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 RUFUS T.
DORSEY, IV
(the "Examiner"), Court-approved Examiner for New Power Holdings,
Inc. and
TNPC Holdings, Inc., and LOU L. PAI ("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, 2000, EMW 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
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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 Lanna Pai, his
former wife, who is now known as Lanna Lee, 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:
2
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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
3
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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 & Dobbs LLP Trust
Account Number: 00000-010-2245
Reference: RTD-New Power
Bank Contact: Lisa W. Keller - 404-264-2842 fax 404-264-2843
Email Address for Payment Notification: klc@phrd.com
4. Release
by Examiner of Pal Rele
