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 since 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 agrees 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
 

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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, 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.  DeWees 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.  DeWees acknowledges that Company’s remedy at
law for any breach of DeWees’ 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:
       
Magnetech Industrial Services, Inc.
   
1125 South Walnut Street
   
South Bend, Indiana  46619
   
Attn:
John A. Martell
   
and
James M. Lewis
             
with a copy to:
             
Barnes & Thornburg LLP
     
600 1st Source Bank Center
     
100 North Michigan
     
South Bend, Indiana 46601
     
Attn:  Richard L. Mintz, Esq.
         
If to DeWees:
Bernard L. DeWees
   
5316 Hawick Street, NW
   
Canton, OH 44708
             
with a copy to:
       

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DAY KETTERER LTD.
     
Millennium Centre, Ste. 300
     
200 Market Avenue North
     
Canton, Ohio 44702
     
Attn:  Daniel A. Minkler

(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 DeWees has executed this Non-Compete
Agreement on the date or dates indicated below, effective as of the Effective
Date.
 

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Bernard L. DeWees
 
Magnetech Industrial Services, Inc.
                    /s/ Bernard L. DeWees    /s/ John A. Martell 
Bernard L. DeWees
 
John A. Martell, President and CEO
         
Date:
November 30, 2007  
Date:
November 30, 2007

 
 
 
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