COLLATERAL PLEDGE AGREEMENT Date: January 14, 2008
Exhibit
10.5
Date:
January 14, 2008
| DEBTOR: | MISCOR GROUP, LTD. |
| 0000 X. Xxxxxx Xxxxxx |
| Xxxxx Xxxx, Xxxxxxx 00000 |
| Telecopier No. 574/232-7648 |
|
SECURED
PARTY:
|
Xxxxx
Fargo Bank, National Association, acting through its Xxxxx Fargo
Business
Credit operating division
|
| 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx |
| MAC X0000-00X |
| Xxxx Xxxxx, Xxxxxxx 00000 |
| Telecopier: 260/461-6037 |
1. Security
Interest and Collateral. To secure the payment and performance of the
Indebtedness which MISCOR GROUP, LTD., an Indiana corporation (“MISCOR”),
MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”), XXXXXXX
ELECTRIC, LLC, an Indiana limited liability company (“Xxxxxxx”), 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, Xxxxxxx, XX, MPS, Ideal and
3D, the “Borrowers” and each a “Borrower”) may now or at any time hereafter owe
to the Secured Party, the Debtor hereby grants the Secured Party a security
interest (herein called the “Security Interest”) in all property of any kind now
or at any time hereafter owned by the Debtor, or in which the Debtor may now
or
hereafter have an interest, which may now be or may at any time hereafter
(i) come into the possession or control of the Secured Party or into the
possession or control of the Secured Party’s agents or correspondents, whether
such possession or control is given for collateral purposes or for safekeeping;
or (ii) be transferred or assigned to the Secured Party by any means
permitted under Article 8 of the Uniform Commercial Code including, but not
limited to, all of the stock and membership interests held by the Debtor in
each
of the other Borrowers, together with all rights in connection with such
property (the “Collateral”). "Indebtedness" is used herein in its
most comprehensive sense and means any and all advances, debts, obligations
and
liabilities of the Borrowers to the Secured
Party, heretofore, now or hereafter made, incurred or created, whether voluntary
or involuntary and however arising, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, including
under any swap, derivative, foreign exchange, hedge, deposit, treasury
management or other similar transaction or arrangement at any time entered
into
by the Borrowers, or any of them, with
the Secured Party, and whether the Borrowers may be liable individually or
jointly with others, or whether recovery upon such Indebtedness may be or
hereafter becomes unenforceable.
2. Representations,
Warranties and Covenants. The Debtor represents, warrants and covenants
that:
(a) The
Debtor will duly endorse, in blank, each and every instrument constituting
Collateral by signing on said instrument or by signing a separate document
of
assignment or transfer, if required by the Secured Party.
(b) The
Debtor is the owner of the Collateral free and clear of all liens, encumbrances,
security interests and restrictions, except the Security Interest and any
restrictive legend appearing on any instrument constituting
Collateral.
(c) The
Debtor will keep the Collateral free and clear of all liens, encumbrances
and
security interests, except the Security Interest and any restrictive legend
appearing on any instrument constituting Collateral.
(d) The
Debtor will pay, when due, all taxes and other governmental charges levied
or
assessed upon or against any Collateral.
(e) At
any time, upon request by the Secured Party, the Debtor will deliver to the
Secured Party all notices, financial statements, reports or other communications
received by the Debtor as an owner or holder of the Collateral.
(f) The
Debtor will upon receipt deliver to the Secured Party in pledge as additional
Collateral all securities distributed on account of the Collateral such as
stock
dividends and securities resulting from stock splits, reorganizations and
recapitalizations.
3. Rights
of the Secured Party. The Debtor agrees that the Secured Party may at any
time, whether before or after the occurrence of an Event of Default (as
hereinafter defined) and without notice or demand of any kind, (i) notify
the obligor on or issuer of any Collateral to make payment to the Secured
Party
of any amounts due or distributable thereon; (ii) in the Debtor’s name or
the Secured Party’s name enforce collection of any Collateral by suit or
otherwise, or surrender, release or exchange all or any part of it, or
compromise, extend or renew for any period any obligation evidenced by the
Collateral; (iii) receive all proceeds of the Collateral; and
(iv) hold any increase or profits received from the Collateral as
additional security for the Indebtedness, except that any money received
from
the Collateral shall, at the Secured Party’s option, be applied in reduction of
the Indebtedness, in such order of application as the Secured Party may
determine, or be remitted to the Debtor.
4. Events
of Default. Each of the following occurrences shall constitute an event of
default under this Agreement (herein called “Event of Default”): (i) the
Borrowers shall fail to pay any or all of the Indebtedness when due, or the
Debtor shall fail to observe or perform any covenant or agreement herein
binding
on it; (ii) any representation or warranty by the Debtor set forth in this
Agreement or made to the Secured Party in any financial statements or reports
submitted to the Secured Party by or on behalf of the Debtor shall prove
materially false or misleading; (iii) an Event of Default, as defined in
any
credit agreement or
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other
instrument or agreement evidencing or governing any or all of the Indebtedness,
shall occur.
5. Remedies
upon Event of Default. Upon the occurrence of an Event of Default and at any
time thereafter, the Secured Party may exercise any one or more of the following
rights or remedies: (i) declare all unmatured Indebtedness to be immediately
due
and payable, and the same shall thereupon be immediately due and payable,
without presentment or other notice or demand; (ii) exercise all voting and
other rights as a holder of the Collateral; (iii) exercise and enforce any
or
all rights and remedies available upon default to a secured party under the
Uniform Commercial Code as in effect from time to time in the state of
Wisconsin, including the right to offer and sell the Collateral privately
to
purchasers who will agree to take the Collateral for investment and not with
a
view to distribution and who will agree to the imposition of restrictive
legends
on the certificates representing the Collateral, and the right to arrange
for a
sale which would otherwise qualify as exempt from registration under the
Securities Act of 1933; and if notice to the Debtor of any intended disposition
of the Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable
if
given at least 10 calendar days prior to the date of intended disposition
or
other action; (iv) exercise or enforce any or all other rights or remedies
available to the Secured Party by law or agreement against the Collateral,
against the Debtor or against any other person or property.
6. Miscellaneous.
Any disposition of the Collateral in the manner provided in Section 5 shall
be
deemed commercially reasonable. This Agreement can be waived, modified, amended,
terminated or discharged, and the Security Interest can be released, only
explicitly in a writing signed by the Secured Party. A waiver signed by the
Secured Party shall be effective only in the specific instance and for the
specific purpose given. Mere delay or failure to act shall not preclude the
exercise or enforcement of any of the Secured Party’s rights or remedies. All
rights and remedies of the Secured Party shall be cumulative and may be
exercised singularly or concurrently, at the Secured Party’s option, and the
exercise or enforcement of any one such right or remedy shall neither be
a
condition to nor bar the exercise or enforcement of any other. All notices
to be
given to the Debtor shall be deemed sufficiently given if delivered or mailed
by
registered or certified mail, postage prepaid, or by telecopier to the Debtor
at
its address or telecopier number, as the case may be, set forth above or
at the
most recent address or telecopier number shown on the Secured Party’s records.
All requests under Section 9-210 of the Uniform Commercial Code (i) shall
be made in a writing signed by a person duly authorized by Debtor,
(ii) shall be personally delivered, sent by registered or certified mail,
return receipt requested, or by overnight courier of national reputation,
(iii) shall be deemed to be sent when received by the Secured Party, and
(iv) shall otherwise comply with the requirements of Section 9-210. The Debtor
requests that the Secured Party respond to all such requests which on their
face
appear to come from an authorized individual and releases the Secured Party
from
any liability for so responding. The Debtor shall pay Secured Party the maximum
amount allowed by law for responding to such requests. The Secured Party’s duty
of care with respect to Collateral in its possession (as imposed by law)
shall
be deemed fulfilled if the Secured Party exercises reasonable care in physically
safekeeping such Collateral or, in the
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case
of
Collateral in the custody or possession of a bailee or other third person,
exercises reasonable care in the selection of the bailee or other third person,
and the Secured Party need not otherwise preserve, protect, insure or care
for
any Collateral. The Secured Party shall not be obligated to preserve any
rights
the Debtor may have against prior parties, to exercise at all or in any
particular manner any voting rights which may be available with respect to
any
Collateral, to realize on the Collateral at all or in any particular manner
or
order, or to apply any cash proceeds of Collateral in any particular order
of
application. The Debtor will reimburse the Secured Party for all expenses
(including reasonable attorneys’ fees and legal expenses) incurred by the
Secured Party in the protection, defense or enforcement of the Security
Interest, including expenses incurred in any litigation or bankruptcy or
insolvency proceedings. This Agreement shall be binding upon and inure to
the
benefit of the Debtor and the Secured Party and their respective heirs,
representatives, successors and assigns and shall take effect when signed
by the
Debtor and delivered to the Secured Party, and the Debtor waives notice of
the
Secured Party’s acceptance hereof. If any provision or application of this
Agreement is held unlawful or unenforceable in any respect, such illegality
or
unenforceability shall not affect other provisions or applications which
can be
given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Indebtedness. If this Agreement
is
signed by more than one person as the Debtor, the term “Debtor” shall refer to
each of them separately and to both or all of them jointly; all such persons
shall be bound both severally and jointly with the other(s); and the
Indebtedness shall include all debts, liabilities and obligations owed to
the
Secured Party by any Debtor solely or by both or several or all Debtors jointly
or jointly and severally, and all property described in Section 1 shall be
included as part Collateral, whether it is owned jointly by both or all Debtors
or is owned in whole or in part by one (or more) of them. This
Agreement shall be governed by the internal laws (other than conflict laws)
of
the state of Wisconsin and, unless the context otherwise requires, all terms
used herein which are defined in Articles 1 and 9 of the Uniform Commercial
Code, as in effect in Wisconsin, shall have the meanings therein stated.
Each
party consents to the personal jurisdiction of the state and federal courts
located in the State of Wisconsin in connection with any controversy related
to
this Agreement, waives any argument that venue in any such forum is not
convenient, and agrees that any litigation initiated by any of them in
connection with this Agreement may be venued in either the state and federal
courts located in Milwaukee County, Wisconsin. THE PARTIES WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING
TO
THIS AGREEMENT.
|
By
|
/s/ Xxxx X. Xxxxxxx | ||
|
Xxxx
X. Xxxxxxx, President
|
|||
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