Unassociated Document


    

      Exhibit
        10.5

      


      MISCOR
        Walsh Non-Compete Agreement

       

      This
Non-Compete
        Agreement(“Agreement”)
is made and
        entered into this 16th day of January, 2008 (“Effective
        Date”), by and between MISCOR Group, Ltd., an Indiana corporation (“MISCOR” or
“Company”) and Gary Walsh (“Walsh”).

       

      Recitals
        :

       

      A.           
        Since July 2005, American Motive Power, Inc. (“AMP”) has been engaged in the
        repair, remanufacturing and rebuilding of locomotive engines, as well as
        providing related goods and services to the railroad industry (as conducted
        on
        and prior to the date hereof, the “Business”), from its facility at 9431 Foster
        Wheeler Road, Dansville, New York.

       

      B.           
        Walsh has been the Vice President – Sales and Business Development of AMP since its
        inception.  Walsh has also been a shareholder of AMP since January
        2007.

       

      C.           
        Walsh is intimately familiar with the Business, including its operations,
        employees, suppliers and customers.

       

      D.           
        Pursuant to the AMP Stock Purchase Agreement (the “Stock Purchase Agreement”),
        executed January 16, 2008, MISCOR has purchased all of the outstanding stock
        of
        AMP.

       

      E.           
        MISCOR would not have been willing to enter into the Stock Purchase Agreement
        without the agreement of Walsh to execute this Agreement, along with the
        execution of a similar agreement by each of the other shareholders of
        AMP.

       

      F.           
        The consummation by MISCOR of the transactions contemplated by the Stock
        Purchase Agreement is in reliance upon the assurance of Walsh that he will
        comply fully with all of the terms and conditions of this
        Agreement.

       

      NOW,
        THEREFORE, in
        consideration of the promises and covenants herein exchanged and for other
        good
        and valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, the parties hereto agree as follows:

       

      1.           
        Consideration.  Walsh
        hereby acknowledges and
        agrees
        that his execution of this Agreement is
        a material inducement to MISCOR
        to consummate the transactions
        contemplated by the Stock
        Purchase Agreement.
Walsh
        further acknowledges and agrees that
        the consummation by MISCOR
        of the transactions contemplated by the
Stock Purchase
        Agreement, with the resulting
        significant benefits to Walsh,
        constitutes sufficient consideration
        to support the covenants set forth in this Agreement.

       

      2.           
        Term.  This
        Agreement shall commence on the Effective Date and continue for a period
        of
        three (3) years.

       

      3.           
        Covenants of Walsh.

       


      
        
          
          

        

        
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       (a)           
        Covenants Against Competition
        and Solicitation.  Walsh agrees that he will not, for the
        Prohibited Period (as defined below), without the express written consent
        of
        Company:

       

      (i)           
        Directly or indirectly, as a proprietor, officer, employee, partner,
        stockholder, consultant, agent, owner or otherwise, work for, render assistance
        or services to or otherwise participate in any business that competes with
        or
        engages in business substantially similar to the Business anywhere within
        the
        Prohibited Territory (as defined below);

      


      This
        non-compete provision shall not be enforced by the Company to prevent Walsh
        from
        engaging in the purchase or sale of railroad equipment or services not directly
        competitive with the equipment or services offered by the Company.

      


      (ii)           
        Directly or indirectly, induce, hire or solicit or seek to induce, hire or
        solicit any person who was engaged with AMP as an employee, agent, independent
        contractor or otherwise at any time within one year before the Closing Date
        to
        end his or her engagement or employment with Company, other than as a result
        of
        a general solicitation not specifically directed at the employees of the
        AMP or
        at any specific employee of AMP; or other than those employees disclosed
        on
Exhibit A to
        this Agreement.

      


      (iii)           
        Either for himself or for any other person, firm, corporation or entity,
        solicit, divert or accept, or attempt to solicit, divert or accept any persons
        or entities which were customers or suppliers of AMP at any time within one
        year
        before the Closing Date with the intention that such persons not provide
        goods
        or services to, or decrease their supply of goods and services to, AMP. AMP
        and
        LMC currently have joint suppliers and vendors in several cases

      


      For
        purposes of this Agreement, the “Prohibited Territory” means anywhere within a
        one thousand (1000) mile radius of AMP’s facility in Dansville, New York, unless
        that geographic restriction is deemed to be of unreasonably broad scope,
        and
        therefore unenforceable, by a court of competent jurisdiction, in which case
        the
        next sentence shall define the Prohibited Territory.  The Prohibited
        Territory means anywhere within a five-hundred (500) mile radius of AMP’s
        facility in Dansville, New York, unless that geographic restriction is deemed
        to
        be of unreasonably broad scope, and therefore unenforceable, by a court of
        competent jurisdiction, in which case the next sentence shall define the
        Prohibited Territory.  The Prohibited Territory means anywhere within
        a two-hundred-fifty (250) mile radius of AMP’s facility in Dansville, New
        York.

      


      The
        term
“Prohibited Period” shall be defined as a period of three (3) years from and
        after the Closing Date as defined in the Stock Purchase Agreement.

      


      (b)           
        Reasonableness of
        Covenants.  Walsh acknowledges and agrees that the temporal,
        geographic and other limitations contained in this Section 3 are reasonable
        and

       


      
        
          
          

        

        
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      necessary
        for the proper protection of MISCOR’s investment in AMP and shall be enforceable to
        the fullest
        extent permitted by law.

       

      (c)           
        Modification. In the event that any term, provision or covenant contained
        in
        this Section 3 is found to be unreasonable, and therefore unenforceable,
        by a
        court of competent jurisdiction, but would be valid and enforceable if any
        part
        thereof were deleted or otherwise modified, then the parties expressly agree
        that a court may limit the application of, or modify any such term, provision
        or
        covenant and proceed to enforce such term, provision or covenant as so limited
        or modified.

       

      


      4.           
        Remedies for
        Breach.  Walsh acknowledges that Company’s remedy at law for
        any breach of Walsh’ obligations under Section 3 would be inadequate and
        specifically agrees that Company shall be entitled to injunctive relief against
        him, without the necessity of proof of actual damage or the posting of a
        bond,
        in addition to any other remedies available at law or in equity, including
        compensatory damages incurred by Company as a result of such violation and
        including costs, expenses and reasonable attorneys’ fees in enforcing any of its
        rights under Section 3.  The rights and remedies set forth in this
        Agreement shall be cumulative and not exclusive.

       

      5.           
        Miscellaneous.

       

      (a)           
        Notices.   Any
        notice
        required or permitted to be given under this Agreement shall be in writing
        and
        shall be deemed to have been duly given on the date delivered, if delivered
        in
        person, or on the date mailed, if mailed first-class, postage prepaid, certified
        mail, return receipt requested, at the address set forth below (or such other
        address as may be given by like notice):

       

      
        	 	
                If
                  to Company:

              	 
	 	 	
                MISCOR
                  Industrial Services, Inc.

              
	 	 	
                1125
                  South Walnut Street

              
	 	 	
                South
                  Bend, Indiana  46619

              
	 	 	
                Attn:  John
                  A. Martell

              
	 	 	
                And    James
                  M. Lewis

              
	 	 	 
	 	 	
                with
                  a copy to:

              
	 	 	 
	 	 	
                Cahill/Wink
                  LLP

              
	 	 	
                60
                  Railroad Place, Suite 202

              
	 	 	
                Saratoga
                  Springs, New York 12866

              
	 	 	
                Attn:  Stephen
                  P. Wink, Esq.

              
	 	 	
                           
                  Louis Gambino, Esq.

              
	 	 	 
	 	 	
                and
                  a copy to:

              
	 	 	 
	 	 	
                Barnes
                  & Thornburg LLP

              
	 	 	
                600
                  1st Source Bank Center

              
	 	 	
                100
                  North Michigan

              
	 	 	
                South
                  Bend, Indiana 46601

              


      

      



      
        
          
          

        

        
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                Attn:  Richard
                  L. Mintz, Esq.

              
	 	 	 
	 	
                If
                  to Walsh:

              	
                Gary
                  Walsh

              
	 	 	
                1121
                  East Middle Road

              
	 	 	
                Erie,
PA 16428

              
	 	 	 
	 	 	
                with
                  a copy to:

              
	 	 	 
	 	 	
                Boylan,
                  Brown, Code, Vigdor & Wilson, LLP

              
	 	 	
                2400
                  Chase Square

              
	 	 	
                Rochester,
                  NY  14604

              
	 	 	
                Attn:
                  Robert F. Mechur, Esq.

              


      

      


      (b)           
        Assignment; Binding
        Effect. No party to this Agreement may assign this Agreement or such
        party’s right, duties and obligations hereunder without the prior written
        consent of the other party hereto; provided, that Company
        shall
        have the right to assign its rights hereunder to an Affiliate of
        Company.  Subject to the foregoing, this Agreement shall be binding
        upon and inure to the benefit of the parties to this Agreement and their
        heirs,
        personal and legal representatives, successors and assigns.  For
        purposes of this Agreement, “Affiliate” means a person or entity that directly
        or indirectly, through one or more intermediaries, controls, is controlled
        by,
        or is under common control with, another person or entity or which any person
        or
        entity owns or controls directly or indirectly 50% or more of the voting
        shares
        or of the value of such person or entity or has the ability to control the
        management or affairs of such person or entity.

       

      (c)           
        Severability.  If
        any provision of this Agreement shall be held invalid or unenforceable by
        any
        court of competent jurisdiction or as a result of legislative or administrative
        action, such holding or action shall be strictly construed and shall not
        affect
        the validity or affect any other provision of this Agreement.

       

      (d)Governing
        Law; Venue.  This
        Agreement shall be construed,
        interpreted and enforced in accordance with the laws of the State of
New York,
        without giving effect to principles of
        conflicts of laws.  The parties expressly agree that the Indiana state
        courts located in St. Joseph County, Indiana (or if there is exclusive federal
        jurisdiction, the United States District Court for the Northern District
        of
        Indiana) shall have exclusive jurisdiction and venue over any dispute arising
        out of this Agreement.  To the extent not otherwise subject to the
        jurisdiction of such courts, the Purchaser and each Shareholder hereby agrees
        to
        waive any objection to jurisdiction and to subject itself to the jurisdiction
        of
        such courts.  The parties also hereby agree to accept service of
        process by Federal Express or similar overnight courier to the applicable
        notice
        address set forth in Section 5(a).

      


      (e)           
        Waiver. The
        failure of any party to enforce at
        any time or for any period of time any of the provisions of this Agreement
        shall
        not be construed as a waiver of such provision or of the right of the party
        to
        enforce such provision.  The waiver of any breach or default or the
        failure to exercise any right shall not be deemed a waiver of any subsequent
        breach or default or waiver of the right to exercise any other
        right.

       


      
        
          
          

        

        
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      (f)           
        Entire Agreement and
        Amendment. This Agreement sets forth the entire understanding of the
        parties, there being no oral or other written agreements or
        understandingsbetween
        them relating to the subject matter hereof, and supersedes and replaces all
        other prior agreements, understandings or letters of intent between the parties
        with regard to the subject matter of this Agreement.  No modification,
        amendment, waiver or release of any provision of this Agreement or of any
        right,
        obligation, claim or cause of action arising under this Agreement shall be
        valid
        or binding for any purpose unless in writing and duly executed by the party
        against whom the same is sought to be asserted.

       

      IN
        WITNESS WHEREOF, Company has caused this Non-Compete Agreement to be executed
        on
        its behalf by its authorized officer and Walsh has executed this Non-Compete
        Agreement on the date or dates indicated below, effective as of the Effective
        Date.

       

      
        	
                Gary
                  Walsh 

              	 	
                MISCOR
                  Group, Ltd.

              
	 	 	 	 	 
	 	 	 	 	 
	
                Gary
                  Walsh

              	 	
                John
                  A. Martell, President and CEO

              
	 	 	 	 	 
	
                Date:

              	 	 	
                Date:

              	 


      


      
        
          
          

        

        
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      EXHIBIT
        A

      


      Employees
        Intending to
        Transfer from AMP to an LMC Company

      


      Timothy
        Rawleigh-Maintenance

      


      Robert
        Clancy-Maintenance

      


      David
        Gates-Maintenance

      


      Andrew
        Bembower-Maintenance

      


      Jack
        Townsend-Maintenance

      


      Steven
        Burley-Shot
        Blast

      


      Scott
        Evans-Shot
        Blast

      


      Amy
        Adriance-Accounting
        Department

      


      Brittney
Rizzieri
-Accounting
        Department

      


      
 

       

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