1
EXHIBIT 10.14
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of November 5, 1999, between ORION
POWER HOLDINGS, INC., a Delaware corporation (the "Company") and MITSUBISHI
CORPORATION, a Japan corporation ("Mitsubishi").
WITNESSETH
WHEREAS, GS CAPITAL PARTNERS II, L.P., a Delaware limited partnership
("GSCP"), and CONSTELLATION POWER SOURCE, INC., a Delaware corporation
("Constellation"), as of March 10, 1998, caused the formation of the Company and
entered into a Stockholders' Agreement relating thereto (the "Original
Stockholders' Agreement");
WHEREAS, the Company has been formed for the purpose of investing in
and managing the operations of electric generating assets in the United States
and Canada (the "Portfolio Assets");
WHEREAS, as of June 25, 1999, the Company, GSCP and Constellation
amended and restated the Original Stockholders' Agreement in its entirety (the
"First Amended and Restated Stockholders' Agreement");
WHEREAS, as of September 29, 1999, and October 4, 1999 Mitsubishi and
Tokyo Electric Power Company International B.V. ("TEPCO International"),
respectively entered into Subscription Agreements pursuant to which the Company
committed to issue, and Mitsubishi and TEPCO International committed to
purchase, 77,419.355 and 51,612.903 shares, respectively, of Common Stock at the
price of $1,550.00 per share, for an aggregate purchase price of $120,000,000.00
and $80,000,000.00, respectively;
WHEREAS, as of the date hereof, the Company, GSCP, Constellation,
Mitsubishi, TEPCO International and the other parties named therein amended and
restated the First Amended and Restated Stockholders' Agreement in its entirety
(the "Second Amended and Restated Stockholders' Agreement"); and
WHEREAS, the parties hereto intend to establish terms pursuant to which
Mitsubishi and any Affiliate of Mitsubishi (collectively, the "Mitsubishi
Group") may engage in the acquisition of Facilities.
NOW, THEREFORE, in consideration of the promises and of the mutual
commitments and obligations hereinafter set forth, the parties hereto hereby
agree as
2
follows:
SECTION 1. Definitions. As used herein, the following terms shall have
the following meanings:
"Auction" means the attempted sale of a Facility or Facilities pursuant
to which the owner of the Facility or Facilities has stated or announced that it
intends to have or is having discussions, for the purpose of soliciting a bid or
bids, with respect to such sale of the Facility or Facilities, or interests
therein with more than one potential buyer.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person.
"Facility" means an electric generating facility in the United States
or Canada that, at the time of any purchase or attempted purchase, is either
fully constructed or has, or has previously had, commercial operations.
"Greenfield Project" means a project to construct a new electric
generating facility in the United States or Canada when the interest to be
acquired is acquired prior to one hundred thirty five (135) days after the date
of commercial operation.
"IPO" means an underwritten offering or series of underwritten
offerings pursuant to which the common stock, par value $.01 per share ("Common
Stock") of the Company, becomes registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (a) in which either (i)
the Common Stock issued in such IPO constitutes at least 20% of the Common Stock
or (ii) the gross proceeds to the Company and any selling stockholders, in the
aggregate, is at least $75 million before deducting underwriting discounts,
commissions and offering expenses and (b) which results in the Common Stock
being held by at least 500 holders of record within the meaning of Rule 12g5-1
under the Exchange Act.
"Negotiated Transaction" shall have the meaning set forth in Section 4.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, other entity or government or any agency or
political subdivisions thereof.
SECTION 2. Term. The term of this Agreement shall be from the date
hereof until the earlier to occur of (i) the closing of an IPO, (ii) six months
after the date on which all Mitsubishi Group representatives or nominees have
ceased to hold any of the following positions of the Company: director,
observer, officer or employee, (iii) the liquidation of the Company, and (iv)
five years after the date hereof.
- 2 -
3
SECTION 3. Auctions. With respect to a Facility which is the subject of
an Auction, the Mitsubishi Group shall be prohibited from bidding, and shall not
bid, or take any steps with the seller of the Facility or any other third party
to materially further the acquisition of such Facility, or any interest therein
("Acquisition Actions"), unless the Company provides the Mitsubishi Group with
prior written notice that the Mitsubishi Group may take Acquisition Actions with
respect to such Facility (the "Granting Notice"). Any Granting Notice shall be
given by the Company in the sole discretion of the Company and under no
circumstance shall the Company be under an obligation to provide a Granting
Notice. If the Company provides to the Mitsubishi Group a Granting Notice with
respect to a Facility, the Mitsubishi Group may take any and all Acquisition
Actions with respect to such Facility. The Company may, but shall be under no
obligation to, proceed with Acquisition Actions with respect to a Facility for
which it did not provide a Granting Notice.
SECTION 4. Negotiated Transactions. If the Mitsubishi Group wishes to
take Acquisition Actions with respect to a Facility (the "Subject Facility")
which is not the subject of an Auction (any transaction, or attempted
transaction, to acquire any such Facility, or an interest therein, is referred
to as a "Negotiated Transaction"):
(i) the Mitsubishi Group shall provide, in good
faith, taking into account all relevant facts and circumstances, the Company
with written notice (a "Facility Notice") including (a) the identity of the
Subject Facility, (b) a statement that the Mitsubishi Group, subject to this
Section 4, intends to take Acquisition Actions to purchase such Subject
Facility, or an interest therein, and (c) a statement that the Mitsubishi Group
believes it has a reasonable probability of acquiring such Subject Facility, or
an interest therein, in such Negotiated Transaction. The Company shall provide a
written response (a "Response") to any and all Facility Notices, which Response
shall indicate whether or not the Company intends to take Acquisition Actions
with respect to the purchase of the Subject Facility, or an interest therein (a
Response stating that the Company does not have such intention is referred to as
a "No Intention Response"). Such Response shall be given in good faith, taking
into account all relevant facts and circumstances, within sufficient time (a
"Response Period") to allow the Mitsubishi Group, if a No Intention Response is
given, to pursue, on a commercially reasonable basis, the purchase of such
Subject Facility, or an interest therein, in the Negotiated Transaction. Prior
to the receipt of a Response to a Facility Notice, the Mitsubishi Group shall
take no Acquisition Actions with respect to the Subject Facility.
(ii) In the event the Company indicates in a Response
that it intends to take Acquisition Actions with respect to the purchase of the
Subject Facility, or an interest therein, through a Negotiated Transaction (a
"Positive Response"), the Mitsubishi Group shall be precluded from taking any
Acquisition Actions with respect to the Subject Facility; provided, however,
that in the event that the Company, after initially
- 3 -
4
giving a Positive Response with respect to the purchase of such Subject
Facility, or an interest therein, subsequently decides not to pursue such
purchase, the Company shall promptly provide a No Intention Response to the
Mitsubishi Group with respect to such Subject Facility. If the Company gives a
No Intention Response, the Mitsubishi Group shall have the right to take
Acquisition Actions with respect to the purchase of the Subject Facility, or an
interest therein.
(iii) In the event that, during negotiations with
respect to a Negotiated Transaction, the seller of the Subject Facility
commences an Auction, the provisions of Section 3 shall apply to such Subject
Facility, and the Mitsubishi Group shall immediately terminate any Acquisition
Actions with respect to such Subject Facility unless a Granting Notice is given
with respect to such Subject Facility.
SECTION 5. Excluded Assets. Notwithstanding the foregoing, the
Mitsubishi Group shall have the right to take Acquisition Actions, with respect
to (i) any interest in an existing Facility owned by the Mitsubishi Group as of
the date of this Agreement, (ii) to a Greenfield Project and (iii) any interest
in a Facility in which Mitsubishi and a Person identified in a separate letter
between the Company and Mitsubishi dated the date hereof, have a joint
investment, whether before or after the date of this Agreement.
SECTION 6. Representations and Warranties. Each party represents and
warrants to the other parties that: (i) it is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation, (ii)
it has all regulatory authorizations necessary for it to legally perform its
obligations under this Agreement and any other documentation relating to this
Agreement, (iii) the execution, delivery and performance of this Agreement and
any other documentation relating to this Agreement are within its powers, have
been duly authorized by all necessary action and do not violate any of the terms
and conditions in its governing documents, any material contracts to which it is
a party or any law, rule or regulation material to it or order or the like
applicable to it, (iv) this Agreement and each other document executed and
delivered in accordance with this Agreement constitutes its legally valid and
binding obligation enforceable against it in accordance with its terms, (v)
there are no bankruptcy proceedings pending or being contemplated by it or, to
its knowledge, threatened against it, and (vi) there is not pending or, to its
knowledge, threatened against it or any of its affiliates, any legal proceedings
that could materially adversely affect its ability to perform its obligations
under this Agreement or any other document relating to this Agreement to which
it is a party.
SECTION 7. Assignment. No party shall assign this Agreement or its
rights or obligations hereunder to any party without the prior written consent
of the other party.
- 4 -
5
SECTION 8. Amendment and Waiver. No modification, amendment or waiver
of any provision of this Agreement shall be effective against any party unless
such modification, amendment or waiver is approved in writing by such party. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
SECTION 9. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
SECTION 10. Entire Agreement. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
SECTION 11. Counterparts. This Agreement may be executed in separate
counterparts each of which, when delivered to the other party, shall be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 12. Notices. Any notice provided for in this Agreement shall be
in writing and shall be either personally delivered or sent by facsimile or
reputable overnight courier service (charges prepaid) to the Company and
Mitsubishi at the addresses set forth below, or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally or on receipt.
The Company's address is: Orion Power Holdings, Inc.
0 Xxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
- 5 -
6
Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Mitsubishi Group's address is: Mitsubishi Corporation
c/o Mitsubishi International
Corporation
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx
Facsimile: (000) 000-0000
Attention: Legal Department
with a copy to: Mitsubishi Corporation
0-0 Xxxxxxxxxx 0-xxxxx, Xxxxxxx-xx
Xxxxx 000-0000, Xxxxx
Facsimile: 00-0-0000-0000
Attention: Legal Department
with a copy to: Xxxxxx, Xxxxx & Bockius LLP
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
SECTION 13. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America, in each case
located in the County of New York, for any action, proceeding or investigation
in any court or before any governmental authority ("Litigation") arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any Litigation relating thereto except in such courts),
and further agrees that service of any process, summons, notice or document by
U.S. registered mail to its respective address set forth in this Agreement shall
be effective service of process for any Litigation brought against it in any
such court. Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any Litigation arising out of
this Agreement or the transactions contemplated hereby in the courts of the
State of New
- 6 -
7
York or the United States of America, in each case located in the County of New
York, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such Litigation brought in any such
court has been brought in an inconvenient forum. Each of the parties irrevocably
and unconditionally waives, to the fullest extent permitted by applicable law,
any and all rights to trial by jury in connection with any Litigation arising
out of or relating to this Agreement or the transactions contemplated hereby.
SECTION 14. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 15. Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
SECTION 16. Remedies. Each party hereto shall be entitled to enforce
its rights under this Agreement specifically to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that each party may in its sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement. In no case shall
any party be liable to the other for a breach of this Agreement for
consequential, indirect, punitive or special damages.
SECTION 17. Confidentiality. The parties hereto shall keep the
existence and the terms of this Agreement strictly confidential unless (i) the
disclosing party has received the advice of independent counsel that such
disclosure is required by any law (including, without limitation, any judicial
order) or other requirement of any governmental entity to which the disclosing
party is subject (provided that prior to such disclosure, the disclosing party
promptly advises and consults with the non-disclosing parties concerning the
information it proposes to disclose), (ii) the disclosing party discloses such
information to a potential purchaser of Company equity held by the disclosing
party (provided that prior to such disclosure, the potential purchaser executes
a confidentiality agreement imposing confidentiality obligations on such
potential purchaser with respect to any non-competition agreement substantially
identical to the confidentiality obligations imposed by this Section 17) or
(iii) such information becomes publicly available (other than as a result of any
act or omission
- 7 -
8
by such disclosing party).
[INTENTIONALLY LEFT BLANK]
- 8 -
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
ORION POWER HOLDINGS, INC.
By: ____________________________________
Name: Xxxx Xxxxx
Title: Chief Operating Officer
MITSUBISHI CORPORATION
By: ____________________________________
Name:
Title:
10
MITSUBISHI CORPORATION
0-0, Xxxxxxxxxx 0-xxxxx, Xxxxxxx-xx
Xxxxx 000-0000
Xxxxx
November ___, 1999
Orion Power Holdings, Inc.
0 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
RE: NON-COMPETITION AGREEMENT, BY AND BETWEEN MITSUBISHI CORPORATION AND
ORION POWER HOLDINGS, INC., DATED AS OF EVEN DATE HEREWITH
Ladies and Gentlemen:
Reference is hereby made to that certain Non-Competition Agreement, by and
between Mitsubishi Corporation ("Mitsubishi") and Orion Power Holdings, Inc.
("Orion"), dated as of even date herewith (the "Non-Competition Agreement").
Capitalized terms used herein but not otherwise defined shall have the meaning
ascribed to them in the Non-Competition Agreement.
For purposes of Section 5(iii) of the Non-Competition Agreement, Mitsubishi and
Orion hereby agree that the Persons to be identified in accordance with the
terms thereof is hereby identified as Tenaska, Inc. and its affiliates.
Sincerely yours,
MITSUBISHI CORPORATION
By:
Name:
Its:
AGREED AND ACKNOWLEDGED:
ORION POWER HOLDINGS, INC.
By:
Name:
Its:
