 		 	Senior Vice President

  
 - 5 -

 EXHIBIT A 
 TO BORROWING BASE RIDER 
  

			
	Borrowing Base Certificate	  	

 THIS BORROWING BASE CERTIFICATE, dated as of
                                        
            ,                 , is executed and delivered by the undersigned borrower (the
“Borrower”) in favor of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), pursuant to a letter agreement or loan agreement dated as of
                                        
            ,                  (including any Borrowing Base Rider executed pursuant thereto
and made a part thereof, and as amended or otherwise modified from time to time, the “Agreement”). All initially capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement. To induce the
Bank to make loans and other financial accommodations available to the Borrower under the Agreement, the Borrower hereby certifies, represents and warrants to the Bank, as of the date hereof, that (a) the person signing below is an authorized
officer or representative of the Borrower; (b) the statements below concerning the collateral securing the Obligations are true and complete; (c) the eligible collateral described below represents only Qualified Accounts and Qualified
Inventory; (d) the Borrower is in compliance with all of the terms and provisions of the Agreement and the other Loan Documents; (e) all of the Borrower’s representations and warranties in the Agreement and the other Loan Documents
are true and correct; and (f) no Event of Default has occurred and is continuing or exists. 

 

					
	1.    Collateral Availability	  	 	 
		
	 A.    Accounts Receivable
	  			
		
	1.    Beginning A/R Balance	  	 	$                        	  
	2.    Changes to A/R Balance	  	 	$                        	  
	3.    Total A/R	  	 	$                        	  
	4.    Ineligible A/R	  	 	$                        	  
	5.    Qualified A/R (L3 - L4)	  	 	$                        	  
	6.    Advance Percentage	  	 	            %	  
	 7.    A/R Borrowing Availability
        (L5 X L6)
	  	 	$                        	  
		
	B.    Inventory	  			
		
	 8.    Beginning Inventory Balance
	  	 	$                        	  
	 9.    Changes to Inventory Balance
	  	 	$                        	  
	 10.  Total Inventory
	  	 	$                        	  
	 11.  Ineligible Inventory
	  	 	$                        	  
	 12.  Qualified Inventory (L10 - L11)
	  	 	$                        	  
	 13.  Advance Percentage or Cap
	  	 	      % /$            	  
	 14.  Inv. Borrowing Availability

       (lesser of L12 X L13 or cap)
	  	 	$                        	  

					
	 	  	 	 
		
	 C.    Other Assets
	  			
		
	 15.  Other Collateral Value
	  	 	$                        	  
	 16.  Advance Percentage or Cap
	  	 	      % / $            	  
	 17.  Other Borrowing Availability

                (L15 X
L16)
	  	 	$                        	  
	 18.  Total Availability

                (Sum of L7,
L14 & L17)
	  	 	$                        	  
		
	2.    Borrowing Availability	  			
		
	 19.  Maximum Line Amount
	  	 	$                        	  
	 20.  Total Availability (L18)
	  	$	                        	  
	 21.  Maximum Borrowing Capacity (lesser of L19 and L20)
	  	$	                        	  
	 22.  Outstanding Principal Balance
	  	$	                        	  
	 23.  L/C’s, other items to be covered
	  	$	                        	  
	 24.  Available to Borrow

                L21 - L22 -
L23
	  	$	                        	  
	 25.  Advance Request
	  	$	                        	  
	 26.  New Line Balance
	  	$	                        	  
	 27.  Collateral Coverage
	  	$	                        	  

 
 

  

							
	Dated:
                                         
                       	 		 	MISCOR GROUP, LTD.
				
	Certificate No.:
                                         
                       	 		 	By:	 	 
				
		 		 		 	Michael P. Moore
				
		 		 		 	Chief Executive Officer and President

 EXHIBIT B 
 TO BORROWING BASE RIDER 
 The following shall constitute additional eligibility standards
for Accounts, as fully as if set forth in the definition of “Qualified Accounts” in the Rider to which this Exhibit B is attached: 

The following shall constitute additional eligibility standards for Inventory, as fully as if set forth in the definition of “Qualified
Inventory” in the Rider to which this Exhibit B is attached: 
 (a) Qualified Inventory shall exclude all work in process amounts

 (b) Qualified Inventory shall exclude all Slow Moving Inventory which is defined as inventory that is in excess of a one (1) year supply.

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