MAGNETECH EMBRESCIA 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 Thomas J. Embrescia
(“Embrescia”).
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. Embrescia
has been the Chairman of Board of 3-D si nce its
inception. Through XGen III, Ltd., an Ohio limited
liability company owned 90% by XGEN Ltd. and 10% by Venture
Equity & Derivative Investment, LLC (“XGen”),
Embrescia has also had an ownership or beneficial interest in
3-D since its inception.
C. Embrescia
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 Embrescia
to execute this Agreement, along with the execution of a
similar agreement by Bernard L. DeWees
(“DeWees”).
F. The
consummation by Magnetech of the transactions contemplated by
the Membership Interest Purchase Agreement is in reliance upon
the assurance of Embrescia 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 XGen III, Ltd. 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 . Embrescia 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. Embrescia 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 Embrescia , 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 Embrescia.
(a)
Covenants Against Competition and Solicitation.
Embrescia 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 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
