Document:

exhibitforborders12238-kexte.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

           Exhibit 10.3

December 22, 2008

Borders Group, Inc. 

100 Phoenix Drive 

Ann Arbor, MI 48108

Attention:  Mr. George L. Jones,

                 President and Chief Executive Officer

EXTENSION OF PURCHASE OFFER

Ladies and Gentlemen:

     Reference is made to our letter to you, dated as of April 9, 2008 (the “Purchase Offer Letter”). Capitalized terms used but not defined have the meanings specified in the Purchase Offer Letter.

     This confirms your and our agreement that the Drop-Dead Date is hereby extended to February 16, 2009, or such later date as you and we may mutually agree in writing. Except as expressly modified hereby, all terms and conditions of the Purchase Offer Letter will remain in full force and effect.

     This letter shall be governed by and construed in accordance with the laws of the State of New York.

[signatures on following page]

 

 

	Very truly yours,  
	  
	  
	  
	PERSHING SQUARE CAPITAL MANAGEMENT, L.P.  
	By:  PS Management GP, LLC, its General Partner  
	    
	By:  /s/ William A. Ackman                               
	Name: William A. Ackman, Managing Member  

  

	Agreed to and accepted this  
	22nd day of December, 2008  
	  
	BORDERS GROUP, INC.  
	  
	  
	By:  /s/ George L. Jones                             
	Name: George L. Jones  
	Title: President and Chief Executive Officer  

-2-exhibitforborders12238-k1222.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.4     

          FIRST AMENDMENT TO THE SENIOR SECURED CREDIT AGREEMENT, dated as of December 22, 2008 (this “Amendment”), made by and among (a) Borders Group, Inc., a Michigan corporation (the “Borrower”), (b) Pershing Square Credit Partners LLC, a Delaware limited liability company (“Pershing Square” or a “Lender), (c) PSRH, Inc., a Cayman Islands exempted company (a “Lender”, and collectively with Pershing Square, the “Lenders”), and (d) Pershing Square Capital Management, L.P., a Delaware limited partnership (the “Collateral Agent” and the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement (as hereinafter defined).

RECITALS

          WHEREAS, the Borrower, the Lenders, the Collateral Agent, the Administrative Agent and certain other parties entered into that certain Senior Secured Credit Agreement, dated as of April 9, 2008 (the “Credit Agreement”);

          WHEREAS, the Borrower, the Lenders, the Collateral Agent and the Administrative Agent desire to amend the Credit Agreement in accordance with Section 14.12 of the Credit Agreement in the manner set forth in this Amendment in order to extend the Maturity Date until February 16, 2009;

          NOW, THEREFORE, in order to carry out their intent as expressed above and in consideration of the mutual agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	1.      	Section 1.1 of the Credit Agreement is hereby amended by deleting the definitions of “Administrative Agent’s Office” and “Maturity Date” and replacing them in their entirety with the following new definitions, as applicable: 
	 

“Administrative Agent’s Office. The Administrative Agent’s office located at 888 Seventh Avenue, 42nd Floor, New York, NY 10019 or at such other location as the Administrative Agent may designate from time to time.”

“Maturity Date. February 16, 2009.”

	2.      	Section 2.2.2 of the Credit Agreement is hereby amended by replacing it in its entirety with the following new provision: 
	 

“Repayment Premium. The Borrower agrees to pay to Pershing Square Capital for the account of the Lenders (i) an amount in Dollars equal to 2.25% of any principal amount of Loans repaid between the date hereof until January 15, 2009, on the date of any such repayment, and (ii) on January 15, 2009, an amount in Dollars equal to 2.25% of the principal amount of Loans then outstanding (together, (i) and (ii) shall constitute the “Repayment Premium”). Payment of the Repayment Premium shall be a condition to (i) the extension of the Maturity Date from January 15, 2009 to February 16, 2009, and (ii) the effectiveness of the repayment of the principal amount of the Loans.”

 

	3.      	Section 3.1 of the Credit Agreement is hereby amended by deleting the words “and, as a condition to the effectiveness of such payment, the Repayment Premium” therefrom. 
	 
	4.      	Section 3.2 of the Credit Agreement is hereby amended by deleting the “.” at the end thereof and replacing it with the following: “, if applicable.” 
	 
	5.      	Section 3.3 of the Credit Agreement is hereby amended by deleting the “.” at the end thereof and replacing it with the following: “, if applicable.” 
	 
	6.      	References in Sections 14.6 (b) and (c) of the Credit Agreement to “29th Floor” shall be amended and restated to read “42nd Floor.” 
	 
	7.      	References in the Credit Agreement to “this Credit Agreement” or any particular Section thereof shall be deemed to refer to the Credit Agreement or such Section as amended hereby. 
	 
	8.      	Except as amended hereby, the Credit Agreement remains unmodified and is in full force and effect. 
	 
	9.      	This Amendment may be executed in two or more counterparts, each of which constitutes an original and all of which, when taken together, constitute one agreement. This Amendment may be delivered by facsimile and when executed and so delivered, shall be an original for all purposes. 
	 
	10.      	THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                  IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.

	                                                               BORROWER:

	  		BORDERS GROUP, INC.
	  
	  
	 		By: /s/ Edward W. Wilhelm
	                		 		Name: 	  	Edward W. Wilhelm  
	               		 		Title: 	  	Senior Vice President, Finance  
	  	  	and Chief Financial Officer  

	 		LENDERS:  		 	  	  
	  
	  
	 		PERSHING SQUARE CREDIT
	               		PARTNERS LLC  
	  
	  
	  	  	 		PERSHING SQUARE CAPITAL  
	  	  	  		MANAGEMENT, L.P., its Managing 
	                                	 	By:  		Member  
	  
	  	  	  		PS MANAGEMENT GP, LLC, its 
	                	   	By: 		General Partner  
	  
	               	   	By: 		/s/ William A. Ackman 
	  	  	  	  	Name:  William A. Ackman  
	  	  		  	Title:     Managing Member  
	  
	  
	  
	                 		PSRH, INC.
	  
	  
	  	  	 		PERSHING SQUARE CAPITAL  
	  	  	  		MANAGEMENT, L.P., its Authorized 
	                 	  	By:  		Representative 
	  
	  	  	  		PS MANAGEMENT GP, LLC, its 
	                	  	By:  		General Partner 
	  
	               	  	By:    	  	/s/ William A. Ackman  
	  	  	  	  	Name:  William A. Ackman  
	  	  	 	  	Title:     Managing Member  

	 		ADMINISTRATIVE 
	 		AGENT/COLLATERAL AGENT: 
	  
	  
	 		PERSHING SQUARE CAPITAL
	              		MANAGEMENT, L.P.  
	  
	  
	                              		 	 	PS MANAGEMENT GP, LLC, its 
	              		By:  		General Partner  
	  
	              		By:  	  	/s/ William A. Ackman  
	                               	  	Name:  William A. Ackman  
	                              	  	Title:     Managing Membermis_s1a3ex1056b.htm

    Exhibit
10.56b

     

     

    
 

    
      FIRST
AMENDMENT TO CREDIT AND SECURITY AGREEMENT

       

      THIS
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (the “Amendment”), dated April
15, 2008, is entered into by and among MISCOR GROUP, LTD., an Indiana
corporation (“MISCOR”), MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana
corporation (“MIS”), MARTELL ELECTRIC, LLC, an Indiana limited liability company
(“Martell”), HK ENGINE COMPONENTS, LLC, an Indiana limited liability company
(“HK”), MAGNETECH POWER SERVICES, LLC, an Indiana limited liability company
(“MPS”), IDEAL CONSOLIDATED, INC., an Indiana corporation (“Ideal”), 3-D
SERVICE, LTD., an Ohio limited liability company (“3D”), and AMERICAN MOTIVE
POWER, INC., a Nevada corporation (“AMP” and together with MISCOR, MIS, Martell,
HK, MPS, Ideal and 3D, the “Borrowers” and each a “Borrower”) and WELLS FARGO
BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Wells Fargo
Business Credit operating division.

       

      RECITALS

       

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

       

      The
Borrowers have requested that the Lender provide a term advance based on the
Borrowers' Equipment and modify certain provisions of the Borrowing Base, which
the Lender is willing to do pursuant to the terms and conditions set forth
herein.

       

      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 applicable, the following
definitions:

       

       “Advance”
means a Revolving Advance, the Real Estate Advance, or the Term
Advance.

       

      “Borrowing
Base” means at any time the lesser of:

       

      (a)           The
Maximum Line Amount; or

       

      (b)           Subject
to change from time to time in the Lender's sole discretion, the sum
of:

       

      (i)           The
lesser of (A) the sum of (1) the product of the Accounts Advance Rate times Eligible
Accounts of each of MIS, HK, MPS, 3D, Martell, Ideal and AMP, plus (2) the lesser
of (x) the product of the Special Accounts Advance Rate times Eligible
Progress Accounts of each of Martell and Ideal, or (y) $2,000,000, or (B)
$13,750,000, less

       

      (ii)           The
Borrowing Base Reserve, less

       

      (iii)           The
Personal Property Tax Reserve, less

       

      (iv)           The
Real Estate Tax Reserve, less

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (v)           The
Landlord Reserve, less

       

      (vi)           Indebtedness
that any Borrower owes to the Lender that has not yet been advanced on the
Revolving Note, including, without limitation, the L/C Amount, and the dollar
amount that the Lender in its reasonable discretion then determines to be a
reasonable determination of each Borrower's credit exposure with respect to any
swap, derivative, foreign exchange, hedge, deposit, treasury management or other
similar transaction or arrangement offered to any Borrower by Lender that is not
described in Article II of this Agreement.

       

      “'Eligible
Progress Accounts” means, as to each of Martell or Ideal, all unpaid Accounts of
such Borrower which constitute progress billings, but which otherwise meet the
eligibility requirements for Eligible Accounts other than the provisions of part
(iii) of the definition of Eligible Accounts.

       

      “First
Amendment” means that certain First Amendment to Credit and Security Agreement
dated April 15, 2008 among MISCOR, MIS, Martell, HK, MPS, Ideal, 3D and AMP and
the Lender.

       

      “Landlord
Reserve” means, as of any date of determination, an amount equal to up to three
(3) times the aggregate monthly rental for those leased Premises of the
Borrowers for which the Lender has not received a Landlord Disclaimer and
Consent or similar agreement in form and content acceptable to the
Lender.

       

      “Loan
Documents” means this Agreement, the Revolving Note, the Real Estate Note, the
Term Note, each Guaranty, each Subordination Agreement, each L/C Application,
each Standby Letter of Credit Agreement and the Security Documents, together
with every other agreement, note, document, contract or instrument to which any
Borrower now or in the future may be a party and which is required by the
Lender.

       

      “Net
Forced Liquidation Value” means a professional opinion of the estimated most
probable net cash proceeds which could typically be realized at a properly
advertised and conducted public auction sale without reserve, held under forced
sale conditions and under economic trends current within sixty (60) days of the
appraisal. The opinion may consider physical location, difficulty of removal,
adaptability, specialization, marketability, physical condition, overall
appearance and psychological appeal.

       

      “Note”
means the Revolving Note, the Real Estate Note, or the Term Note and “Notes”
means the Revolving Note, the Real Estate Note and the Term Note.

       

       “Special
Accounts Advance Rate” means up to forty percent (40%), or such lesser rate as
the Lender in its sole discretion may deem appropriate from time to time,
including, without limitation, in the event the Borrowers hereafter request that
the Lender make Advances based on Inventory.

       

       “Term
Advance” is defined in Section 2.17.

       

       “Term
Note” means the Borrowers' promissory note, payable to the order of the Lender
in substantially the form of Exhibit A to the First
Amendment, as same may be renewed and amended from time to time, and all
replacements thereto.

       

      
        
           

        

        
          - 2 -

          
            

          

        

        
           

        

      

      In
addition to the foregoing, part (iii) of the definition of “Eligible Accounts”
shall be amended to read as follows:

       

      (iii)           That
portion of Accounts not yet earned by the final delivery of goods by such
Borrower to the account debtor, or that portion of Accounts not yet earned by
the final rendition of services by such Borrower to the account
debtor;

       

      2.           Amendment of Sections 2.8(h)
and 2.8(i). Section 2.8(h) and 2.8(i) of the Credit Agreement shall be
amended to read as follows:

       

      (h)           Prepayment
Fees. The Borrowers may prepay the principal amount of the Real Estate
Note or the Term Note at any time, whether voluntarily or by acceleration,
subject to the payment of fees as follows: If the Real Estate Note or the Term
Note is prepaid for any reason, the Borrowers shall pay to the Lender a
prepayment fee in an amount equal to (i) two percent (2.0%) of the amount
prepaid, if prepayment occurs on or before the first anniversary of the Funding
Date; (ii) one percent (1.0%) of the amount prepaid, if prepayment occurs after
the first anniversary of the Funding Date but on or before the second
anniversary of the Funding Date; and (iii) one half percent (.50%) of the amount
prepaid, if prepayment occurs after the second anniversary of the Funding
Date.

       

      The
Borrowers acknowledge that prepayment may result in Lender incurring additional
costs, expenses and/or liabilities, and that it is difficult to ascertain the
full extent of such costs, expenses and/or liabilities. The Borrowers therefore
agree to pay the above-described prepayment fee and agree that said prepayment
fee represents a reasonable estimate of the prepayment costs, expenses and/or
liabilities of the Lender.

       

      (i)           Contracted Funds
Breakage Fees. The Borrowers may prepay the principal amount of any Note
at any time, whether voluntarily or by acceleration, provided, however, that if the
principal amount of any LIBOR Advance is prepaid, the Borrowers shall pay to the
Lender immediately upon demand a contracted funds breakage fee equal to the sum
of the discounted monthly differences for each month from the month of
prepayment through the month in which such Interest Period matures, calculated
as follows for each such month:

       

      
        	
                 
      

              	
                (i)

              	
                Determine the
      amount of interest which would have accrued each month on the amount
      prepaid at the interest rate applicable to such amount had it remained
      outstanding until the last day of the applicable Interest
      Period.

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                Subtract from
      the amount determined in (i) above the amount of interest which would have
      accrued for the same month on the amount prepaid for the remaining term of
      such Interest Period at LIBOR in effect on the date of prepayment for new
      loans made for such term in a principal amount equal to the amount
      prepaid.

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                If
      the result obtained in (ii) for any month is greater than zero, discount
      that difference by LIBOR used in (ii)
above.

              

      

       

      The
Borrower acknowledges that a prepayment of any of the Revolving Note, the Real
Estate Note or the Term Note may result in the Lender incurring additional
costs, expenses or liabilities, and that it is difficult to ascertain the full
extent of such costs, expenses or liabilities. The Borrower therefore agrees to
pay the above-described

       

      
        
           

        

        
          - 3 -

          
            

          

        

        
           

        

      

      contracted
funds breakage fee and agrees that this fee represents a reasonable estimate of
the contracted funds breakage costs, and any expenses or liabilities of the
Lender.

       

      3.           Addition of Section 2.17 and
Section 2.18. A new Section 2.17 and a new Section 2.18 shall be added to
the Agreement to read as follows:

       

      Section
2.17 Term
Advance.

       

      (a)           The
Lender agrees, subject to the terms and conditions of this Agreement, to make a
single advance to the Borrowers on the date the conditions in Paragraph 6 of the
First Amendment and the applicable conditions of Section 4.1 hereof have been
satisfied (the “Term Advance”) in the amount of One Million Five Hundred
Thousand Dollars ($1,500,000). The Borrowers' joint and several obligation to
pay the Term Advance shall be evidenced by the Term Note and shall be secured by
the Collateral as provided in Article III and the Mortgage.

       

      (b)           Upon
fulfillment of the applicable conditions set forth herein, the Lender shall
disburse the proceeds of the Term Advance in the manner specified in Section
2.2(d).

       

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

       

      (a)           In
equal monthly installments of Thirty One Thousand Two Hundred Fifty Dollars
($31,250), beginning on June 1, 2008, and on the 1st day of each month
thereafter prior to the funding of the Real Estate Advance; and

       

      (b)           Upon
the funding of the Real Estate Advance, an additional installment of Five
Hundred Thousand Dollars ($500,000), and thereafter in equal monthly
installments of Twenty Thousand Eight Hundred Thirty Three Dollars ($20,833),
beginning on the 1st day of the first month following the funding of the Real
Estate Advance, and continuing on the 1st day of each month thereafter;
and

       

      (c)           If
the 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 the Lender, shall in the 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.

       

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

       

      (d)           On
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
7.1(a). Section 7.1(a) of the Agreement shall be amended to read as
follows:

       

      
        
           

        

        
          - 4 -

          
            

          

        

        
           

        

      

      (a)    Default in
the payment of the Revolving Note, the Real Estate Note, the Term Note, or any
Obligation of Reimbursement, or any default with respect to any other
Indebtedness due from Borrowers to Lender as such Indebtedness becomes due and
payable;

       

      5.           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.

       

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

       

      (a)    The “Term
Note; in the form attached hereto as Exhibit A, duly executed by
the Borrowers.

       

      (b)    A First
Amendment to Real Estate Mortgage, Security Agreement and Assignment of Leases
and Rents by MIS in favor of the Lender, duly executed by MIS (the “Mortgage
Amendment”).

       

      (c)    With Respect
to each Borrower, a Certificate of the Secretary of the Borrower certifying as
to (i) the resolutions of the directors of the Borrower approving the execution
and delivery of this Amendment and the Term Note, (ii) the fact that the
Constituent Documents of the Borrower, which were certified and delivered to the
Lender pursuant to the Certificate of Authority of the Borrower's secretary
effective December 14, 2007, 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 the 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 the Term Note and all other documents,
agreements and certificates on behalf of the Borrower.

       

      (d)    Such other
matters as the Lender may require.

       

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

       

      (a)    The Borrower
has all requisite power and authority to execute. this Amendment, the Term Note,
the Mortgage Amendment (as to MIS only) and any other agreements or instruments
required hereunder and to perform all of its obligations hereunder, and this
Amendment, the Term Note, the Mortgage Amendment (as to MIS only) and all such
other agreements and instruments has been duly executed and delivered by the
Borrower and constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their terms.

       

      (b)    The
execution, delivery and performance by the Borrower of this Amendment, the Term
Note, the Mortgage Amendment (as to MIS only) and any other agreements or
instruments required hereunder have been duly authorized by all necessary action
and do 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

       

      
        
           

        

        
          - 5 -

          
            

          

        

        
           

        

      

      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.

       

      8.           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
Security Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.

       

      9.           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 the
Lender, whether or not known to the Lender and whether or not existing on the
date of this Amendment.

       

      10.           Release. Each
Borrower hereby absolutely and unconditionally release and forever discharge the
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.

       

      11.           Costs and Expenses.
The Borrower hereby reaffirms its agreement under the Credit Agreement to pay or
reimburse the Lender on demand for all costs and expenses incurred by the 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 Borrower specifically agrees to pay all
reasonable fees and disbursements of counsel to the 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 the 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.

       

      12.           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.

      
        
           

        

        
          - 6 -

          
            

          

        

        
           

        

      

      

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

       

      

      
        	
                WELLS
      FARGO BANK, NATIONAL, ASSOCIATION

              	 
      	
                MISCOR
      GROUP, LTD

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/
      Ronald H. Yandry

              	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Ronald
      H. Yandry, Vice President

              	 
      	 
      	
                John
      A. Martell, Chief Executive Officer

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

       

      
        	
                MAGNETECH
      INDUSTRIAL SERVICES,

              	 
      	
                MARTELL
      ELECTRIC, LLC

              
	
                INC.

              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/
      John A. Martell

              	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                John
      A. Martell, Chief Executive Officer

              	 
      	 
      	
                John
      A. Martell, Chief Executive Officer

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

       

      
        	
                HK
      ENGINE COMPONENTS, LLC

              	 
      	
                MAGNETECH
      POWER SERVICES, LLC

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/
      John A. Martell

              	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                John
      A. Martell, Chief Executive Officer

              	 
      	 
      	
                John
      A. Martell, Chief Executive Officer

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

       

      
        	
                IDEAL
      CONSOLIDATED, INC.

              	 
      	
                3-D
      SERVICE, LTD.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/
      John A. Martell

              	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                John
      A. Martell, Chief Executive Officer

              	 
      	 
      	
                John
      A. Martell, Chief Executive Officer

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

       

      
        	
                AMERICAN
      MOTIVE POWER, INC.

              	 
      	 
      	 
      
	
                By:

              	
                /s/
      John A. Martell

              	 
      	 
      	 
      
	 
      	
                John
      A. Martell, Chief Executive Officer

              	 
      	 
      	 
      

      

      

      
        
           

        

        
          - 7 -

          
            

          

        

        
           

        

      

      Exhibit
B to Credit and Security Agreement

      

      TERM
NOTE

       

      

       

      
        	$1,500,000.00	 April ____,
      2008

      

                                  

      

      For value
received, the undersigned, MISCOR GROUP, LTD., an Indiana corporation
(“MISCOR”), MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”),
MARTELL ELECTRIC, LLC, an Indiana limited liability company (“Martell”), HK
ENGINE COMPONENTS, LLC, an Indiana limited liability company (“HK”), MAGNETECH
POWER SERVICES, LLC, an Indiana limited liability company (“MPS”) and IDEAL
CONSOLIDATED, INC., an Indiana corporation (“Ideal”), 3-D SERVICE, LTD., an Ohio
limited liability company (“3D”) and AMERICAN MOTIVE POWER, INC., a Nevada
corporation (“AMP” and together with MISCOR, MIS, Martell, HK, MPS, Ideal and
3D, the “Borrowers” and each a “Borrower”), 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 Five Hundred
Thousand Dollars ($1,500,000) 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.

       

      
        
           

        

        
          - 8 -

          
            

          

        

        
           

        

      

      

       

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

       

      

      
        	 
      	
                MISCOR
      GROUP, LTD.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                MAGNETECH
      INDUSTRIAL SERVICES, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                MARTELL
      ELECTRIC, LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	 
      	 
      
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                HK
      ENGINE COMPONENTS, LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                MAGNETECH
      POWER SERVICES, LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                IDEAL
      CONSOLIDATED, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      
	 
      	
                3-D
      SERVICE, LTD.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      	 
      

      

      

      
        
           

        

        
          - 9 -

          
            

          

        

        
           

        

      

      

      
        	 
      	
                AMERICAN
      MOTIVE POWER, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      John A. Martell

              
	 
      	
                Name:
      John A. Martell

              
	 
      	
                Its:
      Chief Executive Officer

              

      

      

      

      
- 10
-

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