DEBTOR NAME AND ADDRESS SECURED PARTY NAME AND ADDRESS
Exhibit
10.3
|
DEBTOR
NAME AND ADDRESS
|
SECURED
PARTY NAME AND ADDRESS
|
|
MFB
Financial
|
|
|
▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
SOUTH
BEND, IN 46819
|
MISHAWAKA,
IN 46545
|
|
Type:¨ individual
¨
partnership ¨
corporation ¨________________
State
of organization/registration (if applicable) IN
¨
If
checked, refer to addendum fro additional Debtors and
signatures.
|
|
The
date
of this Commercial Security Agreement (Agreement) is 3-9-07
SECURED
DEBTS.
This
Agreement will secure all sums advanced by Secured Party under the terms
of this
Agreement and the payment performance of the following described Secured
Debts
that (check one) £
Debtor
x MISCOR
GROUP, LTD., HK ENGINE COMPONENTS, LLC. MAGNETECH INDUSTRIAL SERVICES, INC.,
MAGNETECH POWER SERVICES, LLC. ▇▇▇▇▇▇▇ ELECTRIC, LLC
(Borrower) owes to Secured Party:
£ Specific
Debts.
The
following debts and all extensions, renewals, refinancings, modifications,
and
replacements (describe):
x All
Debts.
All
present and future debts, even if this Agreement is not referenced, the debts
are also secured by other collateral, or the future debt is unrelated to
or of a
different type than the current debt. Nothing in this Agreement is a commitment
to make future loans or advances.
SECURITY
INTEREST.
To
secure the payment and performance of the Secured Debts, Debtor gives Secured
Party a security interest in all of the Property described in this Agreement
that Debtor owns or has sufficient rights in which to transfer an interest,
now
or in the future, wherever the Property is or will be located, and all proceeds
and products of the Property. “Property” includes all parts, accessories,
repairs, replacements, improvements, and accessions to the Property; any
original evidence of title or ownership; and all obligations that support
the
payment or performance of the Property. “Proceeds” includes anything acquired
upon the sale, lease, license, exchange, or other disposition of the Property;
any rights and claims arising from the Property; and any collections and
distributions on account of the Property. This Agreement remains in effect
until
terminated in writing, even if the Secured Debts are paid and Secured Party
is
no longer obligated to advance funds to Debtor or Borrower.
PROPERTY
DESCRIPTION.
The
Property is described as follows:
x
Accounts
and Other Rights to Payment: All rights to payment, whether or not earned
by
performance, including, but not limited to, payment for property or services
sold, leased, rented, licensed, or assigned. This includes any rights and
interests (including all liens) which Debtor may have by law or agreement
against any account debtor or obligor of Debtor.
£ Inventory:
All
inventory held for ultimate sale or lease, or which has been or will be supplied
under contracts of service, or which are raw materials, work in process,
or
materials used or consumed in Debtor’s business.
£ Equipment:
All
equipment including, but not limited to, machinery, vehicles, furniture,
fixtures, manufacturing equipment, farm machinery and equipment, shop equipment,
office and record keeping equipment, parts, and tools. The Property includes
any
equipment described in a list or schedule Debtor gives to Secured Party,
but
such a list is not necessary to create a valid security interest in all of
Debtor’s equipment.
£ Instruments
and Chattel Paper:
All
instruments, including negotiable instuunents and promissory notes and any
other
writings or records that evidence the right to payment of a monetary obligation,
and tangible and electronic chattel paper.
£ General
Intangibles:
All
general intangibles including, but not limited to, tax refunds, patents and
applications for patents, copyrights, trademarks, trade secrets, goodwill,
trade
names, customer lists, permits and franchises, payment intangibles, computer
programs and all supporting information provided in connection with a
transaction relating to computer programs, and the right to use Debtor’s
name.
£ Documents:
All
documents of titre including, but not limited to, bills of lading, dock warrants
and receipts, and warehouse receipts.
£ Farm
Products and Supplies:
All farm
products including, but not limited to, all poultry and livestock and their
young, along with their produce, products, and replacements; all crops, annual
or perennial, and all products of the crops; and all feed, seed, fertilizer,
medicines, and other supplies used or produced in Debtor’s farming
operations,
£ Government
Payments and Programs:
All
payments, accounts, general intangibles, and benefits including, but not
limited
to, payments in kind, deficiency payments, letters of entitlement, warehouse
receipts, storage payments, emergency assistance and diversion payments,
production flexibility contracts, and conservation reserve payments under
any
preexisting, current, or future federal or state government
program.
£ Investment
Property:
All
investment property including, but not limited to, certificated securities,
uncertificated securities, securities entitlements, securities accounts,
commodity contracts, commodity accounts, and financial assets.
£ Deposit
Accounts: All
deposit accounts including, but not limited to, demand, time, savings, passbook,
and similar accounts.
£ Specific
Property Description:
The
Property includes, but is not limited by, the following (if required, provide
real estate description):
GENERAL
PROVISIONS.
Each
Debtor’s obligations under this Agreement are independent of the obligations of
any other Debtor, Secured ▇▇▇▇▇ may sue each Debtor individually or together
with any other Debtor. Secured Party may release any part of the Property
and
Debtor will remain obligated under this Agreement. The duties and benefits
of
this Agreement will bind the successors and assigns of Debtor and Secured
Party.
No modification of this Agreement is effective unless made in writing and
signed
by ▇▇▇▇▇▇ and Secured Party. Whenever used, the plural includes the singular
and
the singular includes the plural. Time is of the essence,
APPLICABLE
LAW.
This
Agreement is governed by the laws of the state in which Secured Party is
located. In the event of a dispute, the exclusive forum, venue, and place
of
jurisdiction will be the state in which Secured Party is located, unless
otherwise required by law. If any provision of this Agreement is unenforceable
by law, the unenforceable provision will be severed and the remaining provisions
will still be enforceable.
NAME
AND LOCATION.
▇▇▇▇▇▇’s name indicated on page 1 is ▇▇▇▇▇▇’s exact legal name. If Debtor is an
individual, ▇▇▇▇▇▇’s address is ▇▇▇▇▇▇’s principal residence. If Debtor is not
an individual, ▇▇▇▇▇▇’s address is the location of Debtor’s chief executive
offices or sole place of business. If Debtor is an entity organized and
registered under state law, Debtor has provided Debtor’s state of registration
on page 1. Debtor will provide verification of registration and location
upon
Secured Party’s request. Debtor will provide Secured Party with at least 30 days
notice prior to any change in Debtor’s name, address, or state of organization
or registration..
WARRANTIES
AND REPRESENTATIONS.
Debtor
has the right, authority, and power to enter into this Agreement. The execution
and delivery of this Agreement will not violate any agreement governing Debtor
or Debtor’s property, or to which Debtor is a party. Debtor makes the following
warranties and representations which continue as long as this Agreement is
in
effect:
| (1) |
Debtor
is duly organized and validly existing in all jurisdictions in which
Debtor does business;
|
| (2) |
the
execution and performance of the terms of this Agreement have been
duly
authorized, have received all necessary governmental approval, and
will
not violate any provision of law or
order;
|
| (3) |
other
than previously disclosed to Secured Party, Debtor has not changed
▇▇▇▇▇▇’s name or principal place of business within the last 10 years and
has not used any other trade or fictitious name;
and
|
| (4) |
Debtor
does not and will not use any other name without Secured Party’s prior
written consent.
|
Debtor
owns all of the Property, and Secured Party’s claim to the Property is ahead of
the claims of any other creditor, except as otherwise agreed and disclosed
to
Secured Party prior to any advance on the Secured Debts. The Property has
not
been used for any purpose that would violate any laws or subject the Property
to
forfeiture or seizure.
DUTIES
TOWARD PROPERTY.
Debtor
will protect the Property and Secured Party’s interest against any competing
claim. Except as otherwise agreed, ▇▇▇▇▇▇ will keep the Property in Debtor’s
possession at the address indicated on page 1 of this Agreement. Debtor will
keep the Property in good repair and use the Property only for purposes
specified on page 1. Debtor will not use the Property in violation of any
law
and will pay all taxes and assessments levied or assessed against the Property.
Secured Party has the right of reasonable access to inspect the Property,
including the right to require Debtor to assemble and make the Property
available to Secured Party. Debtor will immediately notify Secured Party
of any
loss or damage to the Property. Debtor will prepare and keep books, records,
and
accounts about the Property and ▇▇▇▇▇▇’s business, to which Debtor will allow
Secured Party reasonable access. Debtor will not sell, offer to sell, license,
lease, or otherwise transfer or encumber the Property without Secured Party’s
prior written consent. Any disposition of the Property will violate Secured
Party’s rights, unless the Property is inventory sold in the ordinary course of
business at fair market value. If the Property includes chattel paper or
instruments, either as original collateral or as proceeds of the Property,
Debtor will record Secured Party’s interest on the face of the chattel paper or
instruments. If the Property includ accounts, ▇▇▇▇▇▇ will not settle any
account
for less than the full valu d` ispose of the accounts by assignment, or make
any
material change in the terms of any account without Secured Party’s prior
written consent. Debtor will collect all accounts in the ordinary course
of
business, unless otherwise required by Secured Party. Debtor will keep the
proceeds of the accounts, and any goads returned to Debtor, in trust for
Secured
Party and will not commingle the proceeds or returned goods with any of Debtor’s
other property. Secured Party has the right to require Debtor to pay Secured
Party the full price on any returned items. Secured Party may require account
debtors to make payments under the accounts directly to Secured Party, ▇▇▇▇▇▇
will deliver the accounts to Secured Party at Secured Party’s request. Debtor
will give Secured Party all statements, reports, certificates, lists of account
debtors (showing names, addresses, and amounts owing), invoices applicable
to
each account, and any other data pertaining to the accounts as Secured Party
requests.
If
the
Property includes farm products, Debtor will provide Secured Party [text
cut
off]
INSURANCE.
▇▇▇▇▇▇
agrees to keep the Property insured against the risks reasonably associated
with
the Property until the Property is released from this Agreement. Debtor will
maintain this insurance in the amounts Secured Party requires. Debtor may
choose
the insurance company, subject to Secured Party’s approval, which will not be
unreasonably withheld. Debtor will have the insurance provider name Secured
Party as loss payee on die insurance policy. Debtor will give Secured Party
and
the insurance provider immediate notice of any loss. Secured Party may apply
the
insurance proceeds toward the Secured Debts. Secured Party may require
additional security as a condition of permitting any insurance proceeds to
be
used to repair or replace the Property. If Secured Party acquires the Property
in damaged condition, ▇▇▇▇▇▇’s rights to any insurance policies and proceeds
will pass to Scoured ▇▇▇▇▇ to the extent of the Secured Debts. Debtor will
immediately notify Secured Parry of the cancellation or termination of
insurance. If Debtor fails to keep the Property insured, or fails to provide
Secured Party with proof of insurance, Secured Party may obtain insurance
to
protect Secured Party’s interest in the Property. The insurance may include
coverages not originally required of Debtor, may be written by a company
other
than one Debtor would choose, and may be written at a higher rate than Debtor
could obtain if Debtor purchased the insurance.
AUTHORITY
TO PERFORM.
Debtor
authorizes Secured Party to do anything Secured Party deems reasonably necessary
to protect the Property and Secured Party’s interest in the Property. If ▇▇▇▇▇▇
fails to perform any of Debtor’s duties under this Agreement, Secured Party is
authorized, without notice to Debtor, to perform the duties or cause them
to be
performed. These authorizations include, but are not limited to, permission
to
pay for the repair, maintenance, and preservation of the Property and take
any
action to realize the value of the Property. Secured Party’s authority to
perform for Debtor does not create an obligation to perform, and Secured
Party’s
failure to perform will not preclude Secured Party from exercising any other
rights under the law or this Agreement. If Secured Party performs for Debtor,
Secured Party will use reasonable care. Reasonable care will not include
any
steps necessary to preserve rights against prior parties or any duty to take
action in connection with the management of the Property.
If
Secured Party comes into possession of the Property, Secured Party will preserve
and protect the Property to the extent required by law. Secured Party’s duty of
care with respect to the Property will be satisfied if Secured Party exercises
reasonable care in the safekeeping of the Property or in the selection of
a
third party in possession of the Property. Secured Party may enforce the
obligations of an account debtor or other person obligated on the Property.
Secured Party may exercise Debtor’s rights with respect to the account debtor’s
or other person’s obligations to make payment or otherwise render performance to
Debtor, and enforce any security interest that secures such obligations.
PURCHASE
MONEY SECURITY INTEREST.
If the
Property includes items purchased with the Secured Debts, the Property purchased
with the Secured Debts will remain subject to Secured Party’s security interest
until the Secured Debts are paid in full. Payments on any non-purchase money
loan also secured by this Agreement will not be applied to the purchase money
loan. Payments on the purchase money loan will be applied first to the
non-purchase money portion of the loan, if any, and then to the purchase
money
portion in the order in which the purchase money Property was acquired. If
the
purchase money Property was acquired at the same time, payments will be applied
in the order Secured Party selects. No security interest will be terminated
by
application of this formula.
DEFAULT.
Debtor
will be in default if:
| (1) |
Debtor
(or Borrower, if not the same) fails to make a payment in full when
due;
|
| (2) |
Debtor
fails to perform any condition or keep any covenant on this or any
debt or
agreement Debtor has with Secured Party;
|
| (3) |
a
default occurs under the terms of any instrument or agreement evidencing
or pertaining to the Secured Debts;
|
| (4) |
anything
else happens that either causes Secured Party to reasonably believe
that
Secured Party will have difficulty in collecting the Secured Debts
or
significantly impairs the value of the Property.
|
REMEDIES.
After
Debtor defaults, and after Secured Party gives any legally required notice
and
opportunity to cure the default, Secured Party may at Secured Party’s option do
any one or more of the following:
| (1) |
make
all or any part of the Secured Debts immediately due and accrue interest
at the highest post-maturity interest
rate;
|
| (2) |
require
Debtor to gather the Property and make it available to Secured Party
in a
reasonable fashion;
|
| (3) |
enter
upon ▇▇▇▇▇▇’s premises and take possession of all or any part of Debtor s
property for purposes of preserving the Property or its value and
use and
operate Debtor’s property to protect Secured Party’s interest, all without
payment or compensation to Debtor;
|
| (4) |
use
any remedy allowed by state or federal law, or provided in any agreement
evidencing or pertaining to the Secured
Debts.
|
If
Secured Party repossesses the Property or enforces the obligations of an
account
debtor, Secured. Party may keep or dispose of the Property as [text cut
off]
Schedule
of Additional Commercial Security Agreements
In
reliance on Instruction 2 to Regulation S-K, Item 601, MISCOR is not filing
additional Commercial Security Agreements that are identical to the one filed
herewith, except for the parties. The following ▇▇▇▇▇▇’s entered into identical
Commercial Security Agreements with MFB Financial:
1.
HK
Engine Components, LLC
2.
Magnetech Industrial Services, Inc.
3.
Magnetech Power Services, LLC
4.
▇▇▇▇▇▇▇ Electric, LLC