Unassociated Document


    Exhibit
      10.7

    


    Mutual
      Services Agreement

    


    This
      Mutual Services Agreement (the
“Agreement”) is made and entered into this 16th
      day of
      January, 2008, by and among American Motive Power, Inc., a Nevada Corporation
      (“AMP”), LMC Power Systems, Inc. (“LMC Power”), and LMC Industrial Contractors,
      Inc. (“LMC Industrial”) and, Dansville Properties, LLC (Dansville
      Properties).  LMC Power and LMC Industrial and Dansville Properties
      are referred to herein collectively as the “LMC Companies,” and AMP, AMP’s
      Affiliates, LMC Power and LMC Industrial, and Dansville Properties, are referred
      to herein each as a “Party” and collectively as the “Parties.”

    


    Recitals:

     

        A.    
      AMP is engaged in the repair, remanufacturing and rebuilding of locomotives
      and
      locomotive engines, as well as providing related goods and services to the
      railroad industry, from leased space at the industrial facility located at
      9431
      Foster Wheeler Road in Dansville, NY (the “Facility”).

     

     

        B.    
      AMP is a wholly-owned subsidiary of MISCOR Group, Ltd., an Indiana corporation
      with its primary offices located at 1125 South Walnut Street in South Bend,
      Indiana (“MISCOR”).

     

     

        C.     MISCOR
      has other wholly-owned subsidiary companies engaged in the locomotive or
      railroad engine and equipment business including but not limited to Magnetech
      Industrial Services, Inc., HK Engine Components, LLC, as well as planned
      additional subsidiaries (AMP’s “Affiliates”),

     

     

        D.    
      LMC Power is a manufacturing-based business involved in various types of
      specialty manufacturing and heavy fabrication processes for all industries,
      from
      leased space at the Facility.

     

     

        E.    
      LMC Industrial is engaged in the mechanical industrial contracting business,
      including but not limited to welding, pipe fitting, gas coupling, steel
      fabrication, frame fabrication, rigging, installation and related industrial
      services, from leased space at the Facility.

     

     

        F.    
      Dansville Properties owns the Facility and is engaged in the general maintenance
      of the facility and grounds and manages all aspects of facility
      operations.

     

     

        G.    
      From time to time, requirements of projects for AMP or its Affiliates may
      dictate that fabrication, shot blasting services, or other manufacturing
      services generally outside of AMP’s capabilities will be required, which
      services fall within the capabilities of the LMC Companies.  Likewise,
      from time to time, requirements of projects for the LMC Companies may dictate
      that repair, maintenance, remanufacture, painting or some other service
      generally outside the LMC Companies’ capabilities will be required, which
      services fall within the capabilities of AMP or its Affiliates.  The
      Parties intend through this Agreement to set forth the standard terms and
      conditions upon which such services

     


    
      
        
        

      

      
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    shall
      be
      provided.

     

    Now
      therefore, in consideration of the
      promises hereinafter made, and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the recital provisions
      above are incorporated into the body of this Agreement as if fully set forth
      therein, and the parties agree as follows:

    


    1.           
      Term;
      Cancellation.   The term of this Agreement shall be for a
      period of three (3) years, commencing on January 16th, 2008 (the “Commencement
      Date”) and expiring on January 15th, 2011 (the “Expiration Date”) (the “Initial
      Term”).  The term of this Agreement shall be extended automatically
      for successive one year periods, unless and until at least three (3) months
      written notice is given by either party requesting termination or renegotiation
      of this Agreement prior to the end of the Initial Term or any anniversary date
      thereafter. Final term shall expire upon the exhaustion of initial lease period
      and should tenant remain for option periods during lease renewals, should
      continue through that time.

     

    2.           
      Work Orders. If
      at any time during the term of this Agreement, one of the Parties asks another
      of the Parties to supply or perform services, such request will be reduced
      to
      writing and each such request shall be deemed a “Work Order” governed by and
      subject to the terms and conditions of this Agreement. Agreements or
      stipulations in any Work Order that are contrary to any term of this Agreement
      shall be void, unless the Parties have expressly agreed in writing that such
      agreement or stipulation shall supersede the terms of this
      Agreement.

     

    3.           
      Time and
      Materials.  Unless otherwise agreed to in writing by the
      Parties, all services rendered under this Agreement will be provided on a
      time-and-materials basis, with materials being provided at 105% of actual cost
      to the supplying party, and labor charged at the standard rate of Sixty-Five
      Dollars ($65.00) per hour.  This rate will not change during the
      initial term, nor any extension period, of this Agreement except by mutual
      agreement and the standard rate will be mutual between the
      companies

     

    4.           
      Scheduling.  The
      Work Order shall include the deadline by which the project must be completed,
      which deadline will be discussed and agreed to in writing prior to beginning
      the
      project.  The Parties will make a good faith effort to provide
      priority scheduling to one another.

     

    5.           
      Quality of Work;
      Warranty.  All services rendered by a Party hereunder shall be
      performed in accordance with industry standards. All materials and equipment
      furnished in the performance of services hereunder shall be free from material
      defects. Any of the materials, equipment, or services found to be materially
      defective shall be either removed, replaced or corrected by the supplying Party
      without additional cost to the receiving Party.

     

    6.           
      Third-Party Claims
      Indemnification.  With respect to Work Orders which include
      work to be performed for customers of the requesting parties, it is
      foreseeable

     


    
      
        
        

      

      
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    that
      such
      work may one day be the subject of a third-party warranty or product liability
      claim.  With respect such third-party claims, the parties agree as
      follows.

     

    
      	
               

            	
              a.

            	
              AMP
                and its Affiliates agree to indemnify, defend and hold harmless the
                LMC
                Companies and their shareholders, directors, officers, employees
                and
                agents from and against any and all damages, claims, liabilities,
                litigation, costs and expenses (including, but not limited to, reasonable
                attorneys’ fees and expenses) incurred or expended by any of them as a
                result of, relating to or arising from: (i) any defects in any Products
                caused by any defect in design, material or workmanship of a Product,
                except to the extent caused by defective engineering or designs provided
                by the LMC Companies; (ii) the direct infringement by AMP or its
                Affiliates of any intellectual property rights of a third party,
                including
                patent, trademark, copyright and trade secrets, with regard to the
                design
                or manufacture of a Product, except to the extent caused by a design
                or
                instruction furnished or given by LMC Companies; and/or (iii) any
                negligent actions or omissions of AMP or its Affiliates relating
                to this
                Agreement. 

            


    

     

    
      	
               

            	
              b.

            	
              The
                LMC Companies, jointly and severally, agree to indemnify, defend
                and hold
                harmless AMP and its Affiliates, shareholders, directors, officers,
                employees and agents from and against any and all damages, claims,
                liabilities, litigation, costs and expenses (including, but not limited
                to, reasonable attorneys’ fees and expenses) incurred or expended by any
                of them as a result of, relating to or arising from: (i) any defects
                in
                any Products caused by any defect in design, material or workmanship
                of a
                Product, except to the extent caused by defective engineering or
                designs
                provided by AMP or its Affiliates; (ii) the direct infringement by
                the LMC
                Companies of any intellectual property rights of a third party, including
                patent, trademark, copyright and trade secrets, with regard to the
                design
                or manufacture of a Product, except to the extent caused by a design
                or
                instruction furnished or given by AMP or its Affiliates; and/or (iii)
                any
                negligent actions or omissions of the LMC Companies relating to this
                Agreement. 

            


    

     

    
      	
               

            	
              c.

            	
              In
                the event that either party becomes aware of a matter for which it
                is
                entitled to indemnification hereunder, such party shall notify the
                indemnifying party of such matter as soon as is reasonably practicable
                by
                written notice, specifying the nature of the matter for which
                indemnification is claimed. The indemnifying party shall have the
                right to
                assume control of the defense of any suit or claim by any third party
                against the indemnified party. The indemnified party may also participate
                in its own defense, provided that it will be responsible for any
                duplicate
                additional expenses incurred with respect to participating in such
                defense. 

            


    

     

    7.           
      Invoicing;
      Payment. Upon completion of a Work Order, the performing party shall
      deliver to the requesting party an invoice.  The party receiving the
      invoice

     


    
      
        
        

      

      
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    shall
      have 30 days from the date of the invoice to pay the amount due thereon, or
      to
      notify the party sending the invoice in writing of a bona fide dispute asserted
      in
      good faith as to one or more of the invoice items.

     

    8.           
      $100,000 Credit
      to
      AMP . The LMC Companies will provide AMP with a One Hundred Thousand
      Dollar ($100,000.00) credit toward Work Orders to be performed by the LMC
      Companies for AMP under the terms of this Agreement. AMP must use or lose this
      credit on or before December 31, 2010.

     

     

    9.           
      Confidentiality. Each
      Party hereby covenants and agrees with the others that, except as may be
      required by law, rule or regulation, or required in order to fulfill such
      Party's obligations under this Agreement, such Party shall not at any time
      reveal, divulge, disclose or make known to any person (other than the Parties
      and their respective affiliates or the respective accountants or legal counsel)
      any confidential or proprietary information concerning the other that was
      obtained in connection with performance of this Agreement. The obligations
      of
      confidentiality under this Section shall not apply with respect to any portions
      of such information that: (i) become public knowledge without breach of this
      Agreement or any other agreements concerning confidentiality; (ii) are generally
      disclosed by a third party who is not bound by any agreement of confidentiality;
      or (iii) must be disclosed pursuant to applicable law or order, in which case
      the disclosing Party shall promptly notify the affected Party of any such
      requirement and shall permit such other Party to seek confidential treatment
      for
      such information.

     

     

    10.           
      Independent
      Contractors. The Parties will operate as, and have the status of,
      independent contractors and will not act as or be an agent, partner, co-venturer
      or employee of the other Party.  No Party will have any right or
      authority to assume or create any obligations or to make any representations
      or
      warranties on behalf of any other Party, whether express or implied, or to
      bind
      the other Party in any respect whatsoever. Each shall submit sub-contractor
      Insurance information which evidence of Worker’s Compensation
      included.

     

     

    11.           
      Entire Agreement;
      Waivers and Amendments.  This Agreement sets forth the entire
      understanding among the Parties relating to the subject matter hereof. Except
      as
      provided herein, this Agreement shall not be modified or amended, and no
      provision hereof shall be waived, except by an instrument in writing signed
      by
      each of the Parties hereto, or in the case of a waiver, by the Party hereto
      against whom such waiver is sought to be enforced.

     

     

    12.           
      Successors and
      Assigns. The provisions of this Agreement shall be binding upon and inure
      to the benefit of the Parties and their respective successors and permitted
      assigns; provided, however, that, no Party may assign, delegate or otherwise
      transfer any of its rights or obligations under this Agreement without the
      prior
      written consent of the other Party.

     

     

    13.           
      Severability.
      If any term or other provision of this Agreement is invalid, illegal or
      incapable of being enforced by any rule of law or public policy, all other
      terms
      and provisions of this Agreement will nevertheless remain in full force and
      effect so long

     


    
      
        
        

      

      
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    as
      the
      economic or legal substance of the transactions contemplated hereby is not
      affected in any manner materially adverse to any Party hereto. Upon any such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the Parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the Parties as closely
      as
      possible in an acceptable manner, to the end that the transactions contemplated
      by this Agreement are consummated to the extent possible.

     

     

    14.           
      No Third Party
      Beneficiaries. Nothing in this Agreement shall confer any rights upon any
      person which is not a Party or a successor or permitted assignee of a Party
      to
      this Agreement.

     

     

    15.           
      Force
      Majeure.  Neither party shall be liable for any failure to
      perform its obligations hereunder if (and during such time as) such failure
      is
      due to causes beyond the reasonable control of the affected party, including,
      but not limited to, acts of God, fires, floods, accidents, strikes or other
      labor disputes, wars, transportation delays, plant shutdowns, government actions
      or inability to obtain material, equipment or
      transportation.  However, if either party is unable to perform because
      of causes beyond its reasonable control it shall provide notice to the other
      party of such inability as promptly as is feasible under the
      circumstances.

     

     

    16.           
      Governing Law.
      This Agreement shall be governed in all respects by the laws of the State of
      New
      York, without regard to the conflict of laws principles thereof.

     

     

    17.           
      Headings. The
      headings contained in this Agreement are for reference purposes only and shall
      not in any way affect the meaning or interpretation of this
      Agreement.

     

    18.
                  Counterparts. This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same instrument.

     

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    IN
      WITNESS WHEREOF, the
      parties hereto have executed this Agreement on the date or dates indicated
      below, effective as of the date first above written.

    


    
      	 	 	 	
              LMC
                Industrial:

            
	 	 	 	 	 
	 	 	 	
              LMC
                Industrial Contractors, Inc.

            
	 	 	 	 	 
	 	 	 	 	 
	
              Dated:

            	 	 	
              By:

            	 
	 	 	 	
              Its:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              LMC
                Power:

            
	 	 	 	 	 
	 	 	 	
              LMC
                Power Systems, Inc.

            
	 	 	 	 	 
	 	 	 	 	 
	
              Dated:

            	 	 	
              By:

            	 
	 	 	 	
              Its:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              Dansville
                Properties:

            
	 	 	 	 	 
	 	 	 	
              Dansville
                Properties
                LLC:

            
	 	 	 	 	 
	 	 	 	 	 
	
              Dated:

            	 	 	
              By:

            	 
	 	 	 	
              Its:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              AMP:

            
	 	 	 	 	 
	 	 	 	
              American
                Motive Power,
                Inc.

            
	 	 	 	 	 
	 	 	 	 	 
	
              Dated:

            	 	 	
              By:

            	 
	 	 	 	
              Its:

            	 


    

    


    
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