Exhibit 10.11
Magnetech DeWees Non-Compete Agreement
This Non-Compete Agreement
(“Agreement”)
is made and entered into this 30th day of November, 2007
(“Effective Date”), by and between Magnetech Industrial
Services, Inc., an Indiana corporation (“Magnetech” or
“Company”) and Bernard L. DeWees
(“DeWees”).
Recitals :
A. Since
March 1, 2002, 3-D Service, Ltd. (“3-D”) has been
engaged in the business of selling, repairing, remanufacturing
and maintaining industrial electrical and mechanical equipment
from its locations at 800 Nave Road SE in Massillon, Ohio, and
at 870 Crescentville Road in Cincinnati, Ohio (“the
Business”).
B. DeWees
has been the President of 3-D si nce its
inception. Through BDeWees, Inc., an Ohio
corporation which he wholly owns, DeWees has also owned fifty
percent (50%) of 3-D since its inception.
C. DeWees
is intimately familiar with the Business, including its
operations, employees, suppliers and customers.
D. Pursuant
to the 3-D Membership Interest Purchase Agreement (the
“Membership Interest Purchase Agreement”),
executed November 30, 2007, Magnetech has purchased
substantially all of the Membership Interests of
3-D.
E. Magnetech
would not have been willing to enter into the Membership
Interest Purchase Agreement without the agreement of DeWees to
execute this Agreement, along with the execution of a similar
agreement by Thomas J. Embrescia
(“Embrescia”).
F. The
consummation by Magnetech of the transactions contemplated by
the Membership Interest Purchase Agreement is in reliance upon
the assurance of DeWees that he will comply fully with all of
the terms and conditions of this Agreement.
G. 3-D,
now a wholly-owned subsidiary of Magnetech, has entered into a
lease for facilities in Massillon, Ohio in accordance with
Article 6.01(d) of the Membership Interest Purchase Agreement
(“Lease”).
H. Magnetech
has delivered its Promissory Note to BDeWees, Inc. in the
amount of $2,000,000.00 in accordance with Section 3.04 of the
Membership Interest Purchase Agreement
(“Note”)
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 . DeWees hereby acknowledges and
agree s that his execution of this
Agreement is a material inducement to Magnetech to consummate the transactions
contemplated by the Membership Interest
Purchase Agreement. DeWees further acknowledges and agrees
that the consummation by Magnetech of the transactions contemplated
by the
Membership Interest Purchase Agreement, with the resulting
significant benefits to the DeWees , 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 two (2)
years.
3. Covenants
of DeWees.
(a)
Covenants Against Competition and Solicitation.
DeWees agrees that he will not, for the Prohibited
Period (as defined below), without the express written consent
of Company, unless there has been a default by the Company
under the Lease or the Note that has not been cured in the
period of time allowed for cure in the Lease:
(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);
(ii) Directly
or indirectly, induce, hire or solicit or seek to induce, hire
or solicit any person who was engaged with 3-D 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; or
(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 3-D at any time within one year before the
Closing Date.
For
purposes of this Agreement, the “Prohibited
Territory” means anywhere within a one thousand (1000)
mile radius of each of 3-D’s locations (in Massillon and
Cincinnati), unless that geographic restriction is deemed to
be of unreasonably broad scope, and therefore unenforceable,
b
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