Mutual Services Agreement
Exhibit
10.7
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
0000
Xxxxxx Xxxxxxx Xxxx xx Xxxxxxxxx, XX (the “Facility”).
B.
AMP is a wholly-owned subsidiary of MISCOR Group, Ltd., an Indiana corporation
with its primary offices located at 0000 Xxxxx Xxxxxx Xxxxxx 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.
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a.
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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.
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b.
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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.
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c.
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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.
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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:
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LMC
Industrial Contractors, Inc.
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Dated:
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By:
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Its:
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LMC
Power:
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LMC
Power Systems, Inc.
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Dated:
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By:
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Its:
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Dansville
Properties:
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Dansville
Properties
LLC:
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Dated:
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By:
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Its:
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AMP:
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American
Motive Power,
Inc.
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Dated:
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By:
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Its:
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