Magnetech DeWees Non-Compete Agreement
Exhibit
10.11
Magnetech
▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (“▇▇▇▇▇▇”).
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 ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ in Massillon, Ohio,
and at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ in Cincinnati, Ohio (“the Business”).
▇. ▇▇▇▇▇▇
has been the President of 3-D since its
inception. Through BDeWees, Inc., an Ohio corporation which he wholly
owns, ▇▇▇▇▇▇ has also owned fifty percent (50%) of 3-D since its
inception.
▇. ▇▇▇▇▇▇
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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(“▇▇▇▇▇▇▇▇▇”).
F. The
consummation by Magnetech of the transactions contemplated by the Membership
Interest Purchase Agreement is in reliance upon the assurance of ▇▇▇▇▇▇ 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. ▇▇▇▇▇▇
hereby acknowledges and
agrees
that his execution of this Agreement is
a material inducement to Magnetech
to consummate the transactions
contemplated by the Membership Interest Purchase
Agreement. ▇▇▇▇▇▇
further acknowledges and agrees that
the consummation by Magnetech
of the transactions contemplated by
the
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Membership
Interest Purchase Agreement, with the
resulting
significant benefits to the ▇▇▇▇▇▇,
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 ▇▇▇▇▇▇.
(a) Covenants
Against Competition and Solicitation. ▇▇▇▇▇▇ 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, 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 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, 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 each of 3-D’s locations (in Massillon and
Cincinnati).
The
term
“Prohibited Period” shall be defined as a period of two (2) years from and after
the Closing Date as defined in the Membership Interest Purchase
Agreement.
(b) Reasonableness
of Covenants. ▇▇▇▇▇▇ 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 Magnetech’s investment in the Membership Interests
of 3-D 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. ▇▇▇▇▇▇ acknowledges that Company’s remedy at law
for any breach of ▇▇▇▇▇▇’ 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):
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If
to Company:
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Magnetech
Industrial Services, Inc.
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn:
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▇▇▇▇
▇. ▇▇▇▇▇▇▇
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and
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▇▇▇▇▇
▇. ▇▇▇▇▇
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with
a copy to:
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▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP
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600
1st Source Bank Center
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▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
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If
to ▇▇▇▇▇▇:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
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▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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with
a copy to:
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DAY
▇▇▇▇▇▇▇▇ LTD.
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Millennium
Centre, Ste. 300
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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(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 Ohio, without giving effect to principles of conflicts
of
laws. The parties expressly consent to exclusive personal jurisdiction and
venue
in the federal and state courts of the State of Ohio.
(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.
(f) Entire
Agreement and Amendment. This Agreement sets forth the entire understanding
of the parties, there being no oral or other written agreements or
understandings between 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 ▇▇▇▇▇▇ has executed this Non-Compete
Agreement on the date or dates indicated below, effective as of the Effective
Date.
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Magnetech
Industrial Services, Inc.
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| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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▇▇▇▇
▇. ▇▇▇▇▇▇▇, President and CEO
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Date:
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November 30, 2007 |
Date:
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November 30, 2007 | ||
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