Exhibit 99.2
SETTLEMENT AGREEMENT AND MUTUAL RELEASES
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASES (the "Agreement") is made
and entered into this 9th day of February, 2007, among XXXXX X. XXXXXX, XX
(the "Examiner"), Court-approved Examiner for NewPower Holdings, Inc. and TNPC
Holdings, Inc,, and XXXXX XXX, formerly known as Xxxxx Xxx ("Xxx"), an
individual residing in Houston, Texas.
RECITALS
The Examiner represents that NewPower Holdings, Inc. ("Holdings"), TNPC
Holdings, Inc. ("TNPC") and The New Power Company ("New Power"; Holdings,
TNPC, and New Power are hereinafter referred to collectively as the "New Power
Parties"), each a Delaware corporation, were created for the stated purpose of
conducting retail marketing and sale of natural gas and electricity to
residential, commercial and industrial customers nationwide and that Holdings
and TNPC are holding companies, while New Power was an operating company.
The Examiner represents that the corporate existence of the New Power
Parties began with the incorporation by Enron Corp. ("Enron") of EMW Energy
Services Corp. ("EMW") as a Delaware corporation on November 17, 1999, and
that EMW originally was a wholly-owned subsidiary of Enron Energy Services,
LLC.
The Examiner represents that, when EMW was formed in November, 1999, Xxx
X. Xxx ("Pai") became, the Chairman of the EMW (later to become Holdings)
Board of Directors. The Examiner represents that, in September, 2001, Pai
resigned as Chairman of the Board and, in February, 2002, resigned from the
Holdings Board entirely.
The Examiner represents that, during the period from January, 2000
through November, 2000, BMW and its immediate successor, TNPC, Inc., conducted
two (2) private offerings and one (1) public offering of common stock and
warrants and that, in connection with these offerings, EMW ultimately was
reorganized into the New Power Parties, with these equity interests being held
in Holdings, the parent holding company of the New Power Parties.
The Examiner represents that, in July, 2000, Pai received what, after a
200/1 stock split, became 2,064,400 shares of stock of TNPC, Inc., the
successor of EMW. The Examiner represents that Pai subsequently acquired
additional shares of TNPC, Inc. and then Holdings stock.
On June 11, 2002 (the "New Power Petition Date"), the New Power Parties
filed voluntary petitions for bankruptcy relief in the United States
Bankruptcy Court for the Northern District of Georgia (the "New Power
Bankruptcy Court"), styled as )n re The New Power Company et al., Case Nos.
02-10835 through 02-10837 (the "New Power Bankruptcy Case"). The New Power
Bankruptcy Case is still pending.
Prior to the New Power Petition Date, Pai transferred to Xxx, his former
wife, 1,032,000 of the shares in Holdings which the Examiner represents Pai
initially received from TNPC, Inc, the immediate successor of EMW (the "Xxx
Shares").
Xxx represents that on or about March 22, 2002, Xxx delivered the
Certificates (as such term is defined below) to the Tender and Exchange
Department of The Bank of New York ("TBNY"), pursuant to instructions received
by Xxx after her execution of a certain Tender Agreement dated as of February
20, 2002 (the "Tender Agreement"), by and among Centrica plc, a limited
company organized under the laws of England and Wales (referred to as "Buyer"
in the Tender Agreement) and Xxx (referred to as "Equity Holder" in the Tender
Agreement). Xxx represents that she delivered the Certificates to TBNY based
upon information and belief that the following was true and correct: (i) that
Windsor Corporation was a wholly-owned subsidiary of Centrica plc and had made
an offer to purchase, dated March 1, 2002, (the "Offer to Purchase") any and
all outstanding shares of common stock, par value $.01 per share, of Holdings;
(ii) that Windsor Acquisition Corporation was likely the "Acquisition Sub"
defined in the Tender Agreement; and (iii) that TBNY was the depository under
the Offer to Purchase, Xxx represents, upon information and belief, that
Holdings was not acquired and that the Tender Agreement is null and void and
of no further force or effect, and Xxx represents that the Certificates were
not returned to her.
Xxx represents and warrants that, as of the execution and delivery of
this Agreement, she is the sole owner of the Certificates and the Xxx Shares,
that she has not assigned or conveyed, or purported to assign or convey,
voluntarily or involuntarily, or by operation of law, the Certificates or the
Xxx Shares, and that the Certificates and the Xxx Shares are not subject to
any encumbrance, claim, lien or interest in favor of a third party,
On December 2, 2002, the United States Trustee filed a motion in the New
Power Parties' bankruptcy case seeking the appointment of an examiner for
Holdings and TNPC. By Order entered January 13, 2003 (as amended, the
"Examiner Order"), the New Power Bankruptcy Court granted the United States
Trustee's motion and directed the appointment of an examiner.
On January 16, 2003, the United States Trustee appointed the Examiner,
and, by Order entered January 16, 2003, the New Power Bankruptcy Court
approved the Examiner's appointment.
On February 12, 2003, the New Power Parties filed a Second Amended
Chapter 11 Plan (the "Second Amended Plan"). That same day the New Power
Bankruptcy Court confirmed the Second Amended Plan solely as this plan related
to New Power and continued the confirmation hearing with respect to Holdings
and TNPC.
On February 28, 2003, the New Power Bankruptcy Court entered an order
confirming the Second Amended Plan with respect to New Power, On August 15,
2003, the New Power Bankruptcy Court entered an order confirming the Second
Amended Plan with respect to Holdings and TNPC.
2
After the "Effective Date" under the Second Amended Plan, the New Power
Bankruptcy Court entered two separate orders (the "Interim Distribution
Orders") approving interim distributions to holders of equity interests in
Holdings,
Xxx'x entitlement to receive such distributions was disputed by the
Examiner, and, pursuant to the Interim Distribution Orders, such distributions
were placed in a reserve account ("Reserve Account") pending resolution of
such dispute.
During the course of the New Power Bankruptcy Case, the Examiner
conducted his investigation relating to Xxx and filed an objection to the
allowance of the Xxx Shares.
The parties wish to avoid the risks and expenses attendant to the
litigation and disputes among them, without anyone admitting fault, liability
or wrongdoing, and to settle, once and forever, the rights, claims and demands
which one has against or may have against the other as set forth in this
Agreement.
NOW, THEREFORE, for and in consideration of TEN DOLLARS ($10.00) in hand
paid each to the other, the mutual covenants contained in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
1. Definitions. In addition to the terms defined elsewhere in the
Agreement, any capitalized terms shall have the meanings ascribed to them as
set forth below:
Approval Order shall mean an Order entered by the New Power Bankruptcy
Court in the New Power Bankruptcy Case in substantially the form of
Exhibit A, attached hereto, approving this Agreement after such notice
to creditors and other parties in interest and a hearing as deemed
appropriate by the New Power Bankruptcy Court.
Bankruptcy Code shall mean Title 11 of the United States Code, as now in
effect and as hereafter amended to the extent such amendments are
applicable to the New Power Bankruptcy Case.
Bankruptcy Rules shall mean the Federal Rules of Bankruptcy Procedure
and the local rules of the New Power Bankruptcy Court, as now in effect
or as hereafter amended to the extent such amendments apply to the New
Power Bankruptcy Case.
Certificates shall mean each and every certificate evidencing the Xxx
Shares.
Claim shall have the meaning set forth in Section 101(5) of the
Bankruptcy Code.
Confirmation Orders shall mean the Orders entered February 28, 2003 and
August 15, 2003 by the New Power Bankruptcy Court confirming the Second
Amended Plan.
3
Effective Date shall mean the date on which the condition to this
Agreement set forth in Section 2 hereto is satisfied.
Final Order shall mean an order of a court after which the time to
appeal, petition for certiorari, or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari, or any other
proceedings for reargument or rehearing shall then be pending or, as to
which any right to appeal, petition for certiorari, reargue, or rehear
shall have been waived in writing in form and substance satisfactory to
the parties or, in the event that an appeal, writ of certiorari, or
reargument or rehearing thereof has been sought, such order shall have
been determined by the highest court to which such order was appealed,
or certiorari, reargument or rehearing shall have been denied and the
time to take any further appeal, petition for certiorari or move for
reargument or rehearing shall have expired; provided, however, that the
possibility that a motion under Rule 59 or Mule 60 of the Federal Rules
of Civil Procedure, or any comparable rule under the Bankruptcy Rules,
may be filed with respect to such order shall not cause such order not
to be a Final Order.
Interest shall mean the rights of an equity owner of Holdings in
whatever form, including common stock, preferred stock and any warrants,
options or other rights to purchase, sell or subscribe to Holdings
common or preferred stock.
Person shall mean any individual, partnership, corporation, limited
liability company, limited liability partnership, joint venture, trust,
or unincorporated organization or association, any "doing business as"
entity, any other form of business or commercial entity, or a government
or any governmental agency or political subdivision.
2. Condition to Settlement. Except as otherwise stated herein,
notwithstanding the parties' execution and delivery of this Agreement, the
Agreement shall not be effective and shall not be binding upon any of the
parties unless and until the Approval Order becomes a Final Order.
3. Xxx Settlement. By no later than ten (10) days after the Approval
Order becomes a Final Order, Holdings shall disburse to Xxx the amount of
$500,000 (the "Settlement Payment") out of the Reserve Account in full and
complete satisfaction of any claim against, interest in or entitlement to
distribution from any of the New Power Parties, their respective estates, or
the Reserve Account. The Settlement Payment shall be delivered pursuant to the
wire instructions contained in Schedule I attached hereto, Subject to and
conditioned upon receipt by Xxx of the Settlement Payment, Xxx hereby assigns,
transfers and conveys all right, title and interest in and to the Certificates
and the Xxx Shares to Holdings. Xxx hereby agrees that in the event she
obtains possession of the Certificates, she will promptly deliver the
Certificates to the Examiner. Xxx agrees to execute such other and further
agreements and documents necessary for the purpose of assigning, transferring
and conveying her right, title and interest in and to the Certificates and the
Xxx Shares to Holdings, including a power of attorney to transfer stock. As of
the date hereof and as of the time of the execution and delivery of this
Agreement by each party, Xxx represents and warrants to the Examiner, as an
inducement for the Examiner to enter
4
into this Agreement, that she is the sole owner of the Certificates and Xxx
Shares, that she has not assigned or transferred, or purported to assign or
transfer, voluntarily or involuntarily, or by operation of law, the
Certificates or Xxx Shares and that such Certificates and Xxx Shares are not
subject to any encumbrances, claim, lien or interest in favor of a third
party. Xxx further agrees to indemnify and hold harmless the Examiner and the
New Power Parties from any and all Claims arising out of or related to the
breach of any representation or warranty of Xxx contained herein or any breach
of this Agreement by Xxx not cured in accordance with Section 6 of this
Agreement.
4. Release by Examiner of Xxx Released Persons. As a further material
inducement to Xxx entering into this Agreement, but excepting any obligations
imposed upon her by this Agreement, and effective only upon the Effective Date
and receipt by Xxx of the Settlement Payment, the Examiner, on behalf of
himself and each of his agents, representatives, successors and assigns and
all other Persons claiming by, through or under the Examiner, including each
of the New Power Parties, hereby REMISES, ACQUITS AND FOREVER DISCHARGES Xxx
and her attorneys, insurers, employees, agents, representatives, heirs, and
assigns (collectively, the "Xxx Released Persons") of and from all manner of
Claims which the Examiner ever had, now has, or claims to have, either
directly or indirectly, in whole or in part, against any of the Xxx Released
Persons related to or arising out of the Xxx Shares or the New Power
Bankruptcy Case, The Examiner hereby covenants that he will not xxx any of the
Xxx Released Persons for, or raise in any way against any of the Xxx Released
Persons, any such Claims; provided, however, that nothing in this section is
intended, or shall be deemed, to release (i) any Claim arising from a breach
of this Agreement by Xxx; or (ii) any Claim the-Examiner or the New Power
Parties may have against any Person other than the Xxx Released Persons.
5. Release by Xxx. As a further material inducement to the Examiner
entering into this Agreement, but excepting any obligations imposed upon him
by this Agreement, and effective only upon the Effective Date and receipt by
Xxx of the Settlement Payment, Xxx, on behalf of herself and her agents,
heirs, representatives, successors and assigns and all other Persons claiming
by, through or under Xxx, hereby REMISES, ACQUITS AND FOREVER DISCHARGES each
of the New Power Parties and the Examiner and their respective officers,
directors, members, attorneys, insurers, partners, employees, agents,
representatives, successors and assigns (collectively, the "New Power/Examiner
Released Persons"), of and from all manner of Claims which Xxx ever had, now
has, or claims to have, either directly or indirectly, in whole or in part,
against any of the New Power/Examiner Released Persons related to or arising
out of the Xxx Shares or the New Power Bankruptcy Case, and Xxx hereby
covenants that she will not xxx any of the New Power/Examiner Released Persons
for, or raise in any way against any of the New Power/Examiner Released
Persons, any such Claims; provided, however, that nothing in this section is
intended, or shall be deemed, to release (i) any Claim arising from a breach
of this Agreement by any of the New Power/Examiner Released Persons; (ii) any
Claim Xxx may have against Pai; or (iii) any Claim Xxx may have against any
Person other than the New Power/Examiner Released Persons.
6. Opportunity to Cure. Upon a breach of this Agreement by any party
hereto (the "Defaulting Party"), any other party may send a written notice of
such breach to the Defaulting Party and shall send a copy of such notice to
each other party to this Agreement, all in accordance with Section 10 of this
Agreement. The Defaulting Party shall have ten (10) days
5
from his or her receipt of such notice to cure the breach. If the Defaulting
Party fails to cure his or her breach within such 10-day period, the other
party may exercise any and all remedies available to them under applicable law
on account of such breach.
7. Effectiveness or Releases. The releases of Claims in Sections 4 and 5
of this Agreement are intended to be mutual, and notwithstanding anything to
the contrary set forth in this Agreement, no release by one party (the
"Releasing Party") of any Claims shall be effective and enforceable as to
another party until the release by such other party of any Claims against the
Releasing Party is effective and enforceable.
8. Effectiveness of Agreement. In the event that the condition set forth
in Section 2 fails to be satisfied, no provision of this Agreement, including
the releases set forth in Sections 4 and 5, shall be of any force or effect,
9. Reservations. Nothing in this Agreement is intended, or shall be
construed, to release or waive any Claim the Examiner may be authorized to
investigate or assert under the Examiner Order against any Person other than
the Xxx Released Persons, and the Examiner expressly reserves all rights;
remedies, objections, powers and Claims against any Person other than the Xxx
Released Persons. Nothing in this Agreement is intended, or shall be
construed, to release or waive any Claim Xxx may have against any Person other
than the New Power/Examiner Released Persons, and Xxx expressly reserves all
rights, remedies, objections, powers and Claims against any Person other than
the New Power/Examiner Released Persons.
10. Notices. All notices, requests and demands to or upon a party shall
be in writing and sent by certified mail, return receipt requested, personal
delivery against receipt or by. telecopier or other facsimile transmission
and, unless otherwise expressly provided herein, shall be deemed to have been
validly served, given or delivered when delivered against receipt or three
business day after deposit in the United States mail, postage pre-paid, or in
the case of facsimile transmission, when received at the office of the noticed
party, addressed as follows:
If to Examiner: Xxxxx X. Xxxxxx, XX, Esq.
Xxxxxx Xxxxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx Xxxxxx
500 Marquis Xxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
With a copy to; Xxxx X. Xxxxxx, Xx., Esq,
Xxxxxx Xxxxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx Xxxxxx
1500 Marquis Xxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
If to Xxx: Xx. Xxxxx Xxx
0000 Xxxxx Xxxxx, #00
Xxxxxxx, Xxxxx 00000-0000
6
With a copy to: Xxxx X. Xxxxxxxxx, Esq.
Xxxxxx & Xxxxxx PLLC Suite 800
1170 Peachtree Road, N.E.
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
And a copy to: Xxxxxx Xxxx, Esq.
Xxxx Xxxxx & Xxxx, L.L.P.
0000 Xxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Any party may change the address at which that party shall receive notice or
the name of the person receiving a copy of such notice by furnishing the other
parties ,a change of address or change of person receiving copies of notice in
the manner set forth herein for the giving of notices. A notice of change of
address or change of person receiving copies shall become effective ten (10)
days after delivery:
11. Court Approval of Agreement. The parties shall cooperate in filing a
motion in the New Power Bankruptcy Case seeking approval of this Agreement
promptly but in no event later than ten (10) days from the date hereof,
12. No Admission of Liability. This Agreement shall not in any way be
construed as an admission by any party of any acts of misconduct whatsoever
against another party or any other Person, and all parties specifically
disclaim any liability to another party or any other Person, except as
otherwise stated herein. Neither this Agreement nor any action taken pursuant
to this Agreement shall be offered or received in evidence in any action or
proceeding as an admission of liability or wrongdoing of any nature on the
part of any party. The parties specifically acknowledge and agree that this
Agreement is made to compromise and settle the parties' respective rights,
defenses and Claims and that this Agreement cannot be introduced into evidence
in any action or proceeding filed in any court, or in any arbitration or other
administrative proceeding, except to enforce the terms of the Agreement or to
advise a court or judicial or administrative other tribunal, arbitrator or
mediator of the reason for any delay in asserting Claims. Neither this
Agreement nor any action taken pursuant hereto shall be construed in any way
to be a waiver by any party of any legal or constitutional right or privilege
except as stated in this Agreement.
13. Authority. Each of the parties represents and warrants to the others
that he or she has full power and authority to enter into this Agreement,
subject to approval of the New Power Bankruptcy Court, and that the Agreement,
once executed and delivered by each party and approved by a Final Order of the
New Power Bankruptcy Court, will be a valid and binding obligation of that
party enforceable against him or her in accordance with the Agreement's terms.
14. Certain Representations and Warranties. Each of the parties
represents and warrants to the others, as an inducement for the others to
enter into this Agreement, that:
7
a. Such party has read and understands all of the terms and conditions
set forth in this Agreement;
b. Such party has had the benefit of legal counsel of his or her
choosing in deciding to execute this Agreement;
c. Such party, without promise of benefit other than as set forth
herein, is voluntarily entering into this settlement;
d. Such party is the owner of all Claims to be released by him or her
herein, has not assigned or transferred, or purported to assign or transfer,
voluntarily or involuntarily, or by operation of law, any of the Claims
released by him or her hereunder or any portion thereof, and will indemnify
and hold harmless the others from any and all Claims so assigned or
transferred in breach hereof;
e. There is good and valid consideration to support such party's
entering into this Agreement and to bind such party by the terms and
conditions of this Agreement;
f. Such party was not coerced, threatened or otherwise forced to sign
this Agreement, and his or her signature appearing hereinafter is voluntary
and genuine and was duly and validly authorized and given; and
g. In deciding to enter into this Agreement, such party has conducted
his or her own investigation and due diligence with respect to the Xxx Shares
and the Examiner's objection to the allowance of the Xxx Shares and has made
his or her decision based upon such investigation and due diligence and,
except as expressly stated herein, has not relied upon or been induced by any
statement or representation made by the other party, including, without
limitation, any statement or representation set forth in the Recitals to this
Agreement.
15. Parties to Bear Own Costs. Except as stated in this Agreement, each
party to this Agreement shall bear his or her own coats (including attorneys'
fees) incurred in connection with the negotiation, preparation and execution
of this Agreement and any other agreements or instruments executed in
accordance with the terms of this Agreement.
16. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same agreement, and the signature pages from any
counterpart may be appended to any other counterpart to assemble
fully-executed counterparts. Counterparts of this Agreement also may be
exchanged via electronic facsimile machines, and an electronic facsimile of
any party's signature shall be deemed to be an original signature for all
purposes.
17. Entire Agreement. This Agreement sets forth all of the promises,
covenants, agreements, conditions and understandings between the parties with
respect to the subject matter hereof and supercedes all prior and
contemporaneous agreements, understandings, inducements or conditions, express
or implied. Each party specifically warrants that this Agreement is executed
without reliance upon any statement or representation by any other party
hereto, except as expressly stated herein.
8
18. Amendment. The terms of this Agreement shall not be altered,
amended, modified or otherwise changed in any respect except by a writing duly
executed by all the parties hereto and approved, if necessary or appropriate,
by the New Power Bankruptcy Court.
19. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
20. Binding Agreement. This Agreement shall be binding upon the parties,
and their respective representatives, successors and assigns, and shall
similarly inure to the benefit of their respective representatives, successors
and assigns.
21. No Third-Party Beneficiaries. No Person other than the parties
hereto and their respective successors, assigns and representatives and any
other Person identified or referred to in Sections 3, 4 and 5 of this
Agreement, and only as to those Sections, is intended to be a beneficiary of
this Agreement.
22. Construction. Should any provision of this Agreement require
interpretation, the parties agree that the judicial body or arbitration forum
interpreting or construing such provision shall not apply any assumption that
the terms of this Agreement shall be more strictly construed against any party
because of the rule of construction that an instrument is to be construed more
strictly against the drafting party, each party hereby acknowledging and
agreeing that all parties and their respective agents have participated in the
preparation of this Agreement.
23. Section Headings; References; Gender and Number. The titles of the
Sections herein have been inserted as a matter of convenience and for
reference only and shall not control or affect the meaning or construction of
any of the terms of the provisions herein. Whenever reference is made in this
Agreement to any Section, such reference shall be deemed to apply to the
specified Section of this Agreement. Words of any gender used in this
Agreement shall be deemed to include the other gender or the neuter, and words
in the singular shall be deemed to include the plural and the plural to
include the singular when the sense requires.
24. Governing Law. This Agreement shall be construed under and governed
by the internal laws of the State of Georgia.
25. No Waiver. No failure of a party to notify the other party of any
default shall prejudice any remedy for any subsequent defaults. No failure of
a party to insist cm strict compliance by another party with his or her
obligations under this Agreement and no custom or practice of the parties in
variance with the terms of this Agreement shall constitute a waiver of the
party's right to demand exact compliance with the Agreement's terms. Any
waiver by a party of a default shall be limited to the particular instance and
shall not operate or be deemed to waive any further default.
9
IN WITNESS WHEREOF, the parties have set their hands and seals, or their
appropriate officer or agent has executed this Agreement, on the date first
written above.
/s/ Xxxxx X. Xxxxxx, XX
--------------------------------------------
XXXXX X. XXXXXX, XX
Court-Approved Examiner of NewPower
Holdings, Inc. and TNPC Holdings, Inc.
/s/ Xxxxx Xxx
--------------------------------------------
XXXXX XXX
10