Document:

EX-10.2

 Exhibit 10.2 
 TERM NOTE 
  

			
	 $1,000,000.00
	  	November 30, 2011

 For value received, the undersigned, 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”), hereby jointly and severally promise to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Wells Fargo Business Credit operating division, on the Termination Date set forth
in the Credit and Security Agreement dated January 14, 2008, as amended, that was entered into by the Lender and the Borrowers (as amended from time to time, the “Credit Agreement”), at Lender’s office located at Milwaukee,
Wisconsin, or at any other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of One Million Dollars ($1,000,000) or the aggregate unpaid principal
amount of the Term Advance made by the Lender to the Borrowers under the Credit Agreement together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a
360-day year, from the date hereof until this Term Note is fully paid at the rate from time to time in effect under the Credit Agreement. 
 This Term Note is the Term Note referred to in the Credit Agreement, and is subject to the terms of, the Credit Agreement, which provides, among other things, for acceleration hereof. Principal and
interest due hereunder shall be payable as provided in the Credit Agreement, and this Term Note may be prepaid only in accordance with the terms of the Credit Agreement. This Term Note is secured, among other things, pursuant to the Credit Agreement
and the Security Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. 

The Borrowers hereby agree to pay all costs of collection, including reasonable attorneys’ fees and legal expenses in the event this
Term Note is not paid when due, whether or not legal proceedings are commenced. 

 Presentment or other demand for payment, notice of dishonor and protest are expressly
waived. 
  

			
	MISCOR GROUP, LTD.
		
	By:	 	 
	Name:	 	Michael P. Moore
	Its:	 	Chief Executive Officer
	
	MAGNETECH INDUSTRIAL SERVICES, INC.
		
	By:	 	 
	Name:	 	Michael P. Moore
	Its:	 	Chief Executive Officer
	
	HK ENGINE COMPONENTS, LLC
		
	By:	 	 
	Name:	 	Michael P. Moore
	Its:	 	Chief Executive OfficerEX-10.3

 Exhibit 10.3 
 LOAN EXTENSION AND MODIFICATION AGREEMENT 
 THIS AGREEMENT,
(“Agreement”) made on November 30, 2011, at Canton, Ohio, by and among 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. (“Lender”), an Ohio corporation with an address at 6424 Selkirk Circle
NW, Canton, Ohio 44718. 
 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, which such note was amended and restated on December 1, 2010 (collectively, 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 Second 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 Second 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 additional
payments of principal, a first priority interest in certain collateral (subject to the prior interests of Wells Fargo Bank, National Association (“Wells Fargo”), and certain other changes (the “Loan Modification”). 

AGREEMENT: 

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

  
 1 

 1. Incorporation of Recitals. All of the recitals set forth above, including the
definitions, are incorporated herein by reference. 
 2. Second Amendment and Restatement of Note. The Note will be
amended and restated as set forth in the form of the Second Amended and Restated Promissory Note, labeled as Exhibit A, attached and incorporated herein by reference (the “Second Amended Note”). 

3. Continued Effect of Intercreditor Agreement and Cross-Default. XGen III, Ltd. (“XGen”), an Ohio limited liability
company, 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 Second Amended Note, the XGen Note as amended in connection with loan 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 BDeWees Security Agreement and the XGen Security Agreement, respectively, as amended. Any default under any one of the following four documents
– the Second Amended Note, the BDeWees Security Agreement, as amended, the XGen Note as amended in connection with the XGen Loan Modification, and the XGen Security Agreement, as amended – shall also constitute a default under the
remaining three of those documents. 
 4. 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 certain extra payments of principal to Lender on the Second Amended Note (each a “Special Repayment”) as follows: 

(a) Scheduled Special Repayments. Borrowers shall make Special Repayments on the dates and in the amounts set forth below: 

(i) November 30, 2011- $316,666; 
 (ii) December 29, 2011- $300,000; and 
 (iii) No later than June 30,
2012- $250,000. 
 In addition to the Special Payments set forth in this subsection (a), Borrowers shall make regularly scheduled
payments as more fully set forth in the Second Amended Note. 

  
 2 

 (b) Additional Special Repayment. An additional Special Repayment shall be owed in the
circumstances described below. 
 “Change in Control”. At any time there is a Change of Control (as defined in
this paragraph) of a Borrower as a result of or contemporaneously with an exchange or issuance of securities to one or more persons, Borrowers will be required to pay the then remaining principal balance (plus all then accrued but unpaid interest)
under the Second Amended Note. 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 other transaction involving a Borrower) in which: (A) 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 (B) for MISCOR, any person, company or organization, not a five percent (5%) or more shareholder as of the date of this
Agreement, acquires record beneficial ownership of more than fifty percent (50%) of MISCOR’s outstanding capital stock. 
 (c) Application and Effect of Special Repayment. Any Special Repayment shall be applied to reduce outstanding principal on the Second Amended Note; provided, however, that if Borrowers are
at that time delinquent in any installment payment or other amount then owed under the Second 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 Second Amended Note will be deemed to prevent or excuse any delinquency in making installment payments under the Second Amended Note, nor will any Special Repayment be deemed any type of prepayment of
one or more monthly installment payments under the Second Amended Note. Except as expressly provided above in this subsection (iv), each Special Repayment shall be applied to principal payments in the inverse order of their due date. 

Notwithstanding the foregoing, Lender acknowledges that payment of the foregoing Special Repayments shall be subject to the terms of a
Subordination Agreement in favor of Wells Fargo. 
 5. Lender’s Consent for Additional Indebtedness. Neither
Borrower shall incur additional indebtedness 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 sole discretion. For purposes of this Agreement the
term “Permitted Indebtedness” shall mean (a)  

  
 3 

 
amounts owed from time to time to Wells Fargo pursuant to its revolving and term loan facility (including any obligations pursuant to letters of credit issued thereunder) in the maximum aggregate
amount of $6,000,000, (b) existing notes and capital leases with (i) Centier in the amount of $103,697, (ii) Freeman-Spicer in the amount of $100,671 and (iii) Visalia Equipment Lease in the amount of $868,279, (d) amounts
owed to John A. Martell (“Martell”) in the amount of $2,078,841, (e) certain miscellaneous other capital leases in the amount of $18,778 and (f) indebtedness incurred for capital expenditures that do not exceed $100,000 in the
aggregate per calendar year and is secured only by the capital asset acquired with the indebtedness. 
 Notwithstanding anything to the
contrary, neither Borrower shall make any scheduled payment or prepayment of principal to Martell on account of loans or other extensions of credit or any other financial accommodations or payment to Martell (other than for reasonable compensation
for services provided to a Borrower, including reasonable expenses), excepts as follows: 
  

	 	(A)	$316,666 payment of principal on November 30, 2011; 

  

	 	(B)	$120,000 payment of principal on December 29, 2011; 

  

	 	(C)	$250,000 payment of principal, no later than June 30, 2012; and 

  

	 	(D)	Commencing January 1, 2012, monthly payments of principal of $7,500 a month, increasing to $12,500 a month on January 1, 2013. 

6. Effective Date. This Agreement shall be effective as of the date all of the following conditions precedent have been met, in
the sole discretion of Lender: 
  

	 	(a)	 Borrowers shall have provided copies of the executed loan documents among Borrowers and Martell, reflecting (i) the payment schedule set forth in
Paragraph 5 above, (ii) a maturity date no earlier than October 31, 2013, (iii) an interest rate of (A) the Prime Rate plus two percent (2%), with a minimum interest rate of seven and one half of one percent (7 1/2%) through February 28, 2013, and (B) the Prime Rate
plus two percent (2%), with a minimum interest rate of nine and one half of one percent (9 1/2%) commencing March 1, 2013 and thereafter, and (iv) no prior security interest in Lender’s Collateral. 

 

	 	(b)	Borrowers shall have provided copies of the executed loan documents (including all amendments) among Borrowers and Wells Fargo, reflecting (A) a maximum borrowing
amount of $6,000,000, (b) consent to the indebtedness to Lender, and (c) except as otherwise provided in Lender’s Subordination Agreement in favor of Wells Fargo, no prohibition on Lender’s ability to enforce its rights against
Lender’s Collateral or ability to receive, for its sole benefit, proceeds from enforcement against Lender’s Collateral. 

  
 4 

	 	(c)	Borrowers shall have provided evidence to Lender that Lender has a second priority lien on Lender’s Collateral consisting of: 

(i) All of Magnetech’s machinery, equipment, tools and dies, hand tools, motor vehicles, rolling stock, leasehold improvements,
furniture, supplies, office equipment, computers and other data processing hardware, improvements, parts and other tangible personal property used or held for use in the operation of Magnetech (but only that which is located at Magnetech’s
Massillon Site or which is used at or in connection with or arises from the operation of or otherwise pertains to Magnetech’s business at its Massillon Site), whether now existing or hereafter arising, whether now owned or hereafter acquired or
whether now or hereafter subject to any rights in the foregoing property; and 
 (ii) All of Magnetech’s inventory (but only
that which is located at Magnetech’s Massillon Site or which is used at or in connection with or arises from the operation of or otherwise pertains to Magnetech’s business at its Massillon Site), (“Inventory”), now owned and
hereafter acquired, including, but not limited to, all raw materials, work-in-process, parts, finished goods, merchandise, and other personal property held for sale or lease or to be furnished under a contract of service for Magnetech’s own
account and all replacements, improvements, substitutions, attachments, accessories, and accessions thereon or thereto; 
 (iii)
All of Magnetech’s receivables (but only that which is located at Magnetech’s Massillon Site or which is used at or in connection with or arises from the operation of or otherwise pertains to Magnetech’s business at its Massillon
Site), (“Receivables”), now existing and hereafter coming into existence, including, but not limited to, accounts, contract rights, chattel paper, notes, drafts, acceptances, and other forms of receivables; 

(each as more fully set forth in the Security Agreement). 
 7. Governing Law; Jurisdiction. This Agreement shall be construed in 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. 
 8. Release of Claims. In consideration of this Agreement, each Borrower hereby releases and discharges Lender and its respective shareholders, directors, member, officers, 

  
 5 

 
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 Borrowers or any security interest related thereto. 
 9. No Set-Offs. 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. 

10. 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. 
 11. 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. 

12. 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. 
 13.
Controlling Effect. The provisions of this Agreement (including those provisions incorporated herein by reference) shall apply to, and control in the event of any conflict with or ambiguity in, any and all of the documents referred to or
incorporated by reference in this Agreement. 

  
 6 

 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:	 	Michael P. Moore
		 	Title:	 	President & CEO
	
	MISCOR Group, Ltd, an Indiana corporation
		
	By:	 	 
		 	Name:	 	Michael P. Moore
		 	Title:	 	President & CEO
	
	BDeWees, Inc., an Ohio corporation
		
	By:	 	 
		 	Bernard L. DeWees, its President

  
 7 

 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
November 30, 2011, by a duly authorized officer of XGen III, Ltd. 
  

			
	XGen III, Ltd., an Ohio limited liability company
		
	By:	 	 
		 	Thomas J. Embrescia, its President

  
 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]