EXHIBIT 10.6
EXECUTION COPY
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, dated as of March 17, 2004, is among
Intelsat, Ltd., a Bermuda company ("PARENT"), Intelsat (Bermuda), Ltd., a
Bermuda company ("PURCHASER"), Loral SpaceCom Corporation, a Delaware
corporation and a debtor and debtor in possession ("LORAL SPACECOM"), Loral
Satellite, Inc., a Delaware corporation and a debtor and debtor in possession
("LORAL SATELLITE"), Loral Space & Communications Corporation, a Delaware
corporation and a debtor and debtor in possession ("LORAL HOLDINGS" and,
together with Loral SpaceCom and Loral Satellite, the "SELLERS"), Loral Space &
Communications Ltd., a Bermuda company and a debtor and debtor in possession
("LORAL PARENT"), Loral Orion, Inc., a Delaware corporation and a debtor and
debtor in possession ("ORION") and Loral Skynet Network Services, Inc., a
Delaware corporation and a debtor and debtor in possession ("LSNS" and, together
with the Sellers, Loral Parent and Orion, the "SELLER PARTIES").
W I T N E S S E T H:
WHEREAS, the Sellers, among other things, own and operate geostationary
earth orbit satellites on which transponder capacity is leased or sold to
customers for various applications ("GEO SATELLITES");
WHEREAS, pursuant to an Asset Purchase Agreement, dated as of July 15,
2003, as amended (the "PURCHASE AGREEMENT"), among Parent, Purchaser and the
Sellers, the Sellers have agreed to sell, and Purchaser has agreed to purchase,
certain of such GEO Satellites (collectively, the "PURCHASED SATELLITES"),
together with the other Purchased Assets (as defined in Section 2.1 of the
Purchase Agreement);
WHEREAS, as a material inducement to Purchaser to purchase the
Purchased Satellites, together with the other Purchased Assets, and to secure to
Purchaser the full enjoyment of the Purchased Satellites, together with the
other Purchased Assets, the parties hereto desire to enter into a covenant
restricting the Seller Parties and their wholly-owned subsidiaries from
competing against Purchaser upon the terms and conditions hereinafter specified;
WHEREAS, pursuant to the Purchase Agreement, Sellers have agreed to
enter into this Agreement and to cause their wholly-owned subsidiaries to be
bound hereby;
WHEREAS, Parent and Purchaser will not consummate the transactions
contemplated by the Purchase Agreement unless the Seller Parties execute and
deliver this Agreement;
WHEREAS, the consummation of the transactions under the Purchase
Agreement will represent a material benefit to all of the Seller Parties and
their wholly-owned subsidiaries in completing their reorganizations;
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WHEREAS, the execution and delivery of this Agreement is a condition to
each of Parent's and Purchaser's obligations under the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to the terms and conditions herein
set forth, the parties hereto agree as follows:
1. EFFECTIVE DATE AND TERM. The term (the "TERM") of this Agreement
shall be for a period of two years commencing as of the date first written
above.
2. AGREEMENT NOT TO COMPETE.
2.1. NONCOMPETITION. During the Term, none of the Seller Parties nor
any of their respective direct or indirect, wholly-owned subsidiaries
(collectively, the "SELLER GROUP"), shall, directly or indirectly, engage in or
participate in any Competitive Business, or be employed by, consult for, or act
as an advisor to any Person that is engaged in or participates in any
Competitive Business. Notwithstanding the foregoing, nothing herein shall
prohibit any Person (the "ACQUIRING PERSON") that acquires any assets of any
member of the Seller Group from engaging in any Competitive Business, provided
that for a period of twelve (12) months following the date of this Agreement
such Acquiring Person shall not use any satellite purchased from any Seller
Group member (the "SELLING MEMBER") to engage in any Competitive Business, and
each Selling Party agrees to cause the Selling Member to require the Acquiring
Person to agree in the relevant acquisition document that it will comply with
such restriction and that the Purchaser is a third party beneficiary of such
obligation with rights to enforce its rights herein directly against such
Acquiring Person. In addition, notwithstanding the first sentence of this
Section 2.1, nothing herein shall prohibit: (a) any Seller Group member from
having an investment in or merging with any Person that is engaged in any
Competitive Business, provided that no member of the Seller Group shall sell,
lease or otherwise furnish its satellite capacity to such Person for use in any
Competitive Business during the Term; (b) any Seller Group member from engaging,
directly or indirectly, in the Network Services Business or Professional
Services Business; or (c) any member of the Seller Group from engaging in any
Competitive Business pursuant to legally binding agreements in effect as of the
date of this Agreement, and any renewal or replacement (for similar capacity)
thereof, provided that the Seller Parties hereby (i) represent and warrant to
the Purchaser that they have deposited with Xxxxxxx Xxxx & Xxxxxxxxx LLP or
other mutually acceptable escrow agent a true and complete list of such existing
contracts, together with a description of the type and amount of capacity
subject thereto, and (ii) agree to cause Xxxxxxx Xxxx & Xxxxxxxxx LLP or other
mutually acceptable escrow agent to disclose promptly to Purchaser such
information as it may reasonably and in good faith request from such list
related to a customer that Purchaser believes may be receiving capacity in
violation of the requirements set forth in this Section 2.1.
2.2. NO SOLICITATION. During the Term, no member of the Seller Group
shall solicit any of the Persons listed on ANNEX A hereto (each a "CUSTOMER") to
migrate
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its service on the Purchased Satellites as of the date hereof (which shall
include any renewal thereof) to satellite capacity owned by a member of the
Seller Group or any Affiliate thereof.
2.3. NO DEVELOPMENT OF CONUS ARC. During the Term, no member of the
Seller Group shall launch or otherwise locate, or assist any other Person to
locate, a geosynchronous satellite in any orbital position situated within the
CONUS Arc that is licensed to any member of the Seller Group as of the date
hereof for the purpose of engaging in any Competitive Business.
2.4. DIVISIBILITY. If at any time the provisions of this Section 2
shall be determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 2 shall be
considered divisible and shall become and be automatically amended to apply only
to such area, duration and scope of activity as shall be determined to be
reasonable by the court or other body having jurisdiction over the matter, and
the Seller Parties agree that this Section 2, as so amended, shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein.
3. UNIQUE NATURE OF AGREEMENT; SPECIFIC ENFORCEMENT. Each of Parent,
Purchaser and the Seller Parties acknowledge and agree that the rights and
obligations set forth in this Agreement are of a unique and special nature and
that Parent and Purchaser are, therefore, without an adequate legal remedy in
the event of any Seller Party's violation of any of the covenants set forth in
this Agreement. Each of Parent, Purchaser and the Seller Parties agree,
therefore, that, in addition to all other rights and remedies at law or in
equity or otherwise that may be available to Parent and Purchaser, each of the
covenants made by the Seller Parties under this Agreement shall be specifically
enforceable in equity.
4. REPRESENTATION OF PARTIES. Each party hereto represents to each other
party that (i) it has full corporate power and authority to execute and deliver
this Agreement and to perform each of its obligations hereunder, (ii) the
execution, delivery and performance by it of this Agreement have been duly and
validly authorized and no additional corporate authorization or consent
(including, without limitation, any action by its shareholders) is required in
connection with the execution, delivery and performance by it of this Agreement
and (iii) this Agreement constitutes its valid and legally binding obligation,
enforceable in accordance with its terms.
5. TERMINATION. This Agreement shall terminate, and be of no further
force and effect upon the expiration of the Term. Termination of this Agreement
pursuant to the preceding sentence shall not excuse any party hereto for a
breach of this Agreement prior to such termination.
6. SCOPE OF COVENANTS. The parties acknowledge and agree that the
geographic scope and the duration of the provisions of Sections 2.1 are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by
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Sellers and are necessary for the protection of Purchaser's legitimate interest
and are necessary in order for them to enjoy the benefit of their bargain under
the Purchase Agreement.
7. MISCELLANEOUS.
7.1. DEFINITIONS. The following terms shall have the meanings
provided therefor below:
"COMPETITIVE BUSINESS" shall mean the business of leasing, selling or
otherwise furnishing Fixed Satellite Service transponder capacity that is used
by a Person for both uplinking and downlinking to or from any location(s) within
the United States of America, including Alaska and Hawaii. As used herein, the
term" Competitive Business" shall not include the Seller Parties' Network
Services Business and Professional Services Business.
"CONUS ARC" shall mean the orbital arc between 54(degree)X.X. and
143(degree)X.X. (inclusive).
"LAW" shall have the meaning ascribed to that term in the Purchase
Agreement.
"NETWORK SERVICES BUSINESS" shall mean the business of providing
end-to-end data solutions on networks comprised of earth terminals, space
segment, and where appropriate, networking hubs.
"PERSON" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization or a government or any
agency or political subdivision thereof.
"PROFESSIONAL SERVICES BUSINESS" shall mean the business of providing
(i) technical support and monitoring in the construction and launch of
satellites, (ii) telemetry, tracking and control services and (iii) technical
and operational support in the design, implementation and operation of data
networks over satellites.
"SUCCESSORS" shall mean the legal successor to any Person in connection
with any merger, reorganization or equivalent thereof; PROVIDED that (i)
Purchaser will not be a Successor to any Seller Party and (ii) an Acquiring
Person and the Persons described in clause (b) of the third sentence of Section
2.1 will not be a Successor to any Seller Party.
7.2. NOTICES. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by telecopier; PROVIDED that the telecopy is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
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To Parent or Purchaser:
Intelsat (Bermuda), Ltd.
Xxxxx Xxxxx, 0xx Xxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00, Bermuda
Telecopy: x000-000-0000
Attention: President
with a copy (which shall not constitute notice) to:
Intelsat Global Service Corporation
0000 Xxxxxxxxxxxxx Xxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: General Counsel and Senior Vice President for
Regulatory Affairs
with a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx Xxxxxxxxxx, Esq.
To Seller Parties:
Loral Space & Communication Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
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7.3 . AMENDMENT; WAIVER. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties hereto, or, in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by Law.
7.4. ASSIGNMENT. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other parties hereto; PROVIDED that Parent and Purchaser may assign their
rights hereunder to any wholly-owned subsidiary and may collaterally assign
their rights hereunder to any lender as security for any loan, which assignment
shall not relieve Parent or Purchaser of any obligations hereunder. Any
attempted assignment in contravention hereof shall be null and void.
7.5. PARTIES IN INTEREST. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective Successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any Person other than the parties hereto or their Successors and
permitted assigns any rights or remedies under or by reason of this Agreement.
7.6. PUBLIC DISCLOSURE. Notwithstanding anything herein to the
contrary, each of the parties to this Agreement hereby agrees with the other
parties hereto that, except as may be required to comply with the requirements
of any applicable Laws, and the rules and regulations of each stock exchange
upon which the securities of one of the parties is listed, no press release or
similar public announcement or communication shall ever be made or caused to be
made concerning the execution or performance of this Agreement unless
specifically approved in advance by the parties hereto (which approval shall not
be unreasonably withheld or delayed).
7.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY
ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT,
WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY (A) IN THE
UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK TO THE
EXTENT THAT SUCH BANKRUPTCY COURT HAS JURISDICTION OVER SUCH ACTION OR
PROCEEDING, AND (B) IN ALL OTHER CASES IN THE UNITED STATES DISTRICT COURT FOR
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THE SOUTHERN DISTRICT OF NEW YORK (THE "CHOSEN COURTS") AND (I) IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN COURTS, (II) WAIVES ANY
OBJECTION TO LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURTS,
(III) WAIVES ANY OBJECTION THAT THE CHOSEN COURTS ARE AN INCONVENIENT FORUM OR
DO NOT HAVE JURISDICTION OVER ANY PARTY HERETO AND (IV) AGREES THAT SERVICE OF
PROCESS UPON SUCH PARTY IN ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF
NOTICE IS GIVEN IN ACCORDANCE WITH SECTION 5.2 OF THIS AGREEMENT.
7.8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.
7.9. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement that is held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
7.10. HEADINGS. The heading references herein are for convenience
purposes only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
7.11. MUTUAL DRAFTING. This Agreement is the product of joint
drafting and negotiation among the parties and no provision hereof shall be
construed for or against any party based upon such party having been responsible
or primarily responsible for the drafting thereof.
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the date first written above.
LORAL SPACECOM CORPORATION
By:/s/ Xxx Xxxx
---------------------------------------------
Name: Xxx Xxxx
Title: Vice President and Secretary
LORAL SATELLITE, INC.
By: /s/ Xxx Xxxx
-----------------------------------------------
Name: Xxx Xxxx
Title: Vice President and Secretary
LORAL SPACE & COMMUNICATIONS CORPORATION
By: /s/ Xxx Xxxx
-----------------------------------------------
Name: Xxx Xxxx
Title: Vice President and Secretary
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxx Xxxx
-----------------------------------------------
Name: Xxx Xxxx
Title: Vice President, General Counsel and
Secretary
LORAL ORION, INC.
By: /s/ Xxx Xxxx
-----------------------------------------------
Name: Xxx Xxxx
Title: Vice President and Secretary
LORAL SKYNET NETWORK
SERVICES, INC.
By: /s/ Xxx Xxxx
-----------------------------------------------
Name: Xxx Xxxx
Title: Vice President and Secretary
INTELSAT, LTD.
By: /s/ Xxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
INTELSAT (BERMUDA), LTD.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxxxx
Title: President
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