Exhibit 10.1

 

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

In consideration of the terms set forth herein, the Parties hereinafter
identified agree, as of the date all the Parties have executed this Settlement
Agreement and Mutual Release (“Settlement Agreement”), as follows:

 

1.0                               Parties to the Settlement Agreement:  This
Settlement Agreement is entered into by and among EnBW Energy Solutions GmbH,
ENVICA Kat GmbH, E&EC Energy & Environmental Consultants GmbH, SCR-Tech GmbH,
SCR-Tech LLC, CESI-SCR, Inc., Catalytica Energy Systems, Inc., ENVICA GmbH,
CESI-Tech Technologies, Inc., Hans-Ulrich Hartenstein, and Brigitte Hartenstein
(the “Hartensteins”).  Each aforementioned entity or person is referred to
herein individually as a “Party” and collectively as the “Parties.”

 

2.0                               Recitals:

 

2.1                               In March 2001, ENVICA Kat, GmbH (“ENVICA”), a
German corporation that developed SCR catalyst regeneration processes, and
Energy & Environment Consultants GmbH (“E&EC”), a German consulting company,
formed SCR-Tech GmbH in Germany for marketing SCR catalyst regeneration
technologies process worldwide.  SCR-Tech GmbH then formed SCR-Tech LLC in
May 2001 for marketing and performing this process in North America.  In
March 2002, EnBW Energy Solutions GmbH (“EnBW”), a German energy company, also
became a shareholder of SCR-Tech GmbH and in 2003 of SCR-Tech LLC.  ENVICA
through SCR-Tech GmbH and EnBW directly granted a license for their individual
U.S. patented SCR catalyst regeneration technologies (“IP Rights”) to SCR-Tech
LLC for its use in North America. 

 

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2.2                               Hans Hartenstein was selected to serve as
President and Brigitte Hartenstein was selected to serve as Vice President and
Chief Financial Officer of SCR-Tech, LLC and entered into employment agreements
on or about December 31, 2001.

 

2.3                               WHEREAS, CESI-SCR, Inc. and its parent
company, Catalytica Energy Systems, Inc. (“Catalytica”) entered into a
Membership and Asset Purchase Agreement (‘the MIAPA”) to purchase SCR-Tech LLC
on January 21, 2004 and the IP Rights of ENVICA and EnBW.  Pursuant to the terms
of that purchase and sale, the Hartensteins were required to enter into
amendments of their employment agreements, as well as employee invention and
confidential information agreements, all of which contain various provisions
including non-compete and confidentiality provisions.  There were subsequent
amendments to the employment agreements on or about July 30, 2004.  The
Hartensteins’ employment agreements, amended employment agreements, and employee
invention and confidentiality information agreements, collectively are referred
to herein as the “Hartensteins’ Employment and Confidentiality Agreements.”

 

2.4                               On February 15, 2005, the Hartensteins
notified SCR-Tech LLC of their “good reason” termination of the employment
agreements and the amended employment agreements on the basis that their
authority had been depleted by various business decisions by CESI-SCR, Inc.,
making them ineffective in their roles with SCR-Tech LLC.  On March 18, 2005,
Catalytica and SCR-Tech LLC sent the Hartensteins Notices of Termination, on the
basis they had violated the terms of the employment agreements and the amended
employment agreements.

 

2.5                               Since the terminations referred to in
Section 2.4, CESI-SCR, Inc., neither Catalytica or SCR-Tech LLC has paid any
monies to SCR-Tech GmbH, ENVICA, EnBW, or the Hartensteins, although payments
have been demanded.

 

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2.6                               The Parties agree that it would be in the
interest of all Parties to resolve their differences and to settle and
compromise all claims that they have or may have against one another.

 

3.0                               Settlement Terms

 

3.1                               Settlement Amount:  CESI-SCR, Inc. will pay,
or cause to be paid, to SCR-Tech GmbH the sum of Eight Hundred Fifty Thousand
Dollars ($850,000) and to EnBW Energy Solutions GmbH the sum of Six Hundred
Fifty Thousand Dollars ($650,000) (the “Settlement Amount”), upon the signature
of all Parties to the Settlement Agreement. The signature page of each Party
shall be faxed to Lloyd Winawer of Wilson Sonsini, attorneys for Catalytica, who
shall notify Catalytica when he has received all faxed signatures of the Parties
to this Settlement Agreement.  At that time, Catalytica will wire the entire
Settlement Amount to the accounts designated in writing on Exhibit E.  The
Parties will notify Mr. Winawer of the receipt of the wired monies and at that
time will send the original signature pages to Mr. Winawer by overnight mail.
The Settlement Agreement shall be of no force and effect unless and until the
wired monies are received at the designated accounts as confirmed in writing by
the financial institutions receiving the wires.  If the monies are not wired
within two (2) business days of notification of the receipt of the faxed
signature pages as confirmed in writing by the financial institution sending the
wire, Mr. Winawer shall return the faxed signature pages in his possession of
all Parties (except Catalytica, CESI-SCR, Inc., CESI-Tech Technologies, Inc. and
SCR-Tech, LLC) to counsel for the Hartensteins.  The original signature
pages shall be sent by overnight mail to Mr. Winawer within two (2) business
days of receipt of the wire.  If the wire has been received, but the original
signature pages are not received within four (4) business days after such
receipt, then the Parties agree that the facsimile signature pages shall be
deemed to be original signature pages.  Payment of the Settlement Amount shall
be in full satisfaction of all amounts required to be paid under the MIAPA, and
any agreements relating to the

 

3

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MIAPA (including the Hartensteins’ Employment and Confidentiality Agreements)
whether such amounts presently are due and owing or are to be paid in the
future.

 

3.2                               Mutual Release: 

 

Effective from and after receipt by EnBW and SCR Tech GmbH of the Settlement
Amount, each Party, on behalf of itself and its predecessors, successors,
parents, subsidiaries, affiliates, segments or divisions, present or former
directors, officers, managers, investors, stockholders, employees, and agents,
hereby expressly, fully and forever releases and discharges all other Parties,
including the Parties’ predecessors, successors, parents, subsidiaries,
affiliates, segments or divisions, present or former directors, officers,
managers, investors, stockholders, employees, and agents from  any and all
claims, debts, actions, causes of action, liability, demands, damages, and
losses of whatever kind or nature, in law or in equity, known or unknown,
suspected or unsuspected, that each Party ever had, or now has, against the
other Parties, including all claims arising out of, or related in any respect,
to the MIAPA, and any agreement related to the MIAPA including but not limited
to the Hartensteins’ Employment and Confidentiality Agreements and any and all
amendments. 

 

3.3                               Section 1542 Waiver:  To the extent that the
Parties are waiving “unknown” claims as well as known claims in Section 3.2, the
Parties expressly waive any protection against such waivers, including any law
or provision similar to Section 1542 of the California Civil Code which provides
as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially effected the settlement with the debtor.

 

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3.4                               Compromise of Disputed Claims:  This
Settlement Agreement shall not be considered an admission of liability and/or
responsibility by any of Party herein, each of which continues to deny any and
all liability and disclaims such responsibility.

 

4.0                               Miscellaneous Provisions

 

4.1                               Termination of Obligations Under the MIAPA and
Related Agreements: 

 

Each Party is deemed to have satisfied and performed all of its obligations and
requirements under the MIAPA and related agreements and shall have no remaining
obligations and requirements under the MIAPA and any agreements related to the
MIAPA, including but not limited to the Hartensteins’ Employment and
Confidentiality Agreements and any and all amendments. 

 

4.2                               Exhibits:  ENVICA and Catalytica agree to
enter into the Territory Restriction Agreement included as Exhibit A hereto,
ENVICA and Catalytica agree to enter into the Confidentiality Agreement included
as Exhibit B hereto, EnBW and Catalytica agree to enter into the Confidentiality
Agreements included as Exhibit C hereto, and the Hartensteins and SCR-Tech LLC
agree to enter into the Confidentiality Agreement included as Exhibit D hereto. 
Exhibits A, B, C, and D individually are referred to herein as a “Settlement
Agreement Exhibit” and collectively as the “Settlement Agreement Exhibits.”  No
violation of any Settlement Agreement Exhibit shall constitute a breach by any
Party of the Settlement Agreement.  Liability for a violation or breach of any
Settlement Agreement Exhibit shall be limited to the respective Parties to such
Settlement Agreement Exhibit as follows:  (a) no Party other than ENVICA and
Catalytica shall have any rights, obligations, or liability with respect to the
Settlement Agreement Exhibit attached hereto Exhibit A; (b) no Party other than
Envica and Catalytica shall have any rights, obligations, or liability with
respect to the Settlement Agreement Exhibit attached hereto as Exhibit B; (c) no
Party other than EnBW and Catalytica shall have any rights, obligations, or
liability with respect to the

 

5

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Settlement Agreement Exhibit attached hereto as Exhibit C; and (d) no Party
other than the Hartensteins and SCR-Tech LLC shall have any rights, obligations,
or liability with respect to the Settlement Agreement Exhibit attached hereto as
Exhibit D.

 

4.3 Entire Agreement:  This Settlement Agreement and the Settlement Agreement
Exhibits constitute the entire agreement and understanding among the Parties
with respect to the settlement of claims and other matters set forth herein, and
supersedes and replaces any prior agreements and understandings, whether oral or
written, between and among them, with respect to such matters.

 

4.4                               No Oral Modification:  The Parties understand
and agree that this Settlement Agreement shall not be changed or amended in any
respect, except by a writing executed by all of the Parties hereto or their
authorized representatives.

 

4.5                               Severability:  Any determination of
invalidity, illegality, or unenforceability of any provision of this Settlement
Agreement, as determined by a court of competent jurisdiction, shall not affect
the validity, legality, or enforceability of any other provision.

 

4.6                               Governing Law; Jurisdiction, and Venue: 

 

(a)                                  This Settlement Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.

 

(b)                                 The Parties to this Settlement Agreement
irrevocably consents to the exclusive jurisdiction and venue of any court within
the State of New York, in connection with any matter based upon or arising out
of this Settlement Agreement or the matters contemplated herein, agrees that
process may be served upon them in any manner authorized by the laws of the
State of Delaware

 

6

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for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction, venue and such process.

 

4.7                               Counterparts and Facsimile Signatures:  This
Settlement Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, it being understood that all
Parties need not sign the same counterpart.  This Settlement Agreement may be
executed in whole or in part by facsimile signatures any of which shall be
deemed to be an original signature.

 

4.8                               Signers Authority:  Each individual signing
the Settlement Agreement hereby represents and warrants that the Party on whose
behalf such individual executes this Settlement Agreement has authorized such
individual to execute this Settlement Agreement on such Party’s behalf.

 

4.9                               Assignment:  Each Party hereby represents and
warrants that it has not assigned, conveyed or granted any right, option, or
interest in, or otherwise transferred in any manner whatsoever to any person or
entity, any right, claim, or obligation that is the subject of this Settlement
Agreement.

 

4.10                        Publication:  Each Party acknowledges and agrees
that Catalytica may issue a press release announcing the material terms of this
Settlement Agreement and that a copy of this Settlement Agreement may be
included as an exhibit to future filings by Catalytica with the United States
Securities and Exchange Commission.

 

WHEREFORE, the undersigned, on the dates set forth below, subscribe their hands
to this Settlement Agreement, acknowledge their assent to the terms and
conditions set forth herein, and agree to the foregoing.

 

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CATALYTICA ENERGY SYSTEMS, INC.

 

 

DATE:

December 15, 2005

 

By:

 s/ Rob Zack

 

 

 

 

Title:

President, CEO and CFO

 

 

 

 

 

 

CESI-SCR, INC.

 

 

DATE:

December 15, 2005

 

By:

 s/William J. McMahon

 

 

 

 

Title:

President

 

 

 

 

 

 

ENBW ENERGY SOLUTIONS GMBH

 

 

DATE:

December 16, 2005

 

By:

 s/Werner Goetz

 

 

 

 

Title:

Managing Director

 

 

 

 

 

 

ENVICA KAT GMBH

 

 

DATE:

December 16, 2005

 

By:

 s/Frank Ebinger

 

 

 

 

Title:

Managing Director

 

 

 

 

 

 

ENVICA GMBH

 

 

DATE:

December 16, 2005

 

By:

 s/Frank Ebinger

 

 

 

 

Title:

Managing Director

 

 

 

 

 

 

E&EC ENERGY & ENVIRONMENTAL CONSULTANTS GMBH

 

 

DATE:

December 15, 2005

 

By:

 s/Hans-Ulrich Hartenstein

 

 

 

 

Title:

Managing Director

 

 

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SCR-TECH LLC

 

 

DATE:

December 15, 2005

 

By:

 s/William J. McMahon

 

 

 

 

Title:

President

 

 

 

 

 

 

SCR-TECH GMBH

 

 

 

 

DATE:

December 16, 2005

 

By:

 s/Frank Ebinger

 

 

 

 

Title:

Managing Director

 

 

 

 

 

 

CESI-TECH TECHNOLOGIES, INC.

 

 

DATE:

December 15, 2005

 

By:

 s/William J. McMahon

 

 

 

 

Title:

President

 

 

 

 

 

DATE:

December 15, 2005

 

By:

s/Hans-Ulrich Hartenstein

 

 

 

HANS-ULRICH HARTENSTEIN

 

 

 

 

DATE:

December 15, 2005

 

By:

s/Brigitte Hartenstein

 

 

 

BRIGITTE HARTENSTEIN

 

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EXHIBIT A

 

TERRITORIAL RESTRICTION AGREEMENT BETWEEN

CATALYTICA ENERGY SYSTEMS, INC. AND ENVICA KAT GMBH

 

This Territorial Restriction Agreement (this “Agreement”) is entered into
between Catalytica Energy Systems, Inc. (“Catalytica”) and ENVICA Kat GmbH
(“ENVICA”) (each, a “Party” and together the “Parties”), effective as of the
date of the Settlement Agreement and Mutual Release of which this Agreement is
an Exhibit.

 

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

I.                                         Definitions:

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

A)                                      “AFFILIATE” MEANS ANY DIRECTOR,
EXECUTIVE OFFICER OR MANAGER OF A PARTY AND ANY ENTITY THAT CONTROLS, IS
CONTROLLED BY OR IS UNDER COMMON CONTROL WITH A PARTY, BUT ONLY SO LONG AS SUCH
CONTROL EXISTS.  FOR PURPOSES OF THIS DEFINITION, “CONTROL” WILL MEAN DIRECT OR
INDIRECT OWNERSHIP OF MORE THAN FIFTY PERCENT (50%) OF THE SHARES OF THE
RESPECTIVE ENTITY ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS (OR, IN THE CASE
OF AN ENTITY THAT IS NOT A CORPORATION, FOR THE ELECTION OF THE CORRESPONDING
MANAGING AUTHORITY).

 

B)                                     “BUSINESS” MEANS THE BUSINESS OF (I) THE
CLEANING, TREATMENT AND REGENERATION OF SELECTIVE CATALYTIC REDUCTION (“SCR”)
CATALYST, (II) SCR MANAGEMENT AND SCR CONSULTING SERVICES, (III) RESEARCH AND
DEVELOPMENT OF SCR CATALYST TREATMENT, MANAGEMENT, CLEANING AND REGENERATION,
AND (IV) ALL SCR ACTIVITIES RELATED THERETO.

 

C)                                      “CLOSING DATE” MEANS FEBRUARY 20, 2004.

 

D)                                     “COVERED TECHNOLOGY” MEANS TECHNOLOGY
WHICH RELATE TO THE FOLLOWING STEPS OF THE BUSINESS:

 

•                  Disassembling the modules (if required e.g. in case of some
multi-layer plate or corrugated plate catalyst) and mechanical cleaning (ash
removal and vacuuming, especially in between plate layers);

 

•                  Soaking the catalyst in a water-based solution at a
controlled pH and temperature;

 

•                  Ultrasonic deep cleaning in a water-based solution at a
controlled pH, temperature, agitation, and movement as a preparation for further
treatment and replenishment of active ingredients;

 

•                  Neutralization in a water-based solution at a controlled pH
and temperature;

 

•                  Multi-stage rinsing in DI water at a controlled temperature
and conductivity;

 

•                  Drying the clean catalyst;

 

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•                  Replenishing active ingredients in a concentration- and
temperature-controlled DI water-based solution;

 

•                  Drying the regenerated catalyst; and

 

•                  Final inspection and packaging for shipment.

 

and is based on the transferred intellectual property rights from ENVICA as
listed below:

 

Registered IP transferred by ENVICA

 

No.

 

USA/Canada
application

 

Action
USPTO

 

(1) Title

 

Priority

 

Examin.
request

 

PCT
applic.

DE 198 29 916

 

US: 6,241,826
Can: 2,336,562

 

Patent granted

 

Process for regenerating catalytic converters

 

06.07.1998

 

yes

 

yes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patent ownership in the process of being transferred to ENVICA GmbH.

 

 

 

 

 

 

 

 

 

 

 

 

 

DE 102 41 004.6

 

US: Yes
Can: Yes

 

None

 

Process for the regeneration of iron contaminated denitrifying catalysts

 

05.09.2002

 

yes

 

yes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The earliest possible time for National Phases is May 2004. With international
examination Request further 10 months later.

 

 

 

DE 102 42 081.5

 

US: Yes
Can: Yes

 

None

 

Process for regeneration of denitrifying catalysts contaminated by phosphorus

 

11.09.2002

 

yes

 

yes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The earliest possible time for National Phases is May 2004. With international
examination Request further 10 months later.

 

E)                                      “IMPROVEMENTS” MEANS ALL IMPROVEMENTS,
MODIFICATIONS, ENHANCEMENTS AND REFINEMENTS OF COVERED TECHNOLOGY THAT ARE
DEVELOPED BY OR FOR ANY OF ENVICA OR ITS AFFILIATES WITH THE EXCEPTION OF ALL
“ARBEITNEHMERERFINDUNGEN” ACCORDING TO THE GERMAN “ARBEITNEHMERERFINDUNGSGESETZ”
FOLLOWING THE CLOSING DATE THROUGH DECEMBER 31, 2014.

 

F)                                        “NAFTA TERRITORIES” MEANS THE UNITED
STATES OF AMERICA, CANADA AND MEXICO, AND ANY OTHER MEMBER COUNTRIES OF THE
NORTH AMERICAN FREE TRADE AGREEMENT AS OF CLOSING DATE, AND TERRITORIES AND
POSSESSIONS OF THE FOREGOING WITHIN WHICH THE NORTH AMERICAN FREE TRADE
AGREEMENT APPLIES AS OF THE CLOSING DATE.

 

G)                                     “PERSON” MEANS ANY INDIVIDUAL,
CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY OR ANY OTHER FORM OF
BUSINESS ENTITY.

 

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II.                                     TERRITORIAL RESTRICTIONS FOR COVERED
TECHNOLOGY.

 

A)                                      FROM AND AFTER THE CLOSING DATE,
CATALYTICA SHALL USE, AND SHALL CAUSE EACH OF ITS AFFILIATES TO USE, THE COVERED
TECHNOLOGY SOLELY IN THE NAFTA TERRITORIES AND IN NO OTHER COUNTRY IN THE WORLD,
AND CATALYTICA SHALL NOT LICENSE OR TRANSFER, AND SHALL CAUSE EACH OF ITS
AFFILIATES NOT TO LICENSE OR TRANSFER, TO ANY OTHER PERSON, ANY OF THE COVERED
TECHNOLOGY, EXCEPT IN EACH CASE SOLELY IN THE NAFTA TERRITORIES.  CATALYTICA AND
ITS AFFILIATES SHALL NOT USE ANY CATALYTICA IMPROVEMENTS IN ENVICA’S BUSINESS
OUTSIDE OF THE NAFTA TERRITORIES.  CATALYTICA AND ITS AFFILIATES SHALL NOT USE
THE COVERED TECHNOLOGY FOR REGENERATION OF SCR CATALYSTS THAT TO THE KNOWLEDGE
OF CATALYTICA ARE INTENDED FOR USE OUTSIDE THE NAFTA TERRITORIES.  CATALYTICA
AGREES NOT TO ASSERT AGAINST ENVICA UNDER CATALYTICA’S PATENTS ISSUING ON
CATALYTICA IMPROVEMENTS ANY CLAIM BASED ON ENVICA’S USE OF COVERED TECHNOLOGY IN
THE CONDUCT OF ENVICA’S BUSINESS OUTSIDE OF THE NAFTA TERRITORIES.  CATALYTICA
SHALL BE THE SOLE OWNER OF CATALYTICA IMPROVEMENTS, INCLUDING ALL PATENTS
THERETO.

 

B)                                     FROM AND AFTER THE CLOSING DATE,
CATALYTICA SHALL NOT DISCLOSE, AND SHALL CAUSE EACH OF ITS AFFILIATES NOT TO
DISCLOSE, TO ANY OTHER PERSON, ANY OF THE COVERED TECHNOLOGY, EXCEPT FOR
LICENSING PURPOSES AND FOR DISCLOSURES IN CONNECTION WITH PURSUING PATENT
PROTECTION, IN EACH CASE SOLELY IN THE NAFTA TERRITORIES, AND IN SCIENTIFIC
PUBLICATIONS OR SPEAKING SUBJECT TO ENVICAS’ PRIOR WRITTEN CONSENT (SUCH CONSENT
NOT TO BE UNREASONABLY WITHHELD).  WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, CATALYTICA SHALL, AND SHALL CAUSE EACH OF ITS AFFILIATES TO PROTECT
THE CONFIDENTIALITY OF THE COVERED TECHNOLOGY BY USING THE SAME DEGREE OF CARE
TO PREVENT THE UNAUTHORIZED USE, DISSEMINATION, OR PUBLICATION OF THE COVERED
TECHNOLOGY AS CATALYTICA USES TO PROTECT ITS OTHER CONFIDENTIAL INFORMATION, BUT
NO LESS THAN A REASONABLE DEGREE OF CARE.  CATALYTICA FURTHER AGREES THAT IT
WILL NOT DISCLOSE, AND WILL CAUSE EACH OF ITS AFFILIATES NOT TO DISCLOSE, THE
COVERED TECHNOLOGY TO ANY PERSON, EXCEPT TO ITS EMPLOYEES, CONTRACTORS, OR
AGENTS WHO NEED TO KNOW THE COVERED TECHNOLOGY AND HAVE SIGNED A NON-USE AND
NON-DISCLOSURE AGREEMENT WITH OBLIGATIONS NO LESS STRINGENT THAN THE OBLIGATIONS
OF THIS AGREEMENT PRIOR TO ANY DISCLOSURE OF THE COVERED TECHNOLOGY.  CATALYTICA
AGREES TO PROMPTLY INFORM ENVICA IN WRITING OF ANY DISCLOSURE OF THE COVERED
TECHNOLOGY, WHETHER INTENTIONAL OR NOT, WHICH VIOLATES THE PROVISIONS OF THIS
AGREEMENT.  FURTHER, CATALYTICA SHALL BE RESPONSIBLE AND LIABLE FOR ANY BREACH
OF THIS AGREEMENT BY ANY OF CATALYTICA’S LICENSEES OF THE COVERED TECHNOLOGY. 
CATALYTICA MAY, BUT SHALL HAVE NO OBLIGATION TO, DISCLOSE CATALYTICA
IMPROVEMENTS TO THE ENVICA, INCLUDING COPIES OF INVENTION DISCLOSURES OR PATENT
APPLICATIONS WITH RESPECT TO SUCH CATALYTICA IMPROVEMENTS. 

 

C)                                FROM AND AFTER THE CLOSING DATE, ENVICA SHALL
USE, AND SHALL CAUSE EACH OF ITS AFFILIATES TO USE, THE COVERED TECHNOLOGY
SOLELY OUTSIDE OF THE NAFTA TERRITORIES, AND ENVICA SHALL NOT LICENSE OR
TRANSFER, AND SHALL CAUSE EACH OF ITS AFFILIATES NOT TO LICENSE OR TRANSFER, TO
ANY OTHER PERSON, ANY OF THE COVERED TECHNOLOGY, EXCEPT IN EACH CASE SOLELY
OUTSIDE OF THE NAFTA TERRITORIES.  ENVICA AND THEIR AFFILIATES SHALL NOT USE THE
COVERED TECHNOLOGY FOR REGENERATION OF SCR CATALYSTS THAT TO THE KNOWLEDGE OF
ENVICA ARE INTENDED FOR USE IN THE NAFTA TERRITORIES.  ENVICA AND THEIR
AFFILIATES SHALL USE ANY IMPROVEMENTS SOLELY OUTSIDE OF THE NAFTA TERRITORIES.

 

D)                                     FROM AND AFTER THE CLOSING DATE, ENVICA
SHALL NOT DISCLOSE, AND SHALL CAUSE EACH OF ITS AFFILIATES NOT TO DISCLOSE, TO
ANY OTHER PERSON, ANY OF THE COVERED TECHNOLOGY, EXCEPT FOR

 

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LICENSING PURPOSES AND FOR DISCLOSURES IN CONNECTION WITH PURSUING PATENT
PROTECTION, IN EACH CASE SOLELY OUTSIDE OF THE NAFTA TERRITORIES, AND IN
SCIENTIFIC PUBLICATIONS OR SPEAKING SUBJECT TO CATALYTICA’S PRIOR WRITTEN
CONSENT (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD).  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, ENVICA SHALL, AND SHALL CAUSE EACH OF ITS
RESPECTIVE AFFILIATES TO PROTECT THE CONFIDENTIALITY OF THE COVERED TECHNOLOGY
BY USING THE SAME DEGREE OF CARE TO PREVENT THE UNAUTHORIZED USE, DISSEMINATION,
OR PUBLICATION OF THE COVERED TECHNOLOGY AS SUCH ENVICA USES TO PROTECT ITS
OTHER CONFIDENTIAL INFORMATION, BUT NO LESS THAN A REASONABLE DEGREE OF CARE. 
ENVICA FURTHER AGREES THAT IT WILL NOT DISCLOSE, AND WILL CAUSE EACH OF ITS
AFFILIATES NOT TO DISCLOSE, THE COVERED TECHNOLOGY TO ANY PERSON, EXCEPT TO ITS
EMPLOYEES, CONTRACTORS, OR AGENTS WHO NEED TO KNOW THE COVERED TECHNOLOGY AND
HAVE SIGNED A NON-USE AND NON-DISCLOSURE AGREEMENT WITH OBLIGATIONS NO LESS
STRINGENT THAN THE OBLIGATIONS OF THIS AGREEMENT PRIOR TO ANY DISCLOSURE OF THE
COVERED TECHNOLOGY.   ENVICA AGREES TO PROMPTLY INFORM CATALYTICA IN WRITING OF
DISCLOSURE OF THE COVERED TECHNOLOGY, WHETHER INTENTIONAL OR NOT, WHICH VIOLATES
THE PROVISIONS OF THIS AGREEMENT.  FURTHER, ENVICA SHALL BE RESPONSIBLE AND
LIABLE FOR ANY BREACH OF THIS AGREEMENT BY ANY OF THE ENVICA’ LICENSEES OF THE
COVERED TECHNOLOGY.

 

E)                                      ENVICA ON THE ONE HAND AND THE
CATALYTICA ON THE OTHER HAND ACKNOWLEDGES AND AGREES THAT THE OTHER PARTY WOULD
BE IRREPARABLY DAMAGED IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT
WERE NOT PERFORMED IN ACCORDANCE WITH THE SPECIFIC TERMS OR WERE OTHERWISE
BREACHED.  ACCORDINGLY, ENVICA ON THE ONE HAND AND CATALYTICA ON THE OTHER HAND
AGREE THAT THE OTHER PARTY SHALL BE ENTITLED TO, IN ADDITION TO ANY OTHER
REMEDIES THAT MAY BE AVAILABLE TO SUCH PARTY UPON ANY SUCH VIOLATION, TO ENFORCE
SUCH COVENANTS AND AGREEMENTS BY SPECIFIC PERFORMANCE, INJUNCTION RELIEF OR ANY
OTHER MEANS AVAILABLE TO SUCH PARTY AT LAW OR IN EQUITY TO PREVENT BREACHES OF
THE PROVISIONS OF THIS AGREEMENT.

 

F)                                        IN ALL CASES WITH RESPECT TO COVERED
TECHNOLOGY AND IMPROVEMENTS, ENVICA SHALL RETAIN THE EXCLUSIVE RIGHT TO USE THE
COVERED TECHNOLOGY AND IMPROVEMENTS IN ENVICA’S BUSINESS OUTSIDE OF THE NAFTA
TERRITORIES.

 

g)                                     Neither Catalytica nor ENVICA shall
attempt to directly or indirectly evade the restrictions set forth in this
Article II, whether by sale, exchange, merger or similar transactions.

 

III.                                 MISCELLANEOUS

 

(A)                                  THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT AND UNDERSTANDING AMONG THE PARTIES WITH RESPECT TO THE MATTERS SET
FORTH HEREIN, AND SUPERSEDES AND REPLACES ANY PRIOR AGREEMENTS AND
UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, BETWEEN AND AMONG THEM, WITH RESPECT TO
SUCH MATTERS.

 

(b)                                 The Parties understand and agree that this
Agreement shall not be changed or amended in any respect, except by a writing
executed by all of the Parties hereto or their authorized representatives.

 

(c)                                  Any determination of invalidity,
illegality, or unenforceability of any provision of this Agreement, as
determined by a court of competent jurisdiction, shall not affect the validity,
legality, or enforceability of any other provision.

 

4

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(d)                                 This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

 

(e)                                  The Parties to this Agreement irrevocably
consents to the exclusive jurisdiction and venue of any court within the State
of New York, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of Delaware for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction, venue and such process.

 

(f)                                    This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
it being understood that all Parties need not sign the same counterpart.  This
Agreement may be executed in whole or in part by facsimile signatures any of
which shall be deemed to be an original signature.

 

(g)                                 Each individual signing the Agreement hereby
represents and warrants that the Party on whose behalf such individual executes
this Agreement has authorized such individual to execute this Agreement on such
Party’s behalf.

 

WHEREFORE, the undersigned, on the dates set forth below, subscribe their hands
to this Agreement, acknowledge their assent to the terms and conditions set
forth herein, and agree to the foregoing.

 

 

CATALYTICA ENERGY SYSTEMS, INC.

 

 

 

 

DATE:

December 15, 2005

 

By:

s/Rob Zack

 

 

 

Rob Zack

 

 

President and CEO

 

 

 

ENVICA KAT GMBH

 

 

 

 

DATE:

December 16, 2005

 

By:

s/Frank Ebinger

 

 

Name:

Frank Ebinger

 

 

Title:

Managing Director

 

 

5

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EXHIBIT B

 

CONFIDENTIALITY AGREEMENT BETWEEN

CATALYTICA ENERGY SYSTEMS, INC. AND ENVICA KAT GMBH

 

This Confidentiality Agreement (this “Agreement”) is made and entered into as of
December 9, 2005 (the “Effective Date”) between Catalytica Energy Systems, Inc.
(“Catalytica”) and Envica Kat GmbH (“ENVICA”). 

 

1.0                               PURPOSE

 

The parties wish to set forth their agreement regarding ENVICA’s continuing
obligation to protect confidential information as set forth in the January 21,
2004 Membership Interests and Asset Purchase Agreement (MIAPA), and Catalytica’s
right to use such information. 

 

As used herein, “Acquired Assets” refers to the assets Catalytica obtained
through the MIAPA, as set forth in and pursuant to Schedules 2.1(b) and 11.15 of
that agreement, including the assets obtained from ENVICA. 

 

As used herein, “Transferred Technology” refers to all technology – that is, all
tangible embodiments of Intellectual Property Rights, including technology,
technical information, business information and software, systems, files,
records, databases, drawings, artwork, designs, displays, audio-visual works,
devices, hardware, apparatuses, documentation, manuals, specifications, flow
charts, web pages, customer lists, supplier lists, equipment lists, electronic
and other data, and other tangible embodiments of, or materials describing or
disclosing, technical or business data, concepts, recipes, formulas, operating
procedures, know-how, show-how, techniques, Trade Secrets, inventions (whether
patentable or unpatentable), algorithms, formulae, processes, routines,
databases, works of authorship and the like – listed or described in Schedules
2.1(b) and 11.15 of the MIAPA.

 

As used herein, “Intellectual Property Rights” refers to any and all rights
throughout the NAFTA Territories in, arising out of, or associated with any of
the following: (i) all utility models and design and utility patents and
applications therefore (including the right to file national patent applications
in the NAFTA Territories based on any patents or patent applications filed
outside the NAFTA Territories) and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof
(collectively, “Patents”); (ii) all inventions (whether patentable or not),
invention disclosures and improvements, all trade secrets, proprietary
information, know how and technology, including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, pricing and cost
information, and business and marketing plans and proposals (collectively,
“Trade Secrets”); (iii) all works of authorship, copyrights, mask works,
copyright and mask work registrations and applications (collectively,
“Copyrights”); (iv) all industrial designs and any registrations and
applications therefor (collectively, “Industrial Designs”); (v) all trade names,
logos, trademarks and service marks; trademark and service mark registrations
and applications

 

1

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(collectively, “Trademarks”); (vi) all computer software, databases and data
collections (including knowledge databases, customer lists and customer
databases) (collectively, “Software”); (vii) rights to Uniform Resource
Locators, Web site addresses and domain names (collectively, “Web Rights”);
(viii) any similar, corresponding or equivalent rights to any of the foregoing
(collectively, “Other IP Rights”); and (ix) all translations, adoptions,
derivations, and combinations thereof, including goodwill associated with any of
the foregoing.  “Intellectual Property Rights” expressly excludes any and all
rights anywhere in the world other than within the NAFTA Territories arising out
of or associated with any Patents (including the right to file PCT and/or
national patent applications outside the NAFTA Territories based on any patents
or patent applications filed within the NAFTA Territories, subject to
Catalytica’s rights pursuant to Section 3.0 of this agreement), Trade Secrets,
Copyrights, Industrial Designs, Trademarks, Software, Web Rights, Other IP
Rights or any translations, adoptions, derivations, and combinations thereof,
including goodwill associated with any of the foregoing.

 

As used herein, “Employees” means any current, former or rehired employee,
consultant, officer, or director of SCR Tech LLC or any of its subsidiaries.

 

As used herein, the “Business” means the business operated by the SCR Tech LLC
up to the execution of the MIAPA providing for (i) the cleaning, treatment and
regeneration of selective catalytic reduction (“SCR”) catalyst, (ii) SCR
management and SCR consulting services, (iii) research and development of SCR
catalyst treatment, management, cleaning and regeneration, and (iv) all SCR
activities related thereto in the NAFTA Territories. 

 

2.0                               CONFIDENTIALITY

 

ENVICA agrees that non-public information regarding the Acquired Assets (other
than Transferred Technology) and non-public information relating to the Business
obtained in any investigation pursuant to Section 11.1 of the MIAPA shall be
deemed to be the Confidential Information of Catalytica and shall not be used or
disclosed by ENVICA.  Except as (i) may be required by law or any listing
agreement with a national securities exchange or (ii) disclosed by Catalytica or
its affiliates, (a) ENVICA  shall not disclose the existence of the MIAPA or
this Confidentiality Agreement or any terms hereof or thereof, except under an
obligation of confidentiality to accountants, attorneys, investors, lenders,
acquirors and advisors in connection with financings, mergers or acquisitions of
ENVICA, EnBW Energy Solutions GmbH, SCR Tech GmbH or E&EC Environmental
Consultants GmbH or to attorneys solely for the purpose of evaluating or
litigating disputes arising hereunder, and (b) no party shall issue any
statement or communication to any third party (other than their respective
agents) regarding the subject matter of the MIAPA or the transactions
contemplated by the MIAPA, including, if applicable, the termination of MIAPA
and the reasons therefor, without the consent of the other party, which consent
shall not be unreasonably withheld.

 

In addition, ENVICA hereby further agrees to maintain and preserve the
confidential information pertaining to the Acquired Assets, including reasonable
efforts to preserve confidentiality of information disclosed to third parties
under confidentiality provisions in agreements retained by ENVICA.

 

2

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ENVICA hereby represents and warrants that it has not violated the terms of this
Confidentiality Agreement at any time from and after February 20, 2004.

 

3.0                               Use Of Confidentiality Information

 

Subject to the Territorial Restriction Agreement between Catalytica and ENVICA,
but otherwise notwithstanding anything to the contrary contained herein or in
any other agreement of ENVICA, including any agreement between ENVICA and any
employee of ENVICA, ENVICA hereby consents to Catalytica’s unrestricted,
sublicensable and transferable right to use, disclose and exploit in any manner
and without restriction any and all confidential information (i) disclosed by or
embodied in any of the Acquired Assets (other than Transferred Technology) or
(ii) which is disclosed to, or learned by, Catalytica in connection with the
transactions contemplated by the MIAPA or to or by the Employees to the extent
consisting of business or technical information pertaining to the Business
retained in non-tangible form by the Employees.  To the extent that any Employee
may be bound by any agreement or policy of ENVICA that would in any way limit or
restrict the rights of Catalytica to confidential information under this
Section 3.0, ENVICA shall not assert, enforce or otherwise exercise its rights
under such agreement or policy against any Employee or Catalytica.  In addition,
ENVICA hereby further agrees to maintain and preserve the confidential
information pertaining to the Acquired Assets, including reasonable efforts to
preserve confidentiality of information disclosed to third parties under
confidentiality provisions in agreements retained by ENVICA.

 

4.0                               TERMS

 

The obligations of ENVICA regarding Confidential Information set forth in
paragraph 2.0 shall continue in perpetuity.

 

5.0                               Miscellaneous

 

5.1                                 No party may assign or otherwise transfer
this Agreement without the prior written consent of the other party.  Subject to
the foregoing, this Agreement shall bind and inure to the benefit of the parties
hereto and their successors and assigns.

 

5.2                                 This Agreement shall be governed by the laws
of the State of Delaware, regardless of the law that might otherwise govern
under applicable principles of conflicts of laws.

 

5.3                                 Each party to this Agreement irrevocably
consents to the exclusive jurisdiction and venue of any court within the State
of New York, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
in any manner authorized by the laws of the State of Delaware for such persons
and waives and covenants not to assert or plead any objection which a party
might otherwise have to such jurisdiction, venue and

 

3

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such process.

 

5.4                                 Any determination of invalidity, illegality,
or unenforceability of any provision of this Agreement, as determined by a court
of competent jurisdiction, shall not affect the validity, legality, or
enforceability of any other provision.

 

5.5                                 Each party understands and agrees that this
Agreement shall not be changed or amended in any respect, except by a writing
executed by all of the parties hereto or their authorized representatives.

 

5.6                                 This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
it being understood that all parties need not sign the same counterpart.  This
Agreement may be executed in whole or in part by facsimile signatures any of
which shall be deemed to be an original signature.

 

WHEREFORE, the undersigned, on the dates set forth below, subscribe their hands
to this Confidentiality Agreement, acknowledge their assent to the terms and
conditions set forth herein, and agree to the foregoing.

 

DATE:

December 16, 2005

ENVICA Kat GmbH

 

 

 

 

 

 

 

 

By:

s/Frank Ebinger

 

 

 

Title:

Managing Director

 

 

 

 

DATE:

December 15, 2005

Catalytica Energy Systems, Inc.

 

 

 

 

 

 

 

 

By:

s/Rob Zack

 

 

 

Title:

President, CEO and CFO

 

 

4

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EXHIBIT C

 

CONFIDENTIALITY AGREEMENT BETWEEN CATALYTICA ENERGY

SYSTEMS, INC. AND ENBW ENERGY SOLUTIONS GMBH

 

This Confidentiality Agreement (this “Agreement”) is made and entered into as of
December 9, 2005 (the “Effective Date”) between Catalytica Energy Systems, Inc.
(“Catalytica”) and EnBW Energy Solutions GmbH (“EnBW”) and

 

1.0                               PURPOSE

 

The parties wish to set forth their agreement regarding EnBW’s continuing
obligation to protect confidential information as set forth in the January 21,
2004 Membership Interests and Asset Purchase Agreement (MIAPA), and Catalytica’s
right to use such information. 

As used herein, “Acquired Assets” refers to the assets Catalytica obtained
through the MIAPA, as set forth in and pursuant to Schedules 2.1(b) and 11.15 of
that agreement, including the assets obtained from EnBW. 

 

As used herein, “Transferred Technology” refers to all technology – that is, all
tangible embodiments of Intellectual Property Rights, including technology,
technical information, business information and software, systems, files,
records, databases, drawings, artwork, designs, displays, audio-visual works,
devices, hardware, apparatuses, documentation, manuals, specifications, flow
charts, web pages, customer lists, supplier lists, equipment lists, electronic
and other data, and other tangible embodiments of, or materials describing or
disclosing, technical or business data, concepts, recipes, formulas, operating
procedures, know-how, show-how, techniques, Trade Secrets, inventions (whether
patentable or unpatentable), algorithms, formulae, processes, routines,
databases, works of authorship and the like – listed or described in Schedules
2.1(b) and 11.15 of the MIAPA.

 

As used herein, “Intellectual Property Rights” refers to any and all rights
throughout the NAFTA Territories in, arising out of, or associated with any of
the following: (i) all utility models and design and utility patents and
applications therefor (including the right to file national patent applications
in the NAFTA Territories based on any patents or patent applications filed
outside the NAFTA Territories) and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof
(collectively, “Patents”); (ii) all inventions (whether patentable or not),
invention disclosures and improvements, all trade secrets, proprietary
information, know how and technology, including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, pricing and cost
information, and business and marketing plans and proposals (collectively,
“Trade Secrets”); (iii) all works of authorship, copyrights, mask works,
copyright and mask work registrations and applications (collectively,
“Copyrights”); (iv) all industrial designs and any registrations and
applications therefor (collectively, “Industrial Designs”); (v) all trade names,
logos, trademarks and service marks; trademark and service mark registrations
and applications (collectively, “Trademarks”); (vi) all computer software,
databases and data collections (including

 

1

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knowledge databases, customer lists and customer databases) (collectively,
“Software”); (vii) rights to Uniform Resource Locators, Web site addresses and
domain names (collectively, “Web Rights”); (viii) any similar, corresponding or
equivalent rights to any of the foregoing (collectively, “Other IP Rights”); and
(ix) all translations, adoptions, derivations, and combinations thereof,
including goodwill associated with any of the foregoing.  “Intellectual Property
Rights” expressly excludes any and all rights anywhere in the world other than
within the NAFTA Territories arising out of or associated with any Patents
(including the right to file PCT and/or national patent applications outside the
NAFTA Territories based on any patents or patent applications filed within the
NAFTA Territories, subject to Catalytica’s rights pursuant to Section 3.0 of
this agreement), Trade Secrets, Copyrights, Industrial Designs, Trademarks,
Software, Web Rights, Other IP Rights or any translations, adoptions,
derivations, and combinations thereof, including goodwill associated with any of
the foregoing.

 

As used herein, “Employees” means any current, former or rehired employee,
consultant, officer, or director of SCR Tech LLC or any of its subsidiaries.

 

As used herein, the “Business” means the business operated by the SCR Tech LLC
up to the execution of the MIAPA providing for (i) the cleaning, treatment and
regeneration of selective catalytic reduction (“SCR”) catalyst, (ii) SCR
management and SCR consulting services, (iii) research and development of SCR
catalyst treatment, management, cleaning and regeneration, and (iv) all SCR
activities related thereto in the NAFTA Territories. 

 

2.0                               CONFIDENTIALITY

 

EnBW agrees that non-public information regarding the Acquired Assets (other
than Transferred Technology) and non-public information relating to the Business
obtained in any investigation pursuant to Section 11.1 of the MIAPA shall be
deemed to be the Confidential Information of Catalytica and shall not be used or
disclosed by EnBW.  Except as (i) may be required by law or any listing
agreement with a national securities exchange or (ii) disclosed by Catalytica or
its affiliates, (a) EnBW  shall not disclose the existence of the MIAPA or this
Confidentiality Agreement or any terms hereof or thereof, except under an
obligation of confidentiality to accountants, attorneys, investors, lenders,
acquirors and advisors in connection with financings, mergers or acquisitions of
EnBW, Envica Kat GmbH, SCR Tech GmbH or E&EC Environmental Consultants GmbH or
to attorneys solely for the purpose of evaluating or litigating disputes arising
hereunder, and (b) no party shall issue any statement or communication to any
third party (other than their respective agents) regarding the subject matter of
the MIAPA or the transactions contemplated by the MIAPA, including, if
applicable, the termination of MIAPA and the reasons therefor, without the
consent of the other party, which consent shall not be unreasonably withheld.

 

In addition, EnBW hereby further agrees to maintain and preserve the
confidential information pertaining to the Acquired Assets, including reasonable
efforts to preserve confidentiality of information disclosed to third parties
under confidentiality provisions in agreements retained by EnBW.

 

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EnBW hereby represents and warrants that it has not violated the terms of this
Confidentiality Agreement at any time from and after February 20, 2004.

 

3.0                               Use Of Confidential Information

 

Notwithstanding anything to the contrary contained herein or in any other
agreement of EnBW, including any agreement between EnBW and any employee of
EnBW, EnBW hereby consents to Catalytica’s unrestricted, sublicensable and
transferable right to use, disclose and exploit in any manner and without
restriction any and all confidential information (i) disclosed by or embodied in
any of the Acquired Assets (other than Transferred Technology) or (ii) which is
disclosed to, or learned by, Catalytica in connection with the transactions
contemplated by the MIAPA or to or by the Employees to the extent consisting of
business or technical information pertaining to the Business retained in
non-tangible form by the Employees.  To the extent that any Employee may be
bound by any agreement or policy of EnBW that would in any way limit or restrict
the rights of Catalytica to confidential information under this Section 3.0,
EnBW shall not assert, enforce or otherwise exercise its rights under such
agreement or policy against any Employee or Catalytica.  In addition, EnBW
hereby further agrees to maintain and preserve the confidential information
pertaining to the Acquired Assets, including reasonable efforts to preserve
confidentiality of information disclosed to third parties under confidentiality
provisions in agreements retained by EnBW.

 

4.0                               Term

 

The obligations of EnBW regarding Confidential Information set forth in
paragraph 2.0 shall continue in perpetuity.

 

5.0                               Miscellaneous

 

5.1                                 No party may assign or otherwise transfer
this Agreement without the prior written consent of the other party.  Subject to
the foregoing, this Agreement shall bind and inure to the benefit of the parties
hereto and their successors and assigns.

 

5.2                                 This Agreement shall be governed by the laws
of the State of Delaware, regardless of the law that might otherwise govern
under applicable principles of conflicts of laws.

 

5.3                                 Each party to this Agreement irrevocably
consents to the exclusive jurisdiction and venue of any court within the State
of New York, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
in any manner authorized by the laws of the State of Delaware for such persons
and waives and covenants not to assert or plead any objection which a party
might otherwise have to such jurisdiction, venue and such process.

 

3

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5.4                                 Any determination of invalidity, illegality,
or unenforceability of any provision of this Agreement, as determined by a court
of competent jurisdiction, shall not affect the validity, legality, or
enforceability of any other provision.

 

5.5                                 Each party understands and agrees that this
Agreement shall not be changed or amended in any respect, except by a writing
executed by all of the parties hereto or their authorized representatives.

 

5.6                                 This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
it being understood that all parties need not sign the same counterpart.  This
Agreement may be executed in whole or in part by facsimile signatures any of
which shall be deemed to be an original signature.

 

WHEREFORE, the undersigned, on the dates set forth below, subscribe their hands
to this Confidentiality Agreement, acknowledge their assent to the terms and
conditions set forth herein, and agree to the foregoing.

 

DATE: December 16, 2005

EnBW Energy Solutions GmbH

 

 

 

 

 

By:

s/Werner Goetz

 

 

Title:

Managing Director

 

 

 

DATE: December 15, 2005

Catalytica Energy Systems, Inc.

 

 

 

 

 

By:

s/Rob Zack

 

 

Title:

President, CEO and CFO

 

 

4

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EXHIBIT D

 

CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT AMONG SCR-TECH LLC,
HANS-ULRICH HARTENSTEIN AND BRIGITTE HARTENSTEIN

 

This Confidentiality and Invention Assignment Agreement (this “Agreement”) is
made and entered into as of December 9, 2005 (the “Effective Date”) among
SCR-Tech LLC (“SCR-Tech”), Hans-Ulrich Hartenstein and Brigitte Hartenstein. 
Hans-Ulrich Hartenstein and Brigitte Hartenstein herein are collectively
referred to as the “Hartensteins”.

 

1.0                               PURPOSE

 

THE PARTIES WISH TO SET FORTH THEIR AGREEMENT REGARDING THE HARTENSTEINS’
TREATMENT OF CONFIDENTIAL INFORMATION OBTAINED, AND INVENTIONS CONCEIVED, DURING
THEIR EMPLOYMENT WITH SCR-TECH.

 

2.0                               NON-DISCLOSURE

 

The Hartensteins agree, now and hereafter, to hold in strictest confidence, and
not to use or to disclose to other persons or entities without the written
consent of SCR-Tech, any confidential information of SCR-Tech.  The Hartensteins
understand that “Confidential Information” means any SCR-Tech proprietary
information, technical data, trade secrets or know-how, including but not
limited to test results and reports, software, developments, inventions,
processes, formulas (including but not limited to any recipes, formulae, and
chemical lists related to SCR-Tech’s SCR catalyst cleaning, regeneration or
rejuvenation processes that were either developed by SCR-Tech or made available
to SCR-Tech by EnBW Energy Solutions GmbH and/or ENVICA Kat, GmbH), technology,
designs, drawings, engineering, hardware configuration information, financial
results and projections.  The Hartensteins further understand that Confidential
Information includes all non-public information regarding any interests or
assets transferred by ENVICA GmbH, ENVICA Kat GmbH, E&EC, Energy & Environment
Consultants GmbH, EnBW Energy Solutions GmbH, and SCR-Tech GmbH to SCR-Tech,
LLC, CESI-SCR, Inc., and CESI-Tech Technologies, Inc. as well as any non-public
information obtained during the due diligence process performed by CESI as part
of the transaction that is the subject of this resolution.  The Hartensteins
further understand that Confidential Information does not include any of the
foregoing items:

 

(a)                                  which have become generally known publicly
or otherwise available through no wrongful act of the Hartensteins or of others
who were under confidentiality obligations as to the item or items involved.

 

(b)                                 which have been known by the Hartensteins
prior to its disclosure by SCR-Tech.

 

(c )                               which have been or are subsequently disclosed
to the Hartensteins by a third party who did not acquire such information under
an obligation of confidentiality from or through SCR-Tech.

 

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(d)                                 which the Hartensteins independently
developed without the use of Confidential Information as demonstrated by written
evidence of independent development.

 

The Hartensteins agree that they shall take reasonable measures to protect the
secrecy of and avoid disclosure of all such Confidential Information.  The
Hartensteins hereby represent and warrant that they have not, since January 21,
2004, engaged in any act(s) that would have constituted a violation of the terms
of this Confidentiality and Invention Assignment Agreement had it been in effect
from such time through the present.

 

3.0                               ACKNOWLEDGEMENT OF RETURN OF MATERIALS

 

THE HARTENSTEINS HEREIN ACKNOWLEDGE THAT THEY HAVE CONDUCTED A COMPLETE SEARCH
FOR AND TURNED OVER ANY INFORMATION THAT WAS THE PROPERTY OF SCR-TECH AT THE
TIME OF THE TERMINATION OF THEIR EMPLOYMENT WITH SCR-TECH.

 

4.0                               ACKNOWLEDGEMENT OF ASSIGNMENT OF INVENTIONS

 

The Hartensteins acknowledge that they previously assigned to SCR-Tech, all
their right, title, and interest in the one invention that was developed during
their employment by SCR-Tech, generally known as the “Process for decoating
washcoat catalyst substrate” (the “Invention”) and that no other inventions were
developed during their tenure.

 

5.0                               Acknowledgement Of Patent And Copyright
Registration Cooperation Obligations

 

The Hartensteins acknowledge that they will agree to assist SCR-Tech or its
designee, at SCR-Tech’s expense, in every proper way to secure SCR-Tech’s rights
in the Invention  described hereinabove, and any copyrights, patents, mask work
rights or other intellectual property rights in the United States, that SCR-Tech
shall deem necessary. The Hartensteins further agree that they will execute or
cause to be executed, when it is in their power to do so, any such instrument or
papers to effectuate SCR-Tech’s rights in the Invention.  If SCR-Tech is unable
because of one or both of the Hartensteins’ mental or physical incapacity to
secure their signature(s) to apply for or to pursue any application for any
United States patents or copyright registrations covering the Invention assigned
to SCR-Tech the Hartensteins then hereby irrevocably designate and appoint
SCR-Tech and its duly authorized officers and agents as their agent and attorney
in fact, to act for and on the Hartensteins’ behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by the
Hartensteins.

 

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6.0                               TERM

 

THE OBLIGATIONS OF THE HARTENSTEINS REGARDING NON-DISCLOSURE SET FORTH IN
PARAGRAPH 2.0 SHALL CONTINUE IN PERPETUITY. THE OBLIGATION OF THE HARTENSTEINS
OUTLINED IN PARAGRAPH 5.0 WILL EXPIRE ONE (1) YEAR FROM THE DATE THIS DOCUMENT
IS EXECUTED BY THE HARTENSTEINS.

 

7.0                               MISCELLANEOUS

 

7.1                                 NO PARTY MAY ASSIGN OR OTHERWISE TRANSFER
THIS AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY; PROVIDED
HOWEVER, SCR-TECH MAY ASSIGN OR TRANSFER THIS AGREEMENT IN CONNECTION WITH A
MERGER, ACQUISITION, SALE OF SUBSTANTIALLY ALL ITS ASSETS OR OTHER SUCH
CORPORATE REORGANIZATION.  SUBJECT TO THE FOREGOING, THIS AGREEMENT SHALL BIND
AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR SUCCESSORS AND ASSIGNS.

 

7.2                                 THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NORTH CAROLINA, REGARDLESS OF THE LAW THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.

 

7.3                                 EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT WITHIN THE STATE
OF NORTH CAROLINA, MECKLENBURG COUNTY, IN CONNECTION WITH ANY MATTER BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREIN.  EACH PARTY
AGREES THAT PROCESS MAY BE SERVED IN ANY MANNER AUTHORIZED BY THE LAWS OF THE
STATE OF NORTH CAROLINA FOR SUCH PERSONS AND WAIVES AND COVENANTS NOT TO ASSERT
OR PLEAD ANY OBJECTION WHICH A PARTY MIGHT OTHERWISE HAVE TO SUCH JURISDICTION,
VENUE AND SUCH PROCESS.

 

7.4                                 ANY DETERMINATION OF INVALIDITY, ILLEGALITY,
OR UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT, AS DETERMINED BY A COURT
OF COMPETENT JURISDICTION, SHALL NOT AFFECT THE VALIDITY, LEGALITY, OR
ENFORCEABILITY OF ANY OTHER PROVISION.

 

7.5                                 EACH PARTY UNDERSTANDS AND AGREES THAT THIS
AGREEMENT SHALL NOT BE CHANGED OR AMENDED IN ANY RESPECT, EXCEPT BY A WRITING
EXECUTED BY ALL OF THE PARTIES HERETO OR THEIR AUTHORIZED REPRESENTATIVES.

 

7.6                                 THIS AGREEMENT MAY BE EXECUTED IN ONE OR
MORE COUNTERPARTS, ALL OF WHICH SHALL BE CONSIDERED ONE AND THE SAME AGREEMENT,
IT BEING UNDERSTOOD THAT ALL PARTIES NEED NOT SIGN THE SAME COUNTERPART.  THIS
AGREEMENT MAY BE EXECUTED IN WHOLE OR IN PART BY FACSIMILE SIGNATURES ANY OF
WHICH SHALL BE DEEMED TO BE AN ORIGINAL SIGNATURE.

 

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WHEREFORE, the undersigned, on the dates set forth below, subscribe their hands
to this Confidentiality and Invention Assignment Agreement, acknowledge their
assent to the terms and conditions set forth herein, and agree to the foregoing.

 

DATE: December 15, 2005

SCR-TECH, LLC.

 

 

 

 

 

By:

s/William J. McMahon

 

 

Title:

President

 

 

 

 

 

DATE: December 15, 2005

By:

s/Hans-Ulrich Hartenstein

 

 

 

   HANS-ULRICH HARTENSTEIN

 

 

 

 

DATE: December 15, 2005

By:

s/Brigitte Hartenstein

 

 

 

BRIGITTE HARTENSTEIN

 

4

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EXHIBIT E

 

WIRING INSTRUCTIONS

 

 

Wire Transfer Instructions from EnBW Energy Solutions GmbH

 

Beneficiary:

 

EnBW Energy Solutions GmbH,

 

 

 

 

 

Kriegsbergstr. 11, 70174 Stuttgart/ Germany

 

 

 

Bank:

 

Landesbank Stuttgart,

 

 

 

Phone:

IBAN (International Bank Account Number):

 

DE 97 6005 0101 7402 0523 05

BIC (International Bank Code ):

 

SOLA DE ST

Bank of Correspondence in the USA:

Other Wire Information:

 

a)  effective

 

 

 

 

 

b)  Purchase Price CESI

 

 

Wire Transfer Instructions from SCR-Tech GmbH

 

Beneficiary:

 

SCR-Tech GmbH,

 

 

 

 

 

Kriegsbergstr. 11, 70174 Stuttgart/ Germany

 

 

 

Bank:

 

Volksbank Oberberg eG, Bahnhofstr.3, 51674 Wiehl

 

 

 

Phone:

 

+49 2262 984-132

(Mr. Birkholz)

IBAN (International Bank Account Number)     :

 

DE 87 384 621 35 2133 007 167

BIC (International Bank Code for Volksbank):

 

GENODED1WIL

Via SWIFT-Code (International Code for WGZ Bank, which will transfer the money
to Volksbank):

 

GENODEDD (WGZ Bank Dusseldorf)

Bank of Correspondence in the USA:

 

Citibank in New York

Other Wire Information:

 

a)  SWIFT URGENT

 

 

 

 

 

c)  effective

 

 

 

 

 

d)  Purchase Price CESI

 

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