EXHIBIT 10.18
EMPLOYEE NON-COMPETITION AGREEMENT
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NON-COMPETITION AGREEMENT dated October 2, 1998 by and among Voyager
Information Networks, Inc., a Michigan corporation (the "Buyer") and Christopher
Michaels (the "Employee"). Reference is hereby made to (a) that certain Asset
Purchase Agreement dated as of September 26, 1998 (the "Purchase Agreement") by
and among Buyer, NetLink Systems, L.L.C. ("Seller") and the Principals named
therein, and (b) that certain Employment Agreement (the "Employment Agreement")
by and between Buyer and the Employee of even date herewith. All capitalized
terms used herein and not defined shall have the meanings given to them in the
Purchase Agreement and the Employment Agreement.
WITNESSETH
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WHEREAS, the Employee has established a valuable and recognized expertise
in owning and operating an Internet dial-up interconnectivity and web-hosting
business;
WHEREAS, it is a material inducement and condition precedent to Buyer's
obligation to consummate the transactions under the Purchase Agreement and to
enter into the Employment Agreement that the Employee enter into this Non-
competition Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
Section 1. Non-competition; Non-solicitation; Disclosure. In view of the
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fact that any activity of the Employee in violation of the terms hereof would
adversely affect Buyer and its subsidiaries (as defined below) and would deprive
Buyer of the benefits and bargains under the Purchase Agreement, the Employee
hereby agrees to the following restrictions on his activities:
(a) Non-competition and Non-solicitation. The Employee hereby agrees
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that during the period commencing on the date hereof and ending on the date
which is the later to occur of (i) termination of Employee's employment under
the Employment Agreement and (ii) the date on which the Employee's Termination
Benefits under the Employment Agreement cease (provided, however, that if the
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Employee is terminated for cause under the Employment Agreement, the period
shall be for one (1) year from the date of such termination), he will not,
without the express written consent of Buyer, directly or indirectly, anywhere
in the Restricted Region (which shall include directing services within the
Restricted Region from outside the Restricted Region), engage in any activity
which is, or participate or invest in, or provide or facilitate the provision of
financing to, or assist (whether as owner, part-owner, shareholder, member,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity), any business, organization or person other than Buyer (or any
subsidiary or affiliate of Buyer), and including any such business, organization
or person involving, or which is, a family member of the Employee, whose
business, activities, products or services are,
competitive with any of the business, activities, products or services conducted
or offered by Buyer and its subsidiaries and affiliates with respect to the
provision of dial-up and dedicated Internet connectivity services, web-hosting,
domain hosting, web development, Internet telephony and competitive local
exchange carrier services (collectively the "Business"). Without implied
limitation, the forgoing covenant shall include hiring or engaging or attempting
to hire or engage for or on behalf of himself or any such competitor any officer
or employee of Buyer or any of its direct and/or indirect subsidiaries and
affiliates, or any former employee of Buyer and any of its direct and/or
indirect subsidiaries and affiliates who was employed during the six (6) month
period immediately preceding the date hereof, encouraging for or on behalf of
himself or any such competitor, any such officer or employee to terminate his or
her relationship or employment with Buyer or any of its direct or indirect
subsidiaries and affiliates, soliciting for or on behalf of himself or any such
competitor any client of Buyer or any of its direct or indirect subsidiaries and
affiliates during the term of his employment with Buyer and diverting to any
person (as hereinafter defined) any client or business opportunity of Buyer or
any of any of its direct or indirect subsidiaries and affiliates.
Notwithstanding anything herein to the contrary, the Employee may make
passive investments in any enterprise the shares of which are publicly traded if
such investment constitutes less than one percent (1%) of the equity of such
enterprise.
For purposes of this Agreement, (i) any reference to the subsidiaries of
Buyer shall be deemed to include all entities directly or indirectly controlled
by it through an ownership of more than fifty percent (50%) of the voting
interests, (ii) the term "affiliate" shall mean, with respect to any person or
entity, any person or entity which directly or indirectly controls, is
controlled by or is under common control with such person or entity, (iii) the
term "person" shall mean an individual, a corporation, an association, a
partnership (limited or general), a limited liability company, an estate, a
trust, and any other entity or organization, and (iv) the term "Restricted
Region" shall mean anywhere within the States of Illinois, Indiana, Michigan,
Minnesota, Missouri, Ohio and Wisconsin.
(b) Disclosure. The Employee agrees that, during the term of this
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Agreement and for all times thereafter, such party shall not divulge or make
available to any person, other than its professional advisors, agents and
representatives, or use any information customarily deemed confidential or other
documents, files or papers concerning the business or assets acquired by Buyer
under the Purchase Agreement, without the written consent of Buyer, unless such
disclosure is otherwise required by applicable law.
Section 2. Scope of Agreement. The parties acknowledge that the time,
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scope, geographic area and other provisions of this Agreement have been
specifically negotiated by sophisticated commercial parties and agree that (a)
all such provisions are reasonable under the circumstances of the transactions
contemplated hereby, (b) are given as an integral and essential part of the
transactions contemplated hereby and (c) but for the covenants of the Employee
contained in this Agreement, Buyer would not have entered into or consummated
the transactions contemplated by the Purchase Agreement. Each of the parties
hereto acknowledge
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and agree that it or he has independently consulted with its or his counsel and
has been advised in all respects concerning the reasonableness and propriety of
the covenants contained herein, with specific regard to the business to be
conducted by Buyer and its subsidiaries and affiliates, and represents that the
Agreement is intended to be, and shall be, fully enforceable and effective in
accordance with its terms.
Section 3. Certain Remedies; Severability. It is specifically
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understood and agreed that any breach of the provisions of this Agreement by the
Employee will result in irreparable injury to Buyer and its subsidiaries and
affiliates, that the remedy at law alone will be an inadequate remedy for such
breach and that, in addition to any other remedy it may have, Buyer and any of
its subsidiaries and affiliates shall be entitled to enforce the specific
performance of this Agreement against the Employee hereto through both temporary
and permanent injunctive relief without the necessity of proving actual damages,
but without limitation of their right to damages and any and all other remedies
available to them, it being understood that injunctive relief is in addition to,
and not in lieu of, such other remedies. In the event that any covenant
contained in this Agreement shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the maximum period of time for which it may be enforceable and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. The existence of any claim or cause of
action which Seller or the Employee may have against Buyer or any of its
subsidiaries or affiliates shall not constitute a defense or bar to the
enforcement of any of the provisions of this Agreement.
Section 4. Jurisdiction. The parties hereby irrevocably submit to the
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exclusive jurisdiction of the courts of the State of Michigan to construe and
enforce the covenants contained in this Agreement.
Section 5. Notices. All notices, requests, demands and other
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communications hereunder shall be deemed to have been duly given if delivered,
telecopied or mailed by certified or registered mail:
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To Buyer: Voyager Information Networks, Inc.
4660 S. Hagadorn Road
East Lansing, MI 48823
Facsimile: (517) 324-8965
Attn: Christopher Torto
copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Facsimile: (617) 523-1231
Attention: David F. Dietz, P.C.
To the Employee: Christopher Michaels
8141 Talaria Terrace
Kalamazoo, MI 49009
copy to: Kreis, Enderle, Callander & Hudgins, P.C.
One Moorsbridge
P. O. Box 4010
Kalamazoo, MI 49003
Facsimile: (616) 324-3010
Attn: Matthew DePerno, Esq.
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
Section 6. Miscellaneous. This Agreement shall be governed by and
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construed under the laws of the State of Michigan, and shall not be modified or
discharged in whole or in part except by an agreement in writing signed by each
party. The prevailing party in any controversy hereunder shall be entitled to
reasonable attorneys' fees and expenses. The failure of any of the parties to
require the performance of a term or obligation or to exercise any right under
this Agreement or the waiver of any breach hereunder shall not prevent
subsequent enforcement of such term or obligation or exercise of such right or
the enforcement at any time of any other right hereunder or be deemed a waiver
of any subsequent breach of the provision so breached, or of any other breach
hereunder. This Agreement shall inure to the benefit of, and be binding upon,
successors of Buyer by way of merger, consolidation or transfer of substantially
all the assets or stock of Buyer, or in connection with the granting by Buyer of
a security interest in this Agreement to its senior lenders, and may not be
assigned by any other party. This Agreement supersedes all prior understandings
and agreements between the parties relating to the subject matter hereof.
Section 7. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Non-competition
Agreement under seal as of the date first set forth above.
BUYER:
VOYAGER INFORMATION NETWORKS, INC.
By: /s/ Christopher Torto
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Name: Christopher Torto
Title: Chief Executive Officer
EMPLOYEE:
/s/ Christopher Michaels
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Christopher Michaels
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