Exhibit 5
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT, dated as of July 10, 2001 (this
"Agreement"), is entered into by GLOBAL CROSSING LTD., a company organized
under the laws of Bermuda ("Global Crossing") and ASIA GLOBAL CROSSING LTD., a
company organized under the laws of Bermuda ("Asia Global Crossing").
WHEREAS, on July 10, 2001, Global Crossing and Asia Global Crossing,
among others, entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which it is intended that Asia Global Crossing will
acquire from Global Crossing (the "Acquisition") the outstanding share capital
of certain entities acquired by Global Crossing as part of its June 14, 2000
mergers with IPC Communications, Inc. ("IPC") and IXNet, Inc.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Acquisition" shall have the meaning specified in the recitals hereto.
"Agreement" shall have the meaning specified in the preamble hereto.
"Asia Global Crossing" shall have the meaning specified in
the preamble hereto.
"Competing Entity" shall have the meaning specified in Section 2(a)
hereof.
"Control" means, with respect to any Person, the power to direct or cause
the direction of the management of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
The terms "Controlling" and "Controlled" shall have meanings correlative to
the foregoing.
"Global Crossing" shall have the meaning specified in the preamble
hereto.
"Invest In" shall have the meaning specified in Section 2(a) hereof.
"IPC" shall have the meaning specified in the recitals hereto.
"IPC Asia Business" means the business currently conducted by IPC within
the Territory as of the date hereof.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, governmental authority or other
entity.
"Shareholders Agreement" means, as amended, the Subscription and
Shareholders Agreement, dated as of October 12, 2000 among Global Crossing,
Microsoft Corporation, Softbank Corp. and Asia Global Crossing.
"Stock Purchase Agreement" shall have the meaning specified in the
recitals hereto.
"Subsidiary" means as to any Person, (i) any corporation of which more
than 50% of the outstanding stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person have more than a 50% equity interest therein.
"Territory" shall have the meaning specified in the Shareholders
Agreement.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.
(c) All references herein to Articles, Sections and Schedules shall be
deemed to be references to Articles and Sections of and Schedules to this
Agreement, unless the context shall otherwise require. All Schedules attached
hereto shall be deemed incorporated herein as if set forth in full herein.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provisions of this Agreement.
(e) The words "include", "includes" and " including" shall be deemed to
be followed by the phrase "without limitation".
2. Non-Competition.
(a) Global Crossing hereby (i) agrees not to engage in, and agrees to
cause its Subsidiaries not to engage in, directly or indirectly, any service
or activity within the scope of the IPC Asia Business in the Territory other
than through Asia Global Crossing, and (ii) agrees, and agrees to cause its
Subsidiaries, not to form, enter into any agreement or other arrangement
(other than through Asia Global Crossing) with any third party for an
investment in or otherwise invest in, (collectively, "Invest In") any entity
other than Asia Global Crossing engaged or, in the case of an entity with no
significant operations or operating history, expressly intending to engage,
primarily, in any service or activity within the scope of the IPC Asia
Business in the Territory (a "Competing Entity") except as otherwise provided
in this Section 2.
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(b) Notwithstanding clause (a) of this Section 2, Global Crossing and its
Subsidiaries (i) may Invest In any Competing Entity so long as the
consolidated revenues of such Competing Entity from any service or activity
within the scope of the IPC Asia Business do not in the aggregate exceed 33%
of the total consolidated revenues of such Competing Entity and (ii) may
Invest In up to 15% of the outstanding capital stock or voting stock of any
Competing Entity whose consolidated revenues from any service or activity
within the scope of the IPC Asia Business exceed 33% of the total consolidated
revenues of such Competing Entity. For purposes of this clause (b), revenues
of a Competing Entity shall be determined on the basis of financial
information for the most recent period of twelve months for which financial
information is available or, in the case of any entity with no significant
operations or operating history (as determined in good faith by Global
Crossing), on the basis of the entity's projections or operating plan for the
twenty-four month period following the date of such investment.
(c) Notwithstanding clause (a) of this Section 2, Global Crossing and its
Subsidiaries shall be permitted to engage in (and enter into investments that
are engaged in) any service or activity within the scope of the IPC Asia
Business in the Territory (whether or not through Asia Global Crossing and its
subsidiaries) to the extent that such service, activity or investment was
considered by the Board of Directors of Asia Global Crossing (under Bye-Law
96(2) of the Bye-Laws of Asia Global Crossing) and was not approved.
(d) The obligations of Global Crossing under this Section 2 shall
terminate on July 10, 2003.
3. Remedies Upon Breach.
The parties recognize that the obligations imposed on them in this
Agreement are special, unique and of extraordinary character, and that in the
event of breach by any party, damages will be an insufficient remedy;
consequently, it is agreed that the parties hereto shall be entitled to an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to have specific performance (in addition
to damages) as a remedy for the enforcement hereof, without proving damages.
No party shall raise any argument as to the sufficiency of money damages.
4. Miscellaneous.
(a) Assignment. This Agreement may not be assigned without the prior
written consent of the non-assigning party or parties. Except as otherwise
provided herein, the terms and conditions of this Agreement shall be for the
benefit of and be binding upon the permitted successors and assigns of the
parties hereto.
(b) Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
(c) Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York.
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(d) Section Headings. Headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the
scope or interest of this Agreement or any provisions hereof.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) Notices. All notices, requests and other communications to any party
shall be given to such party at the address or facsimile numbers, as
applicable, stated in the Shareholders Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
GLOBAL CROSSING LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President & General Counsel
ASIA GLOBAL CROSSING LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Counsel and Corporate Secretary
