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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
Willkie Farr & Gallagher 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
Willkie Farr & Gallagher 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
t
