AMENDMENT TO CONVERSION OPTION
Exhibit
4.1
AMENDMENT
TO CONVERSION OPTION
This
Amendment to Conversion Option
(“Amendment”) is made as of November 28, 2007 (the
“Effective Date”) by MISCOR Group, Ltd. f/k/a Magnetech
Integrated Services Corp., an Indiana corporation (“Parent”),
Magnetech Industrial Services, Inc., an Indiana corporation and wholly owned
subsidiary of Parent (“Company”), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (“Lender”).
Recitals:
A. The
Parent and Company previously
executed a Conversion Option in favor of Lender dated effective September
12,
2005 (the “Option”).
B. Pursuant
to the Option, Parent agreed to
reserve from its authorized and unissued Common Stock a sufficient number
of
shares to provide for the issuance of such Common Stock upon the full exercise
of the Option by Lender (the “Reserved
Shares”).
C. Parent
desires
to enter into that
certain Securities Purchase Agreement (the “Tontine Purchase
Agreement”) with Tontine Capital Partners, L.P., a Delaware limited
partnership and Tontine Capital Overseas Master Fund L.P., a Cayman Islands
limited partnership (collectively, the “Buyers”), pursuant to
which the Buyers shall purchase from Parent, and Parent shall issue to Buyers,
a
total of 83,333,333 shares of Parent’s Common Stock, for a total investment of
approximately $20,000,000, which investment shall be used by Parent to make
certain acquisitions and for certain business purposes, as Parent
determines.
D. Parent
also desires to enter into that certain Membership Interest Purchase Agreement
(the “3-D Purchase Agreement”) with 3-D Service, Ltd., an Ohio
limited liability company (“3-D”), pursuant to which Parent
shall purchase from the members of 3-D all of the issued and outstanding
membership interests of 3-D in exchange for certain consideration from Parent,
including the issuance of a certain number of Shares of Parent’s Common Stock to
3-D’s members.
E. Without
the Reserved Shares, Parent currently has an insufficient number of shares
of
authorized and unissued
Common Stock to consummate
the transactions contemplated by the Tontine
Purchase Agreement and the 3-D Purchase Agreement (the “Pending
Transactions”).
F. Closing
the Pending Transaction benefits both the Parent and Lender, in that the
parties
both believe the Pending Transactions to be in the best interests of the
Parent.
G. The
Parent intends to effect a 1-for-25 reverse stock split of its Common Stock
shortly after the date of this Agreement, resulting in a reduction in the
Company’s authorized Common Stock from 300,000,000 shares to 12,000,000 shares,
with any fractional shares resulting from the reverse stock split being redeemed
by the Parent. Thereafter and not later than one hundred twenty (120)
days after the date of this Agreement, the Parent intends to call a meeting
of
the Parent’s shareholders at which the Parent shall propose to amend its Amended
and Restated Articles of Incorporation to increase the number of authorized
shares of Common
Stock
thereunder to twenty million (20,000,000) shares (the “Articles of
Amendment”), which will permit the Parent to issue additional shares of
Common Stock for general corporate purposes (including issuance in connection
with the closing of the pending Transactions).
H. The
parties now desire to amend the
Option on the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in
consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby amend the Option in the following
manner:
1. Incorporation
of Recitals. The foregoing recitals to this Amendment are
hereby incorporated in and made a part of this Amendment to the same extent
as
if set forth in full herein.
2. Definitions. Unless
otherwise defined in this Amendment, all capitalized terms shall have the
meanings assigned to such terms in the Option.
3. Release
of Reserved Shares. Effective as of the Effective
Date, the parties hereby authorize the release of the Reserved
Shares. Lender hereby acknowledges and agrees that Lender shall not
be entitled to exercise the Option until such time as the Articles of Amendment
are formally adopted and approved by Parent and its shareholders and
directors. Once the Articles of Amendment are adopted and
approved, Parent agrees to again reserve from its authorized and unissued
Common
Stock a sufficient number of shares to provide for the issuance of Common
Stock
upon the full exercise of this Option.
4. Option
Terms. Except as set forth in this Amendment, all terms and
provisions contained in the Option remain in full force and effect.
IN
WITNESS WHEREOF, the parties have
executed this Amendment to Conversion Option on the date(s) indicated below,
effective as of the Effective Date.
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MISCOR
Group, Ltd. f/k/a
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Magnetech
Integrated Services Corp.
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Date:
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November 28, 2007 |
By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, CFO and Treasurer
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Magnetech
Industrial Services, Inc.,
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Date:
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November 28, 2007 |
By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, CFO and Treasurer
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Date:
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November 28, 2007 |
/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇
▇. ▇▇▇▇▇▇▇
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