Exhibit 99.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASES
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASES (the "Agreement") is made
and entered into this 29th day of January, 2007, among XXXXX X. XXXXXX, XX
(the "Examiner"), Court-approved Examiner for New Power Holdings, Inc. and
TNPC Holdings, Inc., and XXX X. XXX ("Pai"), an individual residing in Sugar
Land, Texas.
RECITALS
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. Holdings and TNPC are holding companies,
while New Power was an operating company.
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. EMW originally was a wholly-owned
subsidiary of Enron Energy Services, L.L.C.
When EMW was formed in November, 1999, Pai became the Chairman of the
EMW (later to become Holdings) Board of Directors. In September, 2001, Pai
resigned as Chairman of the Board and, in February, 2002, resigned from the
Holdings Board entirely.
During the period from January, 2000 through November, 0000, XXX and its
immediate successor, TNPC, Inc., conducted two (2) private offerings and one
(1) public offering of common stock and warrants. 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.
In July, 2000, Pai received 2,064,400 shares of EMW stock. Pai
subsequently acquired additional shares of TNPC, Inc. and then Holdings stock.
On December 2, 2001 (the "Enron Petition Date"), Enron and its
affiliates (collectively, the "Enron Parties") filed voluntary petitions for
relief under Chapter l1 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York (the "Enron Bankruptcy Court"),
styled as In re Enron Corp., et al., Case No. 01-16034 (MG) (the "Enron
Bankruptcy Case"). At the time the Enron Bankruptcy Case was filed, the New
Power Parties were actively seeking a purchaser or third party investor and
were continuing to operate their business. The Enron Bankruptcy Case is still
pending.
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 In 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 Xxxxx Xxx, his
former wife, who is now known as Xxxxx Xxx, 1,032,000 of the shares in
Holdings which he initially received from EMW, leaving him with the remaining
original shares of 1,032,400 as of the New Power Petition Date plus other
acquired shares.
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. Among other things, the Examiner Order
directs the Examiner to investigate, file and take any appropriate action with
respect to certain issues relating to Pai, including, without limitation, any
equity interests in Holdings issued to Pai.
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.
After the effective date of the Second Amended Plan, Pai sold in the
market all his remaining shares in Holdings and no longer asserts any Interest
in Holdings.
During the course of the New Power Bankruptcy Case, the Examiner has
conducted his investigation relating to Pai and entered into negotiations with
Pai's counsel regarding certain disputes and issues arising out of the
investigation.
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 any one has against or may have against another 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:
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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.
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.
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 Rule 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
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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 is entered, and the Approval Order
becomes a Final Order.
3. Pai Settlement Payment. By no later than ten (10) days after the
Effective Date, Pai shall pay to the Examiner in immediately available funds
the amount of $400,000. The funds shall be sent to the Examiner in accordance
with the following wire transfer instructions:
Bank Name: Bank of America, N.A.
Branch: Atlanta, Georgia, United States
Bank 9-Digit ABA or Routing Number: 026-00-9593
Account Name: Parker, Hudson, Rainer & Xxxxx LLP Trust
Account Number: 00000-000-0000
Reference: RTD-New Power
Bank Contact: Xxxx X. Xxxxxx - 000-000-0000 fax 000-000-0000
Email Address for Payment Notification: xxx@xxxx.xxx
4. Release by Examiner of Pal Released Persons. As a further material
inducement to Pai entering into this Agreement, but excepting any obligations
imposed upon him by this Agreement, and effective only upon the Examiner's
receipt of payment in accordance with Section 3 above, 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, hereby REMISE,
ACQUIT AND FOREVER DISCHARGE Pai and his attorneys, insurers, employees,
agents, representatives, heirs, and assigns with the exception of Xxxxx Xxx
(collectively, the "Pal 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 Pai Released Persons
related to or arising out of the Chapter 11 Cases. The Examiner hereby
covenants that he will not xxx any of the Pai Released Persons for, or raise
in any way against any of the Pai Released Persons, any such Claims; provided,
however, that nothing in this section is intended, or shall be deemed, to
release (1) any Claim arising from a breach of this Agreement by Pai; or (ii)
any Claim the Examiner may have against Xxxxx Xxx, including, without
limitation, the pending objection filed by the Examiner to the equity
interests asserted by Xxxxx Xxx (the "Xxx Interests") and the Claim directed
against the funds held in reserve by the New Power Parties in connection with
the Xxx Interests, or any Person other than the Pai Released Persons or any
Interest asserted by Xxxxx Xxx or such other Persons.
5. Release by Pai. As a further material inducement to the New Power
Parties and the Examiner entering into this Agreement, but excepting any
obligations imposed upon any of such parties by this Agreement, and effective
only upon the Examiner's receipt of payment in accordance with Section 3
above, Pai, on behalf of himself and his agents, heirs, representatives,
successors and assigns and all other Persons claiming by, through or under
Pai, hereby REMISES, ACQUITS AND FOREVER DISCHARGES each of the New Power
Parties and the Examiner and their respective officers, directors, members,
attorneys, insurers, partners,
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employees, agents, representatives, successors and assigns (collectively, the
"New Power/Examiner Released Persons"), of and from all manner of Claims which
Pai 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 Chapter 11 Cases, and Pai hereby covenants
that he 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; or (ii) any Claim
Pai 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 from its receipt of
such notice to cure the breach. If the Defaulting Party fails to cure its
breach within such 10-day period, the other parties may exercise any and all
remedies available to them under applicable law on account of such breach.
7. Effectiveness of 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. Examiner Reservation. 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 Xxxxx Xxx or any Person
other than the Pai Released Persons, and the Examiner expressly reserves all
rights, remedies, objections, powers and Claims against Xxxxx Xxx and any
Person other than the Pai 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 one
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 XXX
000 Xxxxxxxxx Xxxxxx Xxxxxx
0000 Xxxxxxx Xxx Xxxxx
0
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 Pai: Xx. Xxx X. Xxx
00 Xxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
With a copy to: Xxxxx X. Xxxxxxxxx, Esq
Xxxxxxxxx Xxxxxxx LLP Suite 1000
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
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.
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13. Authority. Each of the parties represents and warrants to the others
that it or he 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, will be a valid and binding obligation of that
party enforceable against it 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:
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 its own
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 it
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 it 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; and
f. Such party was not coerced, threatened or otherwise forced to
sign this Agreement, and its signature appearing hereinafter is
voluntary and genuine and was duly and validly authorized and given.
15. Parties to Bear Own Costs. Except as stated in this Agreement, each
party to this Agreement shall bear its own costs (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
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executed without reliance upon any statement or representation by any other
party hereto, except as expressly stated herein.
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 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 on strict compliance by another party with its 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
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default shall be limited to the particular instance and shall not operate or be
deemed to waive any further default.
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
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XXXXX X. XXXXXX, XX
Court-Approved Examiner of New Power
Holdings, Inc. and TNPC Holdings, Inc.
/s/ Xxx X. Xxx
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XXX X. XXX
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