SETTLEMENT AGREEMENT AND RELEASERelease Agreement |
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Exhibit 10.3
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the “Agreement”) is entered into as of January 31, 2005, by and between New England Power Company (“NEP”), USGen New England, Inc. (“USGenNE”), and Taunton Municipal Lighting Plant (“TMLP”). NEP, USGenNE, and TMLP are sometimes referred to herein individually as “Party” or collectively as “the Parties”.
WHEREAS, NEP and TMLP are parties to a System Power Sales Agreement dated as of November 10, 1993 (the “PSA”);
WHEREAS USGenNE is agent to NEP in connection with the PSA;
WHEREAS, NEP filed suit against TMLP in New England Power Co. v. Taunton Municipal Lighting Plant, Civil Action No. 02-4691 BLS (Judge van Gestel) (the “Superior Court Action”);
WHEREAS TMLP has been placing sums in escrow that represent the disputed amounts under the PSA (the “Escrowed Funds”);
WHEREAS, TMLP filed counterclaims against NEP in the Superior Court Action;
WHEREAS, NEP and TMLP desire to terminate the PSA in accordance with this Agreement;
WHEREAS, NEP and TMLP wish to avoid the continued costs of litigation and to resolve all claims amicably between and among themselves; and
WHEREAS, on July 8, 2003, USGenNE filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Greenbelt Division (the “Bankruptcy Court”), Case No. 03-30465(PM) (the “USGenNE Bankruptcy”);
NOW, THEREFORE, in consideration of these premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
- This Agreement is subject to approval by the Bankruptcy Court in which the
USGenNE Bankruptcy is pending. USGenNE shall file a motion with the Bankruptcy
Court to approve this Agreement (the “Approval Motion”) within two
(2) business days after the Parties execute this Agreement. The “Approval
Date” shall mean (i) if any objection to the Approval Motion is filed, the
date on which an order of the Bankruptcy Court approving this Agreement has
become a final, non-appealable judicial order (unless the Parties waive in
writing the requirement that such order be final and non-appealable, in which
case the Approval Date will be the date on which the Bankruptcy Court entered
the order approving the Approval Motion) or (ii) if no objection to the Approval
Motion is filed, the date on which the Bankruptcy Court enters the order
approving the Approval Motion.
- Notwithstanding anything contained in this Agreement to the contrary, this
Agreement shall terminate automatically if a final non-appealable order denying
the Approval Motion is entered by the Bankruptcy Court. In the event of such
termination, all obligations under this Agreement shall be terminated and of no
further force or effect without further action by any Party hereto and without
liability of any Party hereto to the others.
- In the event of termination of this Agreement pursuant to Section 2 hereof,
no rights or obligations, nor any claims or defenses, of the Parties existing
prior to the execution of this Agreement will be prejudiced, compromised,
discharged or otherwise affected in any way, and shall exist as if this
Agreement had never been executed, and neither this Agreement, nor any draft
hereof, any communications among the Parties with respect to this Agreement nor
the subject matter hereof shall be admissible in evidence or in any way used,
described or discussed in any future proceeding.
- Effective as of 11:59 p.m. on the third business day after the Approval
Date, the Parties agree that the PSA and the Parties’ respective rights,
benefits and obligations thereunder shall be terminated (the “PSA
Termination Date”). Other than as set forth in this Agreement, the
Parties shall have no further rights or obligations between and among themselves
arising under or relating in any way whatsoever to the PSA; provided, however,
that the PSA shall continue in effect after the Approval Date but only to the
extent necessary to provide for final accountings, final billing, and payments.
- TMLP represents that there are currently in excess of two million dollars in
the Escrowed Funds and that TMLP will not disburse any of the Escrowed Funds
except in accordance with this Agreement.
- USGenNE shall promptly notify TMLP of the Approval Date. Notice shall be
made by email to Kenneth Barna, Esquire at “kbarna@rubinrudman.com”
and by telefacsimile and by US Mail addressed to Kenneth Barna, Rubin and Rudman
LLP, 50 Rowes Wharf, Boston, MA 02110 (Fax) (617)439-9556.. Within 3 business
days of the Approval Date, TMLP shall pay to USGenNE from the Escrowed Funds the
sum of two million dollars (the “Termination Payment”). The
Termination Payment shall be made by wire to USGenNE or by cashier’s check
payable to USGen New England Inc. and delivered to Robert S. Sanoff, Foley Hoag
LLP, 155 Seaport Boulevard, Boston, MA 02210. Upon payment of the Termination
Payment, TMLP shall have the right to disburse the remaining Escrowed Funds in
its sole discretion.
- Contemporaneous with the execution of the Agreement, NEP and TMLP shall
jointly move to stay the Superior Court Action pending resolution of the
Approval Motion.
- USGenNE, as agent to NEP, agrees that it will continue to deliver capacity,
energy, and other ancillary products to TMLP as required under the PSA until the
PSA is terminated in accordance with the provisions of this Agreement.
- TMLP agrees that it will pay to USGenNE in the ordinary course the then market value for all
