On November 20, 2004, the Court entered the Final Judgment and Order of Dismissal with Prejudice, signed by U.S. District Judge Charles L. Brieant. The settlement with the defendants, the Underwriter defendants, was approved and the case closed.

According to a law firm’s website, on September 13, 2004, the Court endorsed a Stipulation and Agreement of Settlement providing for a $15,000,000 settlement with the Underwriter Defendants and preliminarily approved the final settlement. The settlement is still subject to final judicial approval. A settlement fairness hearing will be held on November 30, 2004.

In a press release dated May 04, 2004, the Company announced that the United States District Court for the Southern District of New York (the "District Court") and the United States Bankruptcy Court for the Northern District of Georgia, Newnan Division (the "Bankruptcy Court") approved the settlement agreement with respect to claims against its former directors in consolidated actions that were pending in the District Court, No. 02 Civ. 1550 (CLB) (the "Securities Litigation"), and identical purported claims against the Company (the "Proofs of Claim") filed in the jointly-administered bankruptcy cases that were pending in the Bankruptcy Court entitled In re The NewPower Company, Case No. 02-10835, In re NewPower Holdings, Inc., Case No. 02-10836, and In re TNPC Holdings, Inc., Case No. 02-10837, respectively. The Bankruptcy Court approved the settlement agreement on March 9, 2004, and the District Court entered a judgment approving the settlement agreement on April 29, 2004. Pursuant to the settlement agreement, plaintiffs in the Securities Litigation and claimants in the Proofs of Claim agreed to resolve all their claims against the Company and its former directors in exchange for a payment of $26 million, of which $24.5 million will be paid by insurance providers and $1.5 million will be paid by the Company. Neither the Company nor any of the former directors named as defendants in the Securities Litigation have admitted any liability or wrongdoing.

Additional cases were filed on behalf of investors. On April 25, 2002, the various cases were consolidated. The consolidated caption and index number are In re NewPower Holdings Securities Litigation and 02-cv-1550 (CLB). On April 29, 2002, motions were made to appoint lead plaintiff and counsel. Lead plaintiff and counsel were appointed on June 7, 2002. Plaintiffs filed a consolidated class action complaint on July 31, 2002. Defendants filed motions to dismiss in December 2002. Plaintiffs filed their opposition on February 14, 2003. Defendants filed reply motions in March 2003. On April 17, 2003, the Court denied both pending motions to dismiss.

The original complaint alleges that the Registration Statement and Prospectus for NewPower's public offering on October 5, 2000 was false and misleading in several ways, including misrepresentations and omissions concerning the adequacy of risk management systems put in place in conjunction with NewPower affiliate, Enron Energy Services, Inc. (``EES''), and the true nature and purpose of certain related party transactions, including transactions pursuant to which Enron attempted to hedge its investment in NewPower through use of a partnership known as ``Raptor III'', which was conceived and designed by Enron CFO Andrew Fastow. Claims regarding these misrepresentations and omissions have been asserted under Section 11 of the Securities Act against the underwriters of the October 5, 2000 initial public offering and against those persons who were directors (or about to become directors) of NewPower at the time of that offering, including NewPower's top executives, CEO H. Eugene Lockhart! , Chairman Lou L. Pai and CFO William I. Jacobs. The Complaint also alleges claims against certain of these same defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between October 5, 2000 and December 5, 2001. The complaint alleges in this regard that NewPower Holdings and certain of its officers and directors misrepresented or failed to disclose: (i) that the Company had not adopted effective and appropriate hedging strategies against volatility of commodity prices; (ii) that the Company was on course to achieve its financial goals and had sufficient liquidity to do so; and (iii) that certain forward contracts with EES posed little risk of loss when in truth and in fact they were driving the Company toward insolvency, and were largely structured to protect and enrich Enron, NewPower's controlling shareholder.