Document:

Exhibit
  10.4  

  

  Jiangsu Huangli Thermal Electric Investment Management Co., Ltd. 

    

Construction
  Contract for Thermal Electric Plant

    

    THIS
      CONTRACT FOR CONSTRUCTION AND RELATED SERVICES (the “Contract”) is entered into
      by and between JIANGSU HUANGLI PAPER INDUSTRY CO., LTD. (“Party A”) and WUHAN
      GENERATING EQUIPMENT CO., LTD. (“Party B”) on this 8th
      day of
      July, 2007, pursuant to the relevant rules and regulations of The People’s
      Republic of China’s Law on Contracts and the State Council’s Regulations on
      Building and Installation Contracts. Party A and Party B are referred to herein
      collectively as the “Parties” and individually as a “Party.”

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      Party A has agreed to purchase certain construction and related services from
      Party B, and Party B has agreed to provide such construction and related
      services to Party A; and

    

    WHEREAS,
      the Parties wish to set forth herein their agreements and understandings
      regarding such purchase and sale of such construction and related
      services;

    

    NOW
      THEREFORE, for and in consideration of the mutual covenants of the Parties
      set
      forth herein and other valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the Parties agree as follows:

    

    Article
      1

    General
      Provisions

    

    1.1 Project
      Approval. Pursuant to the Jiangsu Development and Planning Committee’s
Approval Reply
      on the Project of Jiangsu Fasten Thermal Electric Plant (Su
      Ji
      Jichu Fa (2003) No. 1177) and Notice No. (2003) 38 regarding this Approval
      Reply,
      a
      thermal electric plant shall be established in Huangli, Jiangsu (the “Contracted
      Project”).

    

    1.2 Project
      Name. The Contracted Project shall be named the Jiangsu Huangli Thermal Electric
      Plant.

    

    1.3 Project
      Location. The Contracted Project shall be located in Chengchang Centralized
      Industrial Park, Huangtu Town, Jiangyin, Jiangsu. 

    

    1.4 Project
      Construction. Party B shall be responsible for the construction of the
      Contracted Project.

    

    Article
      2

    Scope
      and
      Specifications of the Contracted Project

    

    2.1 Scope
      of
      the Project. The scope of the Contracted Project shall include the feasibility
      research, design and civil engineering, purchase of materials, construction
      and
      installation, road building, completion of the Contracted Project so that it
      is
      a synchronous generating system, delivery and acceptance upon examination by
      Party A of the Contracted Project, and passing a seventy-two (72) hour pilot
      run. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2.2 Specifications
      of the Project. The specifications of the Contracted Project shall include
      a
      thermal power plant consisting of two (2) NC-35/5.3 boiler furnaces; two (2)
      UC-75/5.3 boiler furnaces; one (1) set of C12-4.9/0.981 and QF-15-2 extraction
      condensing turbine generator group (the “First Generator Group”); one (1) set of
      B6-4.9/0.981 and QF-7.5-2 backpressure turbine generator group (the “Second
      Generator Group”); and all ancillary civil projects, including, without
      limitation, a steam turbine room, a boiler furnace room, a water carburetor
      room, a dry coal warehouse, a master-control room, chimney, trestle bridge,
      water circulating cooling tower, platform bridge, and slag stack yard. Each
      system of the Contracted Project shall comply with the Examination and
      Acceptance Regulations for Thermal Power Generation.

    

    Article
      3

    Construction
      Period and Postponement

    

    3.1 Construction
      Period. Party B shall complete, deliver for examination and acceptance by Party
      A, and put into production the First Generator Group on or before December
      31,
      2007. Party B shall complete, deliver for examination and acceptance by Party
      A,
      and put into production the Second Generator Group on or before June 30, 2008.
      

    

    3.2 Postponement
      to the Construction Period. The construction periods set forth in Section
      3.1
      shall be
      postponed in the event of any shutdown, delay in work due to poor organization,
      or for any of the following circumstances:

    

    
      	 	
              a.)

            	
              A
                significant loss caused by a natural or man-made
                disaster.

            

    

    

    
      	 	
              b.)
                

            	
              Party
                A fails to make payment to Party B within ten (10) days after the
                time
                limit set forth under Section
                7.1.

            

    

    

    
      	 	
              c.)

            	
              A
                major amendment to state policy.

            

    

    

    Article
      4

    Responsibilities
      of Both Parties

    

    4.1 Party
      A
      shall be responsible for the following:

    

    
      	 	
              a.)

            	
              Obtaining
                the right to use the land, the lease for the Contracted Project and
                for
                the provisional facilities of the Contracted Project, the building
                licenses, and the construction permit for the Contracted Project.
                

            

    

    

    
      	 	
              b.)

            	
              Obtaining
                the electricity, gas, and water for the worksite.
                

            

    

    

    
      	 	
              c.)

            	
              Providing
                approval documentation, surveying documentation, and hydrographic
                and
                meteorological data for the Contracted
                Project.

            

    

    

    
      	 	
              d.)

            	
              Making
                timely payments to Party B as set forth in this Contract and organizing
                examination and acceptance of the Contracted Project upon its completion
                by Party B. 

            

    

    

    
      	 	
              e.)

            	
              Designating
                a representative to manage any problem that Party A shall be liable
                for as
                well as other matters.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.2 Party
      B
      shall be responsible for the following:

    

    
      	     	
              a.)

            	
              Completing
                the Contracted Project pursuant to the terms and conditions of this
                Contract.

            

    

    

    
      	 	
              b.)

            	
              Providing
                to Party A a layout for the worksite, water and electricity supply,
                road,
                special dock, and provisional
                facilities.

            

    

    

    
      	 	
              c.)

            	
              Regularly
                providing to Party A a construction progress schedule, Contracted
                Project
                completion acceptance report, monthly statistics report, operation
                plan,
                and project quality report.

            

    

    

    
      	 	
              d.)

            	
              Before
                the completion of the Contracted Project, Party B shall be responsible
                for
                the buildings, installed equipment, and the worksite, including the
                clearing of the worksite.

            

    

    

    
      	 	
              e.)

            	
              Notifying
                Party A after delivery of the equipment to the worksite to participate
                in
                the examination of the equipment when it is unpacked, providing to
                Party A
                the drawings enclosed with the equipment, providing to Party A the
                checklist and certificate of qualification for filing, and transferring
                to
                Party A any special tools for the equipment and any worn parts left
                after
                entering into this Contract and prior to the completion of the Contracted
                Project.

            

    

    

    Article
      5

    Quality
      of the Contracted Project

    

    5.1 Party
      B
      shall organize the construction of the Contracted Project in strict compliance
      with the construction drawing, construction specifications, and relevant
      technical standards issued by the Water & Electricity Ministry.

    

    5.2 Party
      B
      shall submit the Contracted Project for examination and acceptance by Party
      A.
      Party A shall examine and accept the Contracted Project pursuant to the
      regulations and requirements of the Ministry of Electric Power.

    

    5.3 Pursuant
      to the relevant rules and regulations on power production, the start up of
      the
      First and Second Generator Groups shall be subject to running for one hundred
      sixty-eight (168) hours for each generator group prior to examination and
      acceptance by Party A.

    

    5.4 Party
      B
      shall be responsible for the maintenance of any quality issue regarding the
      design, construction, or manufacturing of the Contracted Project. Party B shall
      provide maintenance at no cost for one year from the date of examination and
      acceptance of the Contracted Project by Party A for any quality issue regarding
      the First and Second Generator Groups, boiler, or civil engineering of the
      Contracted Project. Party B shall provide maintenance at no cost for six (6)
      months from the date of examination and acceptance of the Contracted Project
      by
      Party A for any quality issue regarding installation of the Contracted Project.
      Party B shall be responsible for the manufacturer’s warranty terms for all other
      applicable equipment. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Article
      6

    Equipment
      and Materials; Examination and Use

    

    6.1 Equipment
      and Materials. Party B shall order, purchase, transport, and keep the equipment
      and materials required for the Contracted Project. 

    

    6.2 Examination
      and Use. Party B shall be responsible for the examination of the aforementioned
      equipment and materials when they are unpacked, with the participation of Party
      A. All the spare products, parts, and special tools for the equipment shall
      be
      kept and used by Party B, and Party B shall transfer these items to Party A
      upon
      the completion of the Contracted Project.

    

    Article
      7

    Payment
      Terms and Liabilities for Breach of Payment Terms

    

    7.1 Payment
      Terms. Upon the execution of this Contract, the payment of the Contracted
      Project shall be conducted in the following manner:

    

    
      	 	
              a.)

            	
              The
                total amount of the Contracted Project shall be One Hundred Ninety-Five
                Million Four Hundred Ten Thousand and 00/100 Renminbi (RMB 195,410,000)
                (the “Contract Price”).

            

    

    

    
      	 	
              b.)

            	
              Party
                A shall pay five percent (5%) of the Contract Price to Party B as
                a
                construction initiation fee within one month after the execution
                of this
                Contract. Thereafter, Party A shall make payments to Party B within
                the
                first ten (10) days of each month in accordance with the following
                schedule: 

            

    

     

    
      	
              Months
                2-5

            	
              Party
                A shall pay ten percent (10%) of the Contract Price for each
                month.

            
	
              Months
                6-8

            	
              Party
                A shall pay nine percent (9%) of the Contract Price for each
                month.

            
	
              Months
                9-10

            	
              Party
                A shall pay eight percent (8%) of the Contract Price for each
                month.

            
	
              Months
                11-12

            	
              Party
                A shall pay six percent (6%) of the Contract Price for each
                month.

            

    

     

    
      	
            	c.)	
              If
                Party A fails to make payment to Party B within ten (10) days after
                the
                time  limits
                set forth in the above payment schedule, then the Construction Period
                shall  be
                postponed accordingly. 

            

    

    

    7.2 Liabilities
      for Breach of Payment Terms.

    

    
      	 	
              a.)

            	
              To
                ensure timely payment by Party A under this Contract, Party A promises
                to
                put the Contracted Project in pledge to guarantee performance by
                Party
                A.

            

    

    

    
      	 	
              b.)

            	
              If
                Party A fails to make timely payment, Party B shall undertake the
                cost to
                continue the Contracted Project. Upon the completion of the Contracted
                Project, Party A and Party B shall determine their respective rights
                to
                the Contracted Project based on their respective contribution to
                the
                Contract Price and Party A’s liabilities for breach of this
                Contract.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.3 The
      capital cost of Party B’s financing shall be borne by Party A and shall be
      calculated pursuant to time, amount, and at an annual interest rate of ten
      percent (10%).

    

    7.4 If
      Party
      A breaches this Contract, Party B shall control the Contracted Project and
      also
      shall be entitled to charge Party A for the power rate. Both Parties’ rights
      shall be allocated pursuant to Section
      7.2(b).

    

    Article
      8

    Miscellaneous

    

    8.1 If
      any
      new law or regulation is issued during the performance of this Contract, this
      Contract shall be performed pursuant to the spirit of the applicable new law
      or
      regulation as of the effective date thereof.

    

    8.2 Party
      A
      shall bear the relevant taxes for the construction of the Contracted
      Project.

    

    8.3 The
      performance of this Contract shall be supervised by the bank(s) designated
      by
      the Parties. In the event of any economic dispute arising during the performance
      of the Contract, both Parties shall resolve the dispute by negotiation and
      both
      Parties shall be practical and realistic. If the negotiations fail, then both
      Parties may submit the dispute for arbitration by someone who is competent
      in
      industry and commerce.

    

    8.4 This
      Contract shall become effective upon the signature, notarization, and seal
      of
      both Parties, and it shall terminate upon Party A’s acceptance of the Contracted
      Project and Party A’s full payment of the Contract Price to Party B.

    

    8.5 This
      Contract shall be legally binding upon its effectiveness. Neither Party shall
      modify, change, or cancel this Contract without the prior consent of the other
      Party. Any Party that fails to abide by this limitation shall bear all legal
      and
      economic liabilities.

    

    8.6 Upon
      the
      mutual consent of both Parties, any matter not covered herein may be added
      as an
      attachment to this Contract, and such attachment shall have the same legal
      effect as this Contract.

    

    8.7 This
      Contract is made in four (4) originals and each Party shall hold two (2)
      originals.

     

    
      
        	
                JIANGSU
                  HUANGLI PAPER INDUSTRY CO., LTD.,

              	 	WUHAN
                GENERATING EQUIPMENT CO., LTD.,
	 	 	 
	as
                Party A	 	
                as
                  Party B

              
	 	 	 	 	 
	
                By:
                  

              	
                /s/ 

              	 	
                By:
                  

              	
                /s/ 

              
	
                Name:
                  

              	 	 	
                Name:
                  

              	 
	
                Title:
                  

              	 	 	
                Title:
                  

              	 
	 	 	 	 	 
	
                [Seal
                  of Party A]

              	 	
                [Seal
                  of Party B]

              

      

    

    

    Execution
      Date: July 8, 2007

    

    NOTARY
      PUBLICExhibit
        10.1

    

    

       

      STOCK
        PURCHASE AGREEMENT

       

      BY
        AND
        BETWEEN

       

      CATALYTICA
        ENERGY SYSTEMS, INC.,

       

      ACORN
        FACTOR, INC.

       

      COALOGIX
        INC.

       

      AND
        WITH
        RESPECT TO ARTICLE 11 ONLY

       

      RENEGY
        HOLDINGS, INC.

       

      DATED
        NOVEMBER 7, 2007

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      
        	 	 	
                Page

              
	 	 	 
	 	 
	
                ARTICLE 1
                  DEFINITIONS

              	
                2

              
	 	 
	
                1.1

              	
                Certain
                  Definitions

              	
                2

              
	
                1.2

              	
                Other
                  Definitions

              	
                4

              
	 	 
	
                ARTICLE 2
                  SALE AND TRANSFER OF SHARES; CLOSING

              	
                6

              
	 	 
	
                2.1

              	
                Purchase
                  and Sale of Shares

              	
                6

              
	
                2.2

              	
                Assumption
                  of Liabilities

              	
                6

              
	
                2.3

              	
                Consideration
                  for the Shares

              	
                7

              
	
                2.4

              	
                Further
                  Assurances

              	
                9

              
	
                2.5

              	
                Closing

              	
                9

              
	
                2.6

              	
                Closing
                  Obligations

              	
                9

              
	 	 
	
                ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF SELLER CONCERNING THE
                  BUSINESS

              	
                10

              
	 	 
	
                3.1

              	
                Qualification;
                  Organization; Subsidiaries, etc.

              	
                11

              
	
                3.2

              	
                Capital
                  Structure

              	
                11

              
	
                3.3

              	
                Business
                  Financial Statements

              	
                12

              
	
                3.4

              	
                No
                  Undisclosed Liabilities

              	
                12

              
	
                3.5

              	
                Compliance
                  with Law; Permits

              	
                13

              
	
                3.6

              	
                Environmental
                  Laws and Regulations

              	
                13

              
	
                3.7

              	
                Employee
                  Benefit Plans

              	
                14

              
	
                3.8

              	
                Absence
                  of Certain Changes or Events

              	
                17

              
	
                3.9

              	
                Investigations;
                  Litigation

              	
                18

              
	
                3.10

              	
                Tax
                  Matters

              	
                18

              
	
                3.11

              	
                Labor
                  Matters

              	
                19

              
	
                3.12

              	
                Intellectual
                  Property

              	
                19

              
	
                3.13

              	
                Real
                  Property

              	
                21

              
	
                3.14

              	
                Title
                  to Assets

              	
                22

              
	
                3.15

              	
                Material
                  Contracts

              	
                22

              
	
                3.16

              	
                Insurance

              	
                23

              
	
                3.17

              	
                Equipment
                  and Other Tangible Property

              	
                23

              
	
                3.18

              	
                Suppliers
                  and Customers

              	
                23

              
	
                3.19

              	
                Absence
                  of Certain Business Practices

              	
                24

              
	
                3.20

              	
                Transactions
                  with Affiliates

              	
                
                  24

                

              
	
                3.21

              	
                No
                  Other Assets

              	
                
                  24

                

              
	
                3.22

              	
                No
                  Business Material Adverse Effect

              	
                
                  24

                

              
	 	 
	
                ARTICLE 4
                  REPRESENTATIONS AND WARRANTIES OF SELLER CONCERNING ITSELF

              	
                25

              
	 	 
	
                4.1

              	
                Organization

              	
                25

              
	
                4.2

              	
                Corporate
                  Authority Relative to this Agreement; No Violation

              	
                25

              

      

       

      
        
          
          

        

        
          -
            i
            -

          
            

          

        

        
          
          

        

      

      

        TABLE
          OF CONTENTS

        (Continued)

      

       

      
        	
                4.3

              	
                Finders
                  or Brokers

              	
                26

              
	
                4.4

              	
                No
                  Additional Representations

              	
                26

              
	
                4.5

              	
                Financial
                  Statements Included in SEC Filings

              	
                26

              
	 	 
	
                ARTICLE 5
                  REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER

              	
                27

              
	 	 
	
                5.1

              	
                Organization

              	
                27

              
	
                5.2

              	
                Corporate
                  Authority Relative to this Agreement; No Violation

              	
                27

              
	
                5.3

              	
                Investigations;
                  Litigation

              	
                28

              
	
                5.4

              	
                Finders
                  or Brokers

              	
                28

              
	
                5.5

              	
                Investment
                  Intent

              	
                28

              
	
                5.6

              	
                Solvency

              	
                28

              
	
                5.7

              	
                Financing

              	
                29

              
	
                5.8

              	
                Operations
                  of Buyer

              	
                29

              
	 	 
	
                ARTICLE 6
                  COVENANTS

              	
                29

              
	 	 
	
                6.1

              	
                Confidentiality

              	
                29

              
	
                6.2

              	
                Tax
                  Matters

              	
                29

              
	
                6.3

              	
                Public
                  Announcements

              	
                31

              
	
                6.4

              	
                Transaction
                  Costs

              	
                31

              
	
                6.5

              	
                Retention
                  of and Access to Records

              	
                32

              
	
                6.6

              	
                Payments

              	
                32

              
	
                6.7

              	
                Cooperation
                  in Post-Closing Litigation

              	
                32

              
	
                6.8

              	
                Cooperation
                  as to Financial Statements

              	
                32

              
	
                6.9

              	
                Return
                  of Excluded Assets

              	
                32

              
	 	 
	
                ARTICLE 7
                  EMPLOYMENT MATTERS

              	
                33

              
	 	 
	
                7.1

              	
                Employees

              	
                33

              
	
                7.2

              	
                Welfare
                  Plans

              	
                33

              
	
                7.3

              	
                Severance

              	
                34

              
	
                7.4

              	
                Savings
                  Plans

              	
                34

              
	
                7.5

              	
                Post-Retirement
                  Benefit Liabilities

              	
                34

              
	
                7.6

              	
                Long
                  Term Disability

              	
                34

              
	
                7.7

              	
                Life
                  Insurance

              	
                34

              
	
                7.8

              	
                Vacation

              	
                35

              
	
                7.9

              	
                Cooperation

              	
                35

              
	
                7.10

              	
                Post-Closing
                  Date Participation

              	
                35

              
	
                7.11

              	
                General

              	
                35

              
	 	 
	
                ARTICLE 8
                  INDEMNIFICATION; REMEDIES

              	
                35

              
	 	
              
	
                8.1

              	
                Survival

              	
                35

              
	
                8.2

              	
                Indemnification
                  by Parent and Buyer

              	
                36

              
	
                8.3

              	
                Indemnification
                  by Seller

              	
                36

              

      

       

      
        
          
          

        

        
          -
            ii
            -

          
            

          

        

        
          
          

        

      

      

        TABLE
          OF CONTENTS

        (Continued)

      

       

      
        	
                8.4

              	
                Notice
                  of Claims

              	
                36

              
	
                8.5

              	
                Procedure
                  for Indemnification; Third Party Claims; Arbitration

              	
                36

              
	
                8.6

              	
                Limitations
                  on Indemnification

              	
                38

              
	
                8.7

              	
                Exclusive
                  Remedy

              	
                39

              
	
                 

              	 
	
                ARTICLE 9
                  GENERAL PROVISIONS

              	
                40

              
	 	 
	
                9.1

              	
                Notices

              	
                40

              
	
                9.2

              	
                Certain
                  Definitions

              	
                41

              
	
                9.3

              	
                Interpretation

              	
                42

              
	
                9.4

              	
                Counterparts

              	
                42

              
	
                9.5

              	
                Entire
                  Agreement; Third-Party Beneficiaries

              	
                42

              
	
                9.6

              	
                Governing
                  Law

              	
                42

              
	
                9.7

              	
                Assignment

              	
                42

              
	
                9.8

              	
                Nondisclosure

              	
                42

              
	
                9.9

              	
                Amendments;
                  Waiver

              	
                42

              
	
                9.10

              	
                Enforcement

              	
                43

              
	
                9.11

              	
                Severability

              	
                43

              
	 	 
	
                ARTICLE 10
                  GUARANTEE OF BUYER’S OBLIGATIONS

              	
                43

              
	 	 
	
                10.1

              	
                Guaranty

              	
                43

              
	
                10.2

              	
                Guaranty
                  Absolute

              	
                43

              
	
                10.3

              	
                Obligations
                  Several

              	
                44

              
	
                10.4

              	
                Obligations
                  Continuing

              	
                44

              
	
                10.5

              	
                Enforcement
                  of Guaranty

              	
                45

              
	
                10.6

              	
                Waiver

              	
                45

              
	
                10.7

              	
                Expenses

              	
                45

              
	
                10.8

              	
                Benefit
                  of Guaranty

              	
                46

              
	
                10.9

              	
                Reinstatement

              	
                46

              
	
                10.10

              	
                Continuing
                  Guaranty

              	
                46

              
	
                10.11

              	
                Effective
                  Date and Term of Guaranty

              	
                46

              
	 	 
	
                ARTICLE 11
                  GUARANTEE OF SELLER’S OBLIGATIONS

              	
                46

              
	 	 
	
                11.1

              	
                Guaranty

              	
                46

              
	
                11.2

              	
                Guaranty
                  Absolute

              	
                46

              
	
                11.3

              	
                Obligations
                  Several

              	
                47

              
	
                11.4

              	
                Obligations
                  Continuing

              	
                47

              
	
                11.5

              	
                Enforcement
                  of Guaranty

              	
                48

              
	
                11.6

              	
                Waiver

              	
                48

              
	
                11.7

              	
                Expenses

              	
                48

              
	
                11.8

              	
                Benefit
                  of Guaranty

              	
                48

              
	
                11.9

              	
                Reinstatement

              	
                49

              
	
                11.10

              	
                Continuing
                  Guaranty

              	
                49

              
	
                11.11

              	
                Effective
                  Date and Term of Guaranty

              	
                49

              

      

       

      
        
          
          

        

        
          -
            iii
            -

          
            

          

        

        
          
          

        

      

    

     

    EXHIBITS

     

    EXHIBIT
      A Assignment
      and Assumption Agreement

    EXHIBIT
      B Opinion
      of Counsel to Seller

    EXHIBIT
      C Opinion
      of Counsel to Buyer

     

    SCHEDULES

    SCHEDULE
      A Excluded
      Assets

    SCHEDULE
      B Purchase
      Price Allocation

    SCHEDULE
      C Current
      Assets

    SCHEDULE
      D Current
      Liabilities

    SCHEDULE
      E Working
      Capital Example Computation

     

    
      
        
        

      

      
        -
          iv
          -

        
          

        

      

      
        
        

      

    

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”)
      is
      made as of November 7, 2007, by and between Catalytica Energy Systems,
      Inc., a Delaware corporation (“Seller”),
      Acorn
      Factor, Inc., a Delaware corporation (“Parent”),
      CoaLogix Inc., a Delaware corporation and a subsidiary of Parent (“Buyer”)
      and
      with respect to Article 11 only, Renegy Holdings, Inc., parent of Seller
      (“Renegy”).

     

    RECITALS

     

    WHEREAS,
      Seller owns all of the issued and outstanding shares of capital stock of
      CESI-SCR, Inc., a Delaware corporation and a direct wholly-owned subsidiary
      of
      Seller (“CESI-SCR”),
      and
      CESI-Tech Technologies, Inc., a Delaware corporation and a direct wholly-owned
      subsidiary of Seller (“CESI-Tech”).

     

    WHEREAS,
      CESI-SCR owns all of the issued and outstanding membership interests of
      SCR-Tech, LLC, a North Carolina limited liability company and a direct
      wholly-owned subsidiary of CESI-SCR (“SCR-Tech”
and,
      collectively with CESI-SCR and CESI-Tech, the “Acquired
      Companies”
and
      each an “Acquired
      Company”).

     

    WHEREAS,
      the Acquired Companies are engaged in the business of cleaning and regenerating
      selective catalyst reduction (“SCR”)
      catalyst used by coal-fired power generation facilities to reduce nitrogen
      oxide
      emissions and providing SCR catalyst management services for such power
      generation facilities (collectively, the “Business”).

     

    WHEREAS,
      Seller and/or its Subsidiaries (as defined below) are subject to certain
      liabilities relating to the Business.

     

    WHEREAS,
      Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
      all
      of the issued and outstanding shares of capital stock of CESI-SCR and CESI-Tech
      (the “Shares”),
      and
      in connection therewith, Buyer has agreed to assume certain liabilities of
      Seller relating to the Business, all upon the terms and subject to the
      conditions set forth in this Agreement.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      herein and for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the parties hereby agree as follows.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 1

     

    DEFINITIONS

     

    1.1 Certain
      Definitions. 
      For purposes of this Agreement, the following terms have the meanings specified
      or referred to in this Section 1.1:

     

    “Ancillary
      Agreement”
—
the
      Assignment and Assumption Agreement.

     

    “assets”
—
all
      properties, assets, rights (contractual or otherwise) and claims, whether
      personal, tangible or intangible.

     

    “Business
      Intellectual Property”
—
all
      Intellectual Property owned by the Acquired Companies for use in the Business
      as
      conducted as of the date hereof.

     

    “Closing
      Date”
—
the
      date and time as of which the Closing actually takes place.

     

    “COBRA”
      —
      the
      Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

     

    “Contract”
—
any
      written agreement, contract, subcontract, lease, understanding, instrument,
      note, option, warranty, purchase order, license, sublicense, insurance policy,
      benefit plan or legally binding commitment or undertaking of any nature.

     

    “Excluded
      Assets”
—
the
      assets of the Acquired Companies set forth on Schedule A
      hereto.

     

    “Governmental
      Entity”
—
any
      Federal, state or local government or any court, administrative agency, bureau,
      commission, department or other authority of any domestic or foreign government
      or any arbitrator in any case that has jurisdiction over an applicable party
      or
      any of its properties or assets.

     

    “Intellectual
      Property” —
      (a) inventions and discoveries, whether patentable or not, invention
      disclosures, and all Patents; (b) Trademarks; (c) published and
      unpublished works of authorship, whether copyrightable or not (including
      databases and other compilations of information), copyrights therein and
      thereto, and registrations and applications therefor, and all renewals,
      extensions, restorations and reversions thereof; (d) Trade Secrets and
      (e) all other intellectual property or similar proprietary rights,
      including all formulas, know-how, processes, techniques, designs, and all
      foreign counterparts to any of the items described in the foregoing clauses
      (a)
      through (e).

     

    “IP
      Applications”—
all
      applications filed with a Governmental Entity to obtain any Registered
      Intellectual Property, including applications for Patents, copyright
      registrations or Trademark registrations.

     

    “IRC”
—
the
      Internal Revenue Code of 1986, as amended from time to time, or any successor
      law.

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    “IRS”
—
the
      United States Internal Revenue Service or any successor agency, and, to the
      extent relevant, the United States Department of the Treasury.

     

    “IT
      Assets”
—the
      Acquired Companies’ computers, computer software, firmware, middleware, servers,
      workstations, routers, hubs, switches, data communications lines, and all other
      information technology equipment, and all associated
      documentation.

     

    “Liability”
—
any
      direct or indirect debt, obligation or liability of any kind or nature, whether
      accrued or fixed, absolute or contingent, determined or determinable, matured
      or
      unmatured, and whether due or to become due, asserted or unasserted, or known
      or
      unknown.

     

    “Licensed
      Intellectual Property”
      —Intellectual Property and IP Applications that the Acquired Companies are
      licensed or otherwise permitted by other persons to use.

     

    “Patent
      Application”
—
any
      IP Application filed with a Governmental Entity to obtain a
      Patent.

     

    “Patents”
—
      patents and applications therefor, including divisions, continuations,
      continuations-in-part and renewal applications, and including renewals,
      extensions and reissues.

     

    “Proceeding”
—
any
      action, inquiry, proceeding, arbitration, audit, hearing, investigation,
      litigation, or suit (whether civil, criminal, administrative, investigative,
      or
      informal) commenced, brought, conducted, or heard by or before any Governmental
      Entity.

     

    “Registered
      Intellectual Property”
—
any
      issued Patent, copyright registration, Trademark registration or other similar
      Intellectual Property registration, in each case that is issued, registered
      or
      granted by the United States Patent and Trademark Office, the United States
      Copyright Office or any corresponding foreign Governmental Entity, and any
      application filed with any such Governmental Entity for the purpose of obtaining
      such a registration.

     

    “Representative”
—
with
      respect to a particular person, any director, officer, employee, agent,
      consultant, or other representative of such person, including legal counsel,
      accountants, financial advisors and lenders.

     

    “SEC”
—
the
      Securities and Exchange Commission.

     

    “Trade
      Secrets”
—
      confidential and proprietary information, trade secrets and know-how, including
      processes, schematics, business methods, formulae, drawings, prototypes, models,
      designs, customer lists, supplier lists, databases and other compilations of
      information.

     

    “Trademarks”
—
      trademarks, service marks, brand names, certification marks, collective marks,
      d/b/a’s, Internet domain names, logos, symbols, trade dress, assumed names,
      fictitious names, trade names, and other indicia of origin, all applications
      and
      registrations for the foregoing, and all goodwill associated therewith and
      symbolized thereby, including all renewals of the same.

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    1.2 Other
      Definitions. 
      The following terms are defined in the Sections
      indicated:

    

      
        	
                Term

              	 	
                Section

              

      

      
        	
                Acquired
                  Companies

              	 	
                Recitals

              
	
                Acquired
                  Company

              	 	
                Recitals

              
	
                Acquired
                  Company Real Property

              	 	
                3.13

              
	
                Acquired
                  Companies Registered Intellectual Property

              	 	
                3.12(a)

              
	
                Acquired
                  Material Lease

              	 	
                3.13

              
	
                affiliates

              	 	
                9.2(b)

              
	
                Agreement

              	 	
                Preamble

              
	
                Assignment
                  and Assumption Agreement

              	 	
                2.6(a)(ii)

              
	
                Assumed
                  Liabilities

              	 	
                2.2(b)

              
	
                Basket

              	 	
                8.6(a)

              
	
                Benefit
                  Plans

              	 	
                3.7(a)

              
	
                Business
                  Balance Sheet

              	 	
                3.3

              
	
                business
                  day

              	 	
                9.2(e)

              
	
                Business
                  Employee

              	 	
                3.7(a)

              
	
                Business
                  Employees

              	 	
                3.7(a)

              
	
                Business
                  Financial Statements

              	 	
                3.3

              
	
                Business
                  Material Adverse Effect

              	 	
                3.1

              
	
                Business
                  Material Contracts

              	 	
                3.15(a)

              
	
                Buyer

              	 	
                Preamble

              
	
                Buyer
                  Savings Plan

              	 	
                7.4

              
	
                Buyer
                  Indemnified Parties

              	 	
                8.3

              
	
                CESI-SCR

              	 	
                Recitals

              
	
                CESI-Tech

              	 	
                Recitals

              
	
                Closing

              	 	
                2.5

              
	
                Closing
                  Working Capital

              	 	
                2.3(b)(ii)

              
	
                Confidentiality
                  Agreement

              	 	
                0

              
	
                control

              	 	
                9.2(b)

              
	
                controlled
                  by

              	 	
                9.2(b)

              
	
                Controlled
                  Group Liability

              	 	
                3.7(h)

              
	
                Environmental
                  Law

              	 	
                3.6(b)

              
	
                ERISA

              	 	
                3.7(a)

              
	
                Exchange
                  Act

              	 	
                3.20

              
	
                Excluded
                  Liabilities

              	 	
                2.2(c)

              
	
                GAAP

              	 	
                3.3

              
	
                Hazardous
                  Substance

              	 	
                3.6(c)

              
	
                Indemnified
                  Party

              	 	
                8.4

              
	
                Indemnifying
                  Party

              	 	
                8.4

              
	
                Independent
                  Accountant

              	 	
                2.3(b)(iv)

              
	
                IP
                  Applications

              	 	
                1.1

              
	
                IT
                  Assets

              	 	
                1.1

              
	
                knowledge

              	 	
                9.2(d)

              

      

       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

      
      

      
        
          	
                  Term

                	 	
                  Section

                

        

      

      
        	
                Law

              	 	
                3.5(a)

              
	
                Laws

              	 	
                3.5(a)

              
	
                Licensed
                  Intellectual Property

              	 	
                1.1

              
	
                Lien

              	 	
                4.2(c)

              
	
                Losses

              	 	
                8.2

              
	
                Notice
                  of Disagreement

              	 	
                2.3(b)(iv)

              
	
                Parent

              	 	
                Preamble

              
	
                Patent
                  Application

              	 	
                1.1

              
	
                Parent
                  Guaranteed Obligations

              	 	
                10.1

              
	
                Permitted
                  Lien

              	 	
                4.2(c)

              
	
                person

              	 	
                9.2(c)

              
	
                Pre-Closing
                  Income Tax Return

              	 	
                6.2(b)

              
	
                Pre-Closing
                  Tax Period

              	 	
                6.2(a)

              
	
                Property
                  Taxes

              	 	
                6.2(a)

              
	
                Purchase
                  Price

              	 	
                2.3(a)

              
	
                Registered
                  Intellectual Property

              	 	
                1.1

              
	
                Renegy

              	 	
                Preamble

              
	
                Renegy
                  Guaranteed Obligations

              	 	
                11.1

              
	
                SCR-Tech

              	 	
                Recitals

              
	
                SCR

              	 	
                Recitals

              
	
                Securities
                  Act

              	 	
                3.20

              
	
                Seller

              	 	
                Preamble

              
	
                Seller
                  Disclosure Schedules

              	 	
                Article 3

              
	
                Seller
                  Indemnified Parties

              	 	
                8.2

              
	
                Seller
                  Permits

              	 	
                3.5(b)

              
	
                Seller
                  Savings Plans

              	 	
                7.4

              
	
                Seller
                  SEC Documents

              	 	
                3.20

              
	
                Shares

              	 	
                Recitals

              
	
                Statement
                  of Working Capital

              	 	
                2.3(b)(ii)

              
	
                Straddle
                  Period

              	 	
                6.2(a)

              
	
                Subsidiaries

              	 	
                9.2(a)

              
	
                Survival
                  Period

              	 	
                8.1

              
	
                Tax
                  Contest

              	 	
                6.2(b)

              
	
                Tax
                  Return

              	 	
                3.10(b)

              
	
                Taxes

              	 	
                3.10(b)

              
	
                Trade
                  Secrets

              	 	
                1.1

              
	
                Trademarks

              	 	
                1.1

              
	
                Transfer
                  Taxes

              	 	
                6.4

              
	
                under
                  common control with

              	 	
                9.2(b)

              
	
                Working
                  Capital

              	 	
                2.3(b)(i)

              

      

       

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE 2

     

    SALE
      AND TRANSFER OF SHARES; CLOSING

     

    2.1 Purchase
      and Sale of Shares.
      Subject
      to the terms and conditions of this Agreement, at the Closing, (i) Seller will
      sell and transfer the Shares to Buyer free and clear of all Liens (other than
      restrictions imposed by applicable securities laws), and Buyer will purchase
      the
      Shares from Seller. Notwithstanding
      anything herein to the contrary, Seller or any of its Subsidiaries (including
      the Acquired Companies) shall be permitted to cause any or all of the Acquired
      Companies to transfer to Seller (and thereby to not directly or indirectly
      sell
      or transfer to Buyer) any Excluded Assets. 

     

    2.2 Assumption
      of Liabilities. 

     

    (a) Assumption.
      Upon
      the terms and subject to the conditions set forth herein, at the Closing and
      effective as of the Closing Date, Buyer shall assume from Seller (and therefore
      agree to pay, perform and discharge), and Seller shall irrevocably convey,
      transfer and assign to Buyer, all of the Assumed Liabilities. For the avoidance
      of doubt, and notwithstanding anything else to the contrary herein, it is
      understood and agreed that Buyer shall assume all Liabilities of the Acquired
      Companies by virtue of Buyer’s purchase of the Shares (including the indirect
      purchase of the membership interests of SCR-Tech).

     

    (b) Definition
      of Assumed Liabilities.
      For all
      purposes of and under this Agreement, the term “Assumed
      Liabilities”
shall
      mean, refer to and include only the following Liabilities of Seller, and only
      to
      the extent such Liabilities arise out of or relate to the operation of the
      Business: 

     

    (i) Liabilities
      of Seller reflected in the Business Financial Statements and Liabilities
      incurred in the ordinary course of business after the date of the Business
      Financial Statements in connection with the operation of the Business (including
      any Liabilities related to workers compensation for any Business
      Employees);

     

    (ii) Liabilities
      for Taxes that are the responsibility of Buyer pursuant to Section 6.2
      or
Section 6.4;

     

    (iii) Liabilities
      of Seller arising out of or in connection with any Proceedings to the extent
      related to the Business, whether in existence on or after the date hereof
      (including any Proceedings set forth in Section 3.11
      of the
      Seller Disclosure Schedules and any Liabilities related to workers compensation
      for any Business Employees for all periods on or after the Closing
      Date);

     

    (iv) Liabilities
      of Seller for any obligation to make severance or retention payments to any
      Business Employee as set forth in any employment agreement or other Contract
      between Seller or any of its Subsidiaries and any such Business
      Employee;

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    (v) Liabilities
      of Seller for all accrued vacation and sick time of, and bonus plan payments
      payable to, all Business Employees;

     

    (vi) all
      Liabilities assumed or to be performed by Buyer pursuant to Article 7
      and the
      second sentence of Section
      2.2(a);

     

    (vii) Liabilities
      of Seller arising from discharges or releases of Hazardous Substances,
      violations of Environmental Laws or similar matters to the extent such
      Liabilities are related to the operations of the Business, any Acquired Company
      Real Property or any other real property owned, leased or otherwise occupied
      at
      any time for the operation of the Business or by an Acquired Company;

     

    (viii) Liabilities
      under all employment agreements and other Contracts between Seller or any of
      its
      Subsidiaries and any Business Employee, but specifically excluding any
      Liabilities of Seller relating to stock options or other equity-based
      compensation involving any securities of Seller or any of its Subsidiaries;
      and

     

    (ix) Liabilities
      of Seller for the capitalized leases set forth in Section
      2.2(b)(ix)
      of the
      Seller Disclosure Schedules.

     

    (c) Definition
      of Excluded Liabilities.
      Notwithstanding anything to the contrary set forth in this Section 2.2
      or
      elsewhere in this Agreement, Buyer shall not assume, and Seller agrees that
      Buyer shall not be liable or otherwise responsible for, the following
      Liabilities of Seller (the
      Liabilities referred to in clauses (i) through (ii) of this Section 2.2(c),
      collectively, the “Excluded
      Liabilities”):

     

    (i) Liabilities
      of Seller in respect of transaction costs payable by Seller pursuant to
Section 6.4;
      

     

    (ii) Liabilities
      for Taxes that are the responsibility of Seller pursuant to Section 6.2;
      

     

    (iii) Liabilities
      for inter-company notes or accounts payable owed by an Acquired Company to
      Seller or any Subsidiary of Seller (other than any Acquired Company);
      and

     

    (iv) any
      other
      Liabilities of Seller (but not the Acquired Companies), other than Assumed
      Liabilities .

     

    2.3 Consideration
      for the Shares. 
      

     

    (a) Subject
      to the adjustments in Section 2.3(b),
      the
      aggregate consideration (the “Purchase
      Price”)
      for
      the Shares will be (i) $9,600,000 in cash and (ii) the assumption by
      Buyer of the Assumed Liabilities pursuant to Section 2.2.
      The
      Purchase Price shall be allocated to the Shares as set forth on Schedule B
      hereto.

     

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

     

    (b) Working
      Capital Adjustment.

     

    (i) For
      all
      purposes of and under this Agreement, the term “Working
      Capital”
shall
      mean (x) the value of the current assets of the categories described on
Schedule C hereto
      of
      the Acquired Companies, minus (y) the value of the current liabilities of
      the categories described on Schedule D
      hereto
      of the Acquired Companies or included in the Assumed Liabilities; provided,
      however, that
      for
      purposes of determining Working Capital, the Assumed Liabilities shall not
      include any costs or expenses required to be paid by Buyer pursuant to the
      terms
      of this Agreement, including any Transfer Taxes payable by Buyer pursuant to
      Section
      6.4.

     

    (ii) As
      promptly as practicable, but in any event within thirty (30) days following
      the
      Closing, Buyer shall cause to be prepared and delivered to Seller a statement
      (the “Statement
      of Working Capital”)
      setting forth the Working Capital as of the Closing (the “Closing
      Working Capital”).
      The
      Statement of Working Capital shall include the corresponding balance sheet
      and
      statement of income—each of which shall be prepared in accordance with GAAP
      (except for the omission of notes thereto)—and consistent with the manner of
      preparation of the example computation of Working Capital for September 30,
      2007, attached as Schedule E
      hereto,
      and with the past practices of Seller. Buyer will cooperate and work in good
      faith with Seller, and Seller will cooperate with and assist Buyer, including
      through providing any reasonably requested documentation, in the preparation
      of
      the Statement of Working Capital. Buyer will, upon Seller’s written request,
      make available to Seller and its auditors a copy of all workpapers and other
      books and records utilized by Buyer in the preparation of the Statement of
      Working Capital.

     

    (iii) Subject
      to Section 2.3(b)(iv),
      within
      thirty (30) days following delivery of the Statement of Working Capital pursuant
      to Section 2.3(b)(ii),
      (A) Buyer shall pay to Seller the amount, if any, that the Closing
      Working Capital
      reflected in the Statement of Working Capital exceeds $500,000, or
      (B) Seller shall pay to Buyer the amount, if any, that $500,000 exceeds the
      Closing Working Capital reflected in the Statement of Working Capital. Any
      and
      all payments made pursuant to this Section 2.3(b)(iii)
      shall be
      made by wire transfer of immediately available funds to an account designated
      in
      writing by the party to receive such payment. Any payment made pursuant to
      this
Section 2.3(b)(iii)
      shall be
      deemed to be an adjustment to the Purchase Price.

     

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

     

    (iv) If
      Seller
      disagrees in good faith with the Statement of Working Capital, then Seller
      shall
      notify Buyer in writing (the “Notice
      of Disagreement”)
      of
      such disagreement within twenty-five (25) days following delivery of the
      Statement of Working Capital. If Buyer has not received a Notice of Disagreement
      within such twenty-five (25)-day period, Seller shall be deemed to have accepted
      the Statement of Working Capital. Any Notice of Disagreement shall set forth
      in
      reasonable detail the adjustments Seller proposes to make to the Statement
      of
      Working Capital and the basis therefor and shall be consistent with the
      provisions of Section 2.3(b)(ii).
      Thereafter, Seller and Buyer shall attempt in good faith to resolve and finally
      determine the amount of the Closing Working Capital. If Seller and Buyer are
      unable to resolve the disagreement within thirty (30) days following delivery
      of
      the Notice of Disagreement, then Seller and Buyer shall select a mutually
      acceptable, nationally recognized independent accounting firm that does not
      then
      have a relationship with Seller or Buyer (the “Independent
      Accountant”),
      to
      resolve the disagreement and make a determination with respect thereto. If
      Seller and Buyer are unable, within ten (10) days, to select a mutually
      acceptable Independent Accountant, then each of Seller and Buyer shall select
      a
      nationally recognized independent accounting firm that does not have a
      relationship with Seller or Buyer, and these two firms will choose a nationally
      recognized independent accounting firm who will serve as the Independent
      Accountant. The determination of the Independent Accountant to resolve the
      disagreement between Seller and Buyer as to the Statement of Working Capital
      will be made, and written notice thereof given to Seller and Buyer, within
      thirty (30) days after the selection of the Independent Accountant. The
      determination by the Independent Accountant shall be final, binding and
      conclusive upon Seller and Buyer, absent manifest error. The scope of the
      Independent Accountant’s engagement (which will not be an audit) shall be
      limited to the resolution of the disputed items described in the Notice of
      Disagreement, and the recalculation, if any, of the Statement of Working Capital
      in light of such resolution. If an Independent Accountant is engaged pursuant
      to
      this Section 2.3(b)(iv),
      the
      fees and expenses of the Independent Accountant shall be borne equally by Seller
      and Buyer. Within ten (10) days after delivery of a notice of determination
      by
      the Independent Accountant as described above, any payment required by
Section 2.3(b)(iii)
      shall be
      made, based on such determination.

     

    2.4 Further
      Assurances.
      For a
      period of one hundred eighty (180) days after the Closing, and without further
      consideration therefor, (a) Seller shall execute and deliver such documents
      and take such other actions as Buyer may reasonably request in order to more
      effectively convey the Shares
      to
      Buyer and evidence the transactions contemplated by this Agreement, and
      (b) Buyer shall execute and deliver such documents and take such other
      actions as Seller may reasonably request (including executing such further
      instruments and certificates of assumption, novation and release as Seller
      may
      reasonably request) in order to effectively make Buyer responsible for all
      Assumed Liabilities and release Seller therefrom to the fullest extent permitted
      under applicable Law and evidence the transactions contemplated by this
      Agreement.

     

    2.5 Closing.
      Except
      to the extent that Buyer and Seller agree on another time and place, the
      purchase and sale (the “Closing”)
      provided for in this Agreement will take place at the offices of Wilson Sonsini
      Goodrich & Rosati, Professional Corporation at 650 Page Mill Road,
      Palo Alto, CA 94304, at 10:00 a.m. (local time) on the date
      hereof.

     

    2.6 Closing
      Obligations.
      At the
      Closing:

     

    (a) Seller
      will deliver to Buyer:

     

    (i) certificates
      representing the Shares, duly endorsed (or accompanied by duly executed stock
      or
      transfer powers), for transfer to Buyer; 

     

    (ii) a
      duly
      executed Instrument of Assignment and Assumption from Seller substantially
      in
      the form attached hereto as Exhibit A
      (the
“Assignment
      and Assumption Agreement”);

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    (iii) an
      opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, dated
      as of the date of the Closing, in substantially the form attached hereto as
      Exhibit
      B;

     

    (iv) a
      duly
      executed certificate of Seller that Seller is not a foreign person subject
      to
      withholding under Section 1445 of the IRC; and

     

    (v) all
      other
      instruments or documents as Buyer may reasonably request to effect the
      assignment of the Shares as contemplated hereby.

     

    (b) Buyer
      will deliver to Seller:

     

    (i) the
      Purchase Price by wire transfer in immediately available funds to the account(s)
      specified by Seller;

     

    (ii) an
      opinion of Eilenberg Krause & Paul LLP, dated as of the date of the Closing,
      in substantially the form attached hereto as Exhibit
      C;

     

    (iii) a
      duly
      executed copy of the Assignment and Assumption Agreement; and

     

    (iv) duly
      executed copies of all other instruments and certificates of assumption,
      novation and release as Seller may reasonably request in order to effectively
      make Buyer responsible for all Assumed Liabilities and release Seller therefrom
      to the fullest extent permitted under applicable Law.

     

    ARTICLE 3

     

    REPRESENTATIONS
      AND WARRANTIES OF SELLER
      CONCERNING THE BUSINESS

     

    Except
      as
      disclosed in
      the
      disclosure schedules delivered by Seller to Buyer concurrently with the
      execution of this Agreement (it being agreed that any information set forth
      in
      one Section of such disclosure schedules shall be deemed to apply to each other
      Section thereof to which its relevance is reasonably apparent) (the “Seller
      Disclosure Schedules”),
      Seller represents and warrants to Buyer as follows:

     

    
      
        
        

      

      
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    3.1 Qualification;
      Organization; Subsidiaries, etc.
      Each
      of
the
      Acquired Companies is
      a
      legal entity duly organized, validly existing and in good standing under the
      Laws of its respective jurisdiction of organization and has all requisite
      corporate or similar power and authority to own, lease and operate its
      properties and assets and to carry on its business as presently conducted and
      is
      qualified to do business and is in good standing as a foreign corporation in
      each jurisdiction where the ownership, leasing or operation of its assets or
      properties or conduct of its business requires such qualification, except where
      the failure to be so organized, validly existing, qualified or in good standing,
      or to have such power or authority, would not have, individually or in the
      aggregate, a Business Material Adverse Effect. As used in this Agreement, any
      reference to any facts, circumstances, events or changes having a “Business
      Material Adverse Effect”
means
      such facts, circumstances, events or changes that are, or would reasonably
      be
      expected to be, materially adverse to the business, financial condition or
      continuing operations of the Business taken as a whole but shall not include
      facts, circumstances, events or changes (a) generally affecting the
      industries in which the Acquired Companies operate or the economy or the
      financial or securities markets in the United States or elsewhere in the world,
      including regulatory and political conditions or developments (including any
      outbreak or escalation of hostilities or acts of war or terrorism) or
      (b) resulting from (i) the announcement or the existence of, or
      compliance with, this Agreement or the transactions contemplated hereby or
      (ii) changes in applicable Law, GAAP or accounting standards. No
      Acquired Company is in violation, in any material respect, of any of the
      provisions of its respective certificate of incorporation and by-laws or similar
      organizational documents. All of the outstanding shares of capital stock of,
      or
      other equity interests in the Acquired Companies have been validly issued and
      are fully paid and non-assessable, owned directly or indirectly by Seller,
      free
      and clear of all Liens, other than restrictions imposed under securities laws,
      and are not subject to any restriction on the right to vote, sell or otherwise
      dispose of such capital stock or other ownership interests, except for
      restrictions imposed by applicable securities laws.

     

    3.2 Capital
      Structure.

     

    (a) All
      outstanding shares of capital stock or other equity interests of each Acquired
      Company are duly authorized, validly issued, fully paid and non-assessable
      and
      free of pre-emptive rights.

     

    (b) There
      are
      no outstanding subscriptions, options, warrants, calls, convertible securities
      or other similar rights, agreements or commitments relating to the issuance
      of
      capital stock or other equity interests to which any Acquired Company is a
      party obligating any Acquired Company to (i) issue, transfer or sell any
      shares of capital stock or other equity interests of such Acquired Company
      or
      securities convertible into or exchangeable for such shares or equity interests,
      (ii) grant, extend or enter into any such subscription, option, warrant,
      call, convertible securities or other similar right, agreement, arrangement
      or
      commitment to repurchase, (iii) redeem or otherwise acquire any such shares
      of capital stock or other equity interests, or (iv) provide funds to, or
      make any investment (in the form of a loan, capital contribution or otherwise)
      in, any of its Subsidiaries. There are no outstanding or authorized stock
      appreciation, phantom stock, profit participation or other similar stock or
      other equity-based rights of any Acquired Company.

     

    (c) No
      Acquired Company has any outstanding bonds, debentures, notes or other
      obligations, the holders of which have the right to vote (or which are
      convertible into or exercisable for securities having the right to vote) with
      the stockholders or other equity holders of such Acquired Company on any matter.
      

     

    (d) There
      are
      no voting trusts or other agreements or understandings to which any Acquired
      Company is a party with respect to the voting of the capital stock or other
      equity interests of such Acquired Company.

     

    
      
        
        

      

      
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    (e) The
      copies of the certificate of incorporation and by-laws or similar organizational
      documents of each of the Acquired Companies, as the case may be, made available
      to Buyer are true, accurate, and complete copies thereof and reflect all
      amendments made through the date of this Agreement. The stock and minute books
      of the Acquired Companies made available to Buyer for review were correct and
      complete in all material respects as of the date they were so made available,
      no
      further entries have been made through the date of this Agreement, and such
      minute books contain an accurate record of all stockholder, member and entity
      actions of the stockholders, members and directors (and any committees thereof)
      of the Acquired Companies taken by written consent or at a meeting since January
      1, 2005 and through the date hereof. All corporate or entity actions taken
      by
      the Acquired Companies have been duly authorized or ratified to the extent
      required by applicable Law.

     

    (f) CESI-SCR
      does not have any Subsidiaries other than SCR-Tech and neither CESI-Tech nor
      SCR-Tech has any Subsidiaries.

     

    3.3 Business
      Financial Statements.
      Attached to Section 3.3
      of the
      Seller Disclosure Schedules is a true, correct and complete copy of the
      unaudited statement of assets and liabilities of the Business as of September
      30, 2007 (the “Business
      Balance Sheet”),
      and
      the related unaudited statements of revenues and expenses for the nine (9)-month
      period then ended (collectively with the Business Balance Sheet, the
“Business
      Financial Statements”).
      The
      Business Financial Statements are derived from the books and records of the
      Acquired Companies, were prepared in accordance with United States generally
      accepted accounting principles (“GAAP”)
      (except that they do not include the notes to the Business Financial Statements
      required under GAAP) and fairly present, in all material respects, the assets
      and the liabilities of the Acquired Companies as of the dates thereof, and
      the
      results of operations of the Acquired Companies for the periods then
      ended.

     

    3.4 No
      Undisclosed Liabilities.
      Except
      (a) as reflected or reserved against in the Business Balance Sheet (or the
      notes thereto), (b) for liabilities permitted by or incurred pursuant to
      this Agreement, (c) for liabilities and obligations incurred in the
      ordinary course of business consistent with past practice since the date of
      the
      Business Balance Sheet, (d) for liabilities and obligations for pension
      liabilities and insurance reserves, including in connection with workers
      compensation, and (e) for liabilities or obligations which have been
      discharged or paid in full in the ordinary course of business, none of the
      Acquired Companies has any liabilities or obligations, of any nature, in each
      case, whether or not accrued, contingent or otherwise, that would be required
      by
      GAAP to be reflected on a consolidated balance sheet of the Business (or in
      the
      notes thereto). The Business Financial Statements and Section 3.3
      of the
      Seller Disclosure Schedules specifically identify and set forth those
      liabilities of Seller currently known to Seller that are to become Assumed
      Liabilities at the Closing. Any inter-company promissory notes or accounts
      payable previously owed by the Acquired Companies to Seller or to any of its
      Subsidiaries (other than the Acquired Companies) have been converted to
      contributed capital.

     

    
      
        
        

      

      
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    3.5 Compliance
      with Law; Permits.

     

    (a) Each
      Acquired Company is in compliance in all material respects with and is not
      in
      default in any material respect under or in violation in any material respect
      of
      any applicable federal, state, local or foreign constitution, law, statute,
      ordinance, rule, regulation, judgment, order, injunction, decree or agency
      requirement issued, enacted, adopted, promulgated, implemented or otherwise
      put
      into effect by or under the authority of any Governmental Entity (collectively,
      “Laws”
and
      each, a “Law”).
      None of
      the Acquired Companies has received or entered into any citations, complaints,
      consent orders, compliance schedules, or other similar enforcement orders
      relating to any noncompliance of any of the Acquired Companies with any Laws.
      None of the Acquired Companies has received any written notice from any
      Governmental Entity that any of them is not currently compliance with any Laws.
      Without limiting the generality of the foregoing, neither Seller nor any of
      the
      Acquired Companies has received written notice of any claim, action, suit,
      investigation or proceeding, or to the knowledge of Seller, is aware of any
      threatened claim, action, suit, investigation or proceeding, that would be
      reasonably likely to result in a finding that Seller or any of the Acquired
      Companies is not or has not been in compliance in all material respects with
      Laws, with respect to the Business, relating to (a) the development, testing,
      manufacture, packaging, distribution and marketing of products by the Business,
      (b) employment, safety and health, (c) building, zoning and land use and/or
      (d)
      the Foreign Corrupt Practices Act and the rules and regulations promulgated
      thereunder.

     

    (b) Each
      Acquired Company is in possession of all franchises, grants, authorizations,
      licenses, permits, easements, variances, exceptions, consents, certificates,
      approvals and orders of any Governmental Entity necessary for the Acquired
      Companies to own, lease and operate their properties and assets or to carry
      on
      the Business as it is now being conducted (the “Seller
      Permits”),
      except where the failure to have any of the Seller Permits would not have,
      individually or in the aggregate, a material adverse effect on the Business.
      Each Acquired Company has complied in all material respects with all terms
      and
      conditions of the Seller Permits, and all Seller Permits are in full force
      and
      effect in all material respects. 

     

    3.6 Environmental
      Laws and Regulations.
      

     

    (a) Except
      as
      would not, individually or in the aggregate, result in a material adverse effect
      on the Business, (i) Seller (with respect to the Business) and the Acquired
      Companies are in compliance with all applicable Environmental Laws, (ii) 
no Hazardous Substance (as defined below) is present at, in, on, under or about
      any of the properties currently owned or leased by any of the Acquired Companies
      in amounts exceeding the levels permitted by applicable Environmental Laws
      and
      for which any Acquired Company would reasonably be expected to be liable,
      (iii)  since the date of the Business Balance Sheet none of Seller or
      any of its Subsidiaries (including the Acquired Companies) have received any
      written notices, demand letters or requests for information from any person,
      including any Governmental Entity alleging that Seller (with respect to the
      Business) or the Acquired Companies may be in violation of, or liable under,
      any
      Environmental Law as it pertains to the operation of the Business and neither
      the Acquired Companies nor, with respect to the Business, Seller are the subject
      of any outstanding written notices, demand letters or requests for information
      from any person, including any Governmental Entity alleging that Seller or
      any
      of its Subsidiaries may be in violation of, or liable under, any Environmental
      Law as it pertains to the operation of the Business, and (iv) neither
      Seller (with respect to the Business) nor any Acquired Company is the subject
      of
      any suit, settlement, court order, administrative order, judgment or written
      claim asserted or arising under any Environmental Law. 

     

    
      
        
        

      

      
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    (b) As
      used
      herein, “Environmental
      Law”
means
      any applicable Law relating to (x) the protection, preservation or
      restoration of the environment (including air, water vapor, surface water,
      groundwater, drinking water supply, surface land, subsurface land, plant and
      animal life or any other natural resource), or (y) the exposure to
      (including employee exposure to), or the use, storage, recycling, treatment,
      generation, transportation, processing, handling, labeling, production, release
      or disposal of Hazardous Substances, in each case as in effect at the date
      hereof.
      It is
      agreed and understood that no representation or warranty is made in respect
      of
      environmental matters in any Section of this Agreement other than this
Section 3.6.

     

    (c) As
      used
      herein, “Hazardous
      Substance”
means
      any material, substance or waste listed, defined, designated or classified
      as
      hazardous, toxic, radioactive, or dangerous, a pollutant or contaminant or
      otherwise regulated, by any Governmental Entity, including any petroleum or
      any
      derivative or byproduct thereof, radon, radioactive material, friable asbestos,
      urea formaldehyde or polychlorinated biphenyls. 

     

    3.7 Employee
      Benefit Plans.
      

     

    (a) Section 3.7(a)
      of the
      Seller Disclosure Schedules lists all Benefit Plans. “Benefit
      Plans”
means
      all plans, programs, policies, agreements or other arrangements, whether or
      not
“employee benefit plans” (within the meaning of Section 3(3) of the
      Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
      whether or not subject to ERISA), providing for all payroll practices, including
      employment, consulting or other compensation agreement, or bonus or other
      incentive compensation, stock purchase, equity or equity-based compensation,
      deferred compensation, change in control, sick leave, loan, salary continuation,
      educational assistance, health, medical, dental, disability, accident or life
      insurance benefits, vacation, severance, retirement, pension or savings
      benefits, plans, policies, agreements or arrangements that are sponsored,
      maintained or contributed to by Seller or any of its affiliates for the benefit
      of current or former employees, directors or consultants of any Acquired Company
      (with respect to their relationship to the Business) (each a “Business
      Employee”
and
      collectively, the “Business
      Employees”).

     

    (b) Other
      than as disclosed on Section 3.7(a)
      of the
      Seller Disclosure Schedules, neither Seller nor any Acquired Company has any
      commitment to establish any new Benefit Plan (except to the extent required
      by
      Law or to conform any such Benefit Plan to the requirements of any applicable
      Law, as required by this Agreement) or to modify any Benefit Plan for the
      benefit of the Business Employees.

     

    (c) Seller
      has made available to Buyer correct and complete copies of:

     

    (i) each
      Benefit Plan;

     

    
      
        
        

      

      
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    (ii) the
      most
      recent annual report (Form Series 5500 and all schedules and financial
      statements attached thereto), if any, required under ERISA or the IRC in
      connection with each Benefit Plan; 

     

    (iii) the
      most
      recent summary plan description together with the summary(ies) of material
      modifications thereto, if any, required under ERISA with respect to each Benefit
      Plan; and 

     

    (iv) any
      IRS
      determination letters relating to each Benefit Plan.

     

    (d) Each
      Benefit Plan has been maintained and administered in material compliance with
      its terms and with applicable Law, statutes, orders, and rules and regulations,
      including but not limited to ERISA and the IRC to the extent applicable thereto.
      

     

    (e) Any
      Benefit Plan intended to be qualified under Section 401(a) of the IRC and
      each trust intended to qualify under Section 501(a) of the
      IRC:

     

    (i) has
      either applied for, prior to the expiration of the requisite period under
      applicable Treasury Regulations or IRS pronouncements, or obtained a favorable
      determination, notification, advisory and/or opinion letter, as applicable,
      as
      to its qualified status from the IRS or still has a remaining period of time
      under applicable Treasury Regulations or IRS pronouncements in which to apply
      for such letter and to make any amendments necessary to obtain a favorable
      determination;

     

    (ii) incorporates
      or has been amended to incorporate all provisions required to comply with the
      Tax Reform Act of 1986 and subsequent legislation; and

     

    (iii) has,
      to
      the knowledge of the Seller, had no event, condition or circumstance that has
      adversely affected or is likely to adversely affect such qualified
      status.

     

    (f) Except
      as
      set forth in Section 3.7(f)
      of the
      Seller Disclosure Schedules, no Benefit Plan provides, reflects or represents
      any liability to provide post-termination or retiree welfare benefits to any
      person for any reason, except as may be required by COBRA or other applicable
      statute, and neither Seller nor any Acquired Company has made a binding
      commitment to provide to any Business Employee (either individually or to
      Business Employees as a group) with post-termination or retiree welfare
      benefits, except to the extent required by COBRA or other applicable
      statute.

     

    (g) No
      Benefit Plan is subject to Title IV or Section 302 of ERISA or
      Section 412 or Section 4971 of the IRC.

     

    (h) There
      does not exist any Controlled Group Liability (as defined below) that would
      be a
      liability of Seller or any of its Subsidiaries, including any Acquired Company
      (or constitute an Assumed Liability), at the time of or following the Closing.
      “Controlled
      Group Liability”
means
      liabilities (i) under Title IV of ERISA, (ii) under
      Section 302 of ERISA, (iii) under Sections 412 and Section 4971
      of the IRC or (iv) as a result of a failure to comply with the continuation
      coverage requirements of Section 601 et seq. of ERISA and
      Section 4980B of the IRC, other than such liabilities that arise solely out
      of, or relate solely to, the Benefit Plans which are disclosed in Section
      3.7(a)
      of the
      Seller Disclosure Schedules.

     

    
      
        
        

      

      
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    (i) The
      consummation of the transactions contemplated by this Agreement will
      not:

     

    (i) entitle
      any Business Employee to severance pay, unemployment compensation or any other
      payment, except as expressly provided in this Agreement or as required by
      applicable Law, or

     

    (ii) accelerate
      the time of payment or vesting, or increase the amount of compensation due
      any
      such Business Employee, except as expressly provided in this
      Agreement.

     

    (j) Seller
      is
      in good faith compliance with the requirements of Section 409A of the IRC
      with respect to all “nonqualified deferred compensation plans” (as defined in
      Section 409A of the IRC) maintained by Seller or any Acquired Company to
      which any Acquired Company or any Business Employee is a party.

     

    (k) Neither
      Seller nor any Subsidiary (including, but not limited to any Acquired Company)
      has ever contributed or been obligated to contribute to any “multiemployer plan”
(within the meaning of Section 3(37) of the IRC).

     

    (l) Seller
      and each Acquired Company have timely made all payments and contributions due
      from them through the Closing with respect to each Benefit Plan and no payments
      or contributions are owed by either the Seller or any Acquired Company with
      respect to any Benefit Plan for all periods ending on or before the
      Closing.

     

    (m) Neither
      Seller nor any Acquired Company has incurred or reasonably expects to incur
      any
      complete or partial withdrawal liability with respect to any “multiemployer
      plan” (within the meaning of Section 3(37) of the IRC).

     

    (n) Neither
      Seller nor any Acquired Company maintains any welfare benefit fund within the
      meaning of the Section 419 of the IRC with respect to any Business
      Employees.

     

    (o) Except
      as
      set forth in Section
      3.7(o)
      of the
      Seller Disclosure Schedules, the Business Balance Sheet properly and adequately
      reflects any and all liabilities and obligations of Seller and each Acquired
      Company relating to any period ending on or prior to the Closing in respect
      of
      all Business Employees, for (a) unpaid compensation, salaries, wages, disability
      payments and other payroll items (including, without limitation, bonus,
      incentive or deferred compensation, vacation or other paid leave), (b) unpaid
      contributions, costs and expenses to or in respect of any Benefit Plan, (c)
      severance or other termination benefits relating to, resulting from or arising
      in respect of any termination of employment occurring on or prior to the
      Closing, and (d) any Assumed Liabilities relating to Business Employees not
      otherwise specified herein.

     

    
      
        
        

      

      
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    (p) There
      is
      no contract, Benefit Plan or arrangement covering any Business Employee that,
      individually or collectively, could give rise to the payment of any amount
      that
      would not be deductible pursuant to the terms of Section 280G of the
      IRC.

     

    3.8 Absence
      of Certain Changes or Events.
      Since
      the date of the Business Balance Sheet, through the date of this Agreement,
      except as otherwise contemplated, required or permitted by this Agreement,
      the
      Business has been conducted, in all material respects, in the ordinary course
      of
      business consistent with past practice and there has not been (i) any
      event, development or state of circumstances that has had, individually or
      in
      the aggregate, a Business Material Adverse Effect, (ii) any non-cash
      distribution or dividend made by any Acquired Company, (iii) any repurchase
      of equity securities by any Acquired Company, (iv) any split, combination
      or reclassification of any of the Acquired Companies’ capital stock or other
      equity interests, (v) any material change in accounting methods, principles
      or practices of any Acquired Company or, with respect to the Business, Seller,
      (vi) any acquisition by any Acquired Company of, or agreement by any
      Acquired Company to, acquire, any business or corporation, partnership,
      association or other business organization or division thereof, (vii) any
      sale, lease, license, encumbrance (other than a Permitted Lien) or other
      disposition of any properties or assets of any Acquired Company, except the
      sale, lease, license, encumbrance or disposition of property or assets in the
      ordinary course of business consistent with past practice, (viii) any
      damage, destruction or loss, whether or not covered by insurance, with respect
      to the properties or assets of any Acquired Company having a replacement cost
      of
      more than $50,000, (ix) entry by an Acquired Company into any employment,
      deferred compensation, severance or similar agreement (or amendment to any
      such
      agreement) with any Business Employee, or any agreement with any Business
      Employee to increase the compensation payable by it to any such Business
      Employee or to increase the coverage or benefits available under any severance
      pay, termination pay, vacation pay, salary continuation for disability, sick
      leave, deferred compensation, bonus or other incentive compensation, insurance,
      pension or other employee benefit plan made to, for or with such Business
      Employees other than, in each case, in the ordinary course of business
      consistent with past practice, (x) any election by Seller relating to Taxes
      in respect of the Acquired Companies or settlement or compromise of any claim
      relating to Taxes in respect of the Acquired Companies, (xi) entry into,
      amendment or termination of any material agreement to which an Acquired Company
      is a party or by which it is bound; (xii) any material change, whether written
      or oral, to any agreement or understanding with any of the Acquired Companies’
material suppliers or customers; (xiii) any acceleration or delay in collection
      of any notes or accounts receivable of the Acquired Companies in advance of
      or
      beyond their regular due dates or the dates when they would have been collected
      in the ordinary course of business consistent with past practices; (xiv) any
      delay or accelerated payment of any accrued expense, trade payable or other
      liability of the Acquired Companies beyond or in advance of its due date or
      the
      date when such liability would have been paid in the ordinary course of business
      consistent with past practices; or (xv) any settlement of any claim or
      litigation, or filing of any motions, orders, briefs or settlement agreements
      in
      any proceeding involving the Acquired Companies before any Governmental Entity
      or any arbitrator.

     

    
      
        
        

      

      
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          17
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    3.9 Investigations;
      Litigation.
      As of
      the date hereof, there are no actions, suits, claims, investigations or
      proceedings pending or, to the knowledge of Seller, threatened against any
      of
      the Acquired Companies or Seller (with respect to the Business) at law or in
      equity before any Governmental Entity or arbitrator, and there are no orders,
      judgments or decrees affecting the Acquired Companies or the Business issued
      by
any
      Governmental Entity or arbitrator.
      To the
      knowledge of Seller, there is no investigation or review pending by any
      Governmental Entity with respect to the Acquired Companies or the
      Business.

     

    3.10 Tax
      Matters.

     

    (a) (i) Seller
      and each Acquired Company have prepared and timely filed (taking into account
      any extension of time within which to file) all Tax Returns with the appropriate
      Governmental Entity in all jurisdictions in which such Tax Returns are required
      to be filed and all such filed Tax Returns are true, correct and complete in
      all
      material respects, (ii) Seller and each Acquired Company have fully and
      timely paid all Taxes that are required to be paid, except with respect to
      matters contested in good faith or for which adequate reserves have been
      established in accordance with GAAP, (iii) the U.S. consolidated federal
      income Tax Returns of Seller and it Subsidiaries have been examined by the
      Internal Revenue Service (or the period for assessment of the Taxes in respect
      of which such Tax Returns were required to be filed has expired) for all periods
      ending on or before December 31, 2002, (iv) there are not pending or
      threatened, any audits, examinations, investigations or other proceedings in
      respect of U.S. federal or state Taxes, (v) there are no Liens for Taxes on
      any of the assets of the Acquired Companies other than Permitted Liens,
      (vi) neither
      Seller nor Acquired Company has been a “controlled corporation” or a
“distributing corporation” in any distribution occurring during the two-year
      period ending on the date hereof that was purported or intended to be governed
      by Section 355 of the IRC (or any similar provision of state, local or
      foreign Law), (vii) each Seller and each Acquired Company have complied
      with all applicable Laws relating to the payment and withholding of Taxes and
      have duly and timely withheld and paid over to the appropriate Governmental
      Entity all amounts required to be so withheld and paid over under such Laws,
      and
      (viii)  neither Seller nor any Acquired Company has engaged in a
“reportable transaction,” within the meaning of Treas. Reg.
      Section 1.6011-4(b), including any transaction that is the same or
      substantially similar to one of the types of transactions that the Internal
      Revenue Service has determined to be a tax avoidance transaction and identified
      by notice, regulation or other form of published guidance as a “listed
      transaction,” as set forth in Treas. Reg. Section 1.6011-4(b)(2).

     

    (b) As
      used
      in this Agreement, (i) “Taxes”
means
      any and all domestic or foreign, federal, state, local or other taxes of any
      kind (together with any and all interest, penalties, additions to tax and
      additional amounts imposed with respect thereto) imposed by any Governmental
      Entity, including taxes on or with respect to income, franchises, windfall
      or
      other profits, gross receipts, property, sales, use, capital stock, unclaimed
      property, payroll, employment, unemployment, social security, workers’
compensation or net worth, taxes in the nature of excise, withholding, ad
      valorem or value added, and any obligations with respect to such amounts arising
      as a result of being a member of an affiliated, consolidated, combined or
      unitary group for any period or under any agreements or arrangements with any
      other person and including any liability for taxes of a predecessor entity,
      and
      (ii) “Tax
      Return”
means
      any return, report or similar filing (including the attached schedules) required
      to be filed with respect to Taxes, including any information return, claim
      for
      refund, amended return or declaration of estimated Taxes.

     

    
      
        
        

      

      
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    (c) SCR-Tech
      has been since February 20, 2004, and is currently treated as a corporation
      for
      all Taxes and Tax Return purposes.

     

    3.11 Labor
      Matters.
      (a) As of the date hereof, (i) there are no strikes or lockouts with
      respect to any Business Employees and, (ii) to the knowledge of Seller,
      there is no union organizing effort pending against the Business or with respect
      to any Business Employees, (iii) there is no unfair labor practice, labor
      dispute (other than routine individual grievances) or labor arbitration
      proceeding pending against the Business, and (iv) there is no slowdown, or
      work stoppage in effect with respect to Business Employees and (b) the
      Acquired Companies and, with respect to the Business, Seller, are in compliance
      in all material respects with all applicable Laws respecting (i) employment
      and employment practices, (ii) terms and conditions of employment and wages
      and hours and (iii) unfair labor practices. There has been no “mass layoff”
or “plant closing” as defined under the Worker Adjustment and Retraining Act of
      1988 with respect to the Business as a result of any action taken by Seller
      (other than at the written direction of Buyer or as a result of any of the
      transactions contemplated hereby) within the past six (6) months. No Acquired
      Company has entered into any collective bargaining agreement or union contract
      recognizing any labor organization as the bargaining agent of any Business
      Employees.

     

    3.12 Intellectual
      Property.
      

     

    (a) Section
      3.12(a)
      of the
      Seller Disclosure Schedules sets forth a true and complete list of all (i)
      Registered Intellectual Property owned by the Acquired Companies as of the
      date
      of this Agreement (“Acquired
      Companies Registered Intellectual Property”),
      indicating for each item the registration or application number and the
      applicable filing jurisdiction and (ii) all Contracts to which Seller or an
      Acquired Company is a party granting rights to Seller or the Acquired Companies
      to use third party Intellectual Property with respect to the Business (except
      “shrink wrap” or “click wrap” contracts, and other inbound licenses for
      generally commercially available software for which Seller or an Acquired
      Company has paid less than $50,000, but including nonassertion and similar
      agreements with respect to third party Intellectual Property) or granting rights
      to third parties to use Business Intellectual Property owned by the Acquired
      Companies (except licenses granted by the Acquired Companies in the ordinary
      course of business in connection with the Acquired Companies’ products or
      services, but including non-assertion or similar agreements with respect to
      Business Intellectual Property). The Acquired Companies exclusively own
      (beneficially, and of record where applicable) all Business Intellectual
      Property, free and clear of all Liens other than Permitted Liens, exclusive
      licenses and non-exclusive licenses granted outside of the ordinary course
      of
      business. The Acquired Companies Registered Intellectual Property is subsisting
      and unexpired and has not been abandoned, and is valid and enforceable, and
      all
      filing, renewal or other fees therefor due on or before the Closing Date have
      been or will be timely and fully paid, and is not subject to any outstanding
      order of any Governmental Entity adversely affecting the Acquired Companies’ use
      thereof or their rights thereto. The Acquired Companies have timely responded
      to
      all office actions or other comments, actions or filings of any kind made by
      any
      Governmental Entities with respect to any IP Application. To Seller’s knowledge,
      neither the Acquired Companies nor any officer, employee or agent of the
      Acquired Companies have, in connection with the filing or prosecution of any
      Patent Application owned by the Acquired Companies, made an untrue statement
      of
      a material fact or fraudulent statement to any Governmental Entity, failed
      to
      disclose a material fact required to be disclosed to any Governmental Entity,
      or
      committed an act, made a statement, or failed to make a statement that would
      provide a basis to invalidate or hold unenforceable any Patent Application,
      if
      and when granted. All files for all Acquired Companies Registered Intellectual
      Property or IP Applications owned by the Acquired Companies are true, accurate
      and complete in all material respects. The Business Intellectual Property and
      the Licensed Intellectual Property include all the Intellectual Property owned
      by or licensed to the Acquired Companies and material to the operation of the
      Business as presently conducted. All of the Business Intellectual Property
      shall
      survive materially unchanged the consummation of the transactions contemplated
      by this Agreement. The conduct of the Business as currently conducted does
      not
      infringe or otherwise violate in any material respect, and the Acquired
      Companies have not infringed or otherwise violated in any material respect,
      the
      Intellectual Property rights of any third party during the five-year period
      immediately preceding the date of this Agreement. There is no material
      litigation, opposition, cancellation, proceeding, objection or claim pending,
      or
      asserted or threatened in writing, against the Acquired Companies concerning
      the
      ownership, validity, registerability, enforceability, infringement or use of,
      or
      licensed right to use, any Intellectual Property. To Seller’s knowledge, no
      person is violating any Business Intellectual Property right or other material
      Intellectual Property right that the Acquired Companies hold exclusively. The
      Acquired Companies have performed all material obligations imposed on them
      with
      respect to Licensed Intellectual Property, have made all payments required
      to
      date, and are not, nor is another party thereto, in breach or default thereunder
      in any respect, nor is there any event which with notice or lapse of time or
      both would constitute a default or breach thereunder.

     

    
      
        
        

      

      
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    (b) To
      Seller’s knowledge, the Acquired Companies have taken reasonable and necessary
      measures to protect the confidentiality of all Trade Secrets that are owned
      or
      used by the Acquired Companies and are material to the Business and the status
      of such Trade Secrets as “trade secrets” under all applicable Law. To Seller’s
      knowledge, except as would not be material to the Business, such Trade Secrets
      have not been used, disclosed to or discovered by any person except pursuant
      to
      valid non-disclosure and/or license agreements which have not been breached.
      To
      Seller’s knowledge, none of the Acquired Companies’ current employees,
      consultants and contractors has any patents issued or applications pending
      for
      any device, process, design or invention of any kind now used or needed by
      the
      Acquired Companies in the furtherance of the Business, which patents or
      applications have not been assigned to or licensed by the Acquired Companies.
      Substantially all of the Acquired Companies’ current and prior employees,
      consultants and contractors have executed valid Intellectual Property and
      confidentiality agreements for the benefit of the Acquired Companies,
      substantially in accordance with forms which the Acquired Companies have prior
      to the date of this Agreement made available to Buyer for its review, except
      such employees, consultants and contractors who do not perform tasks likely
      to
      result in the creation of material Intellectual Property.

     

    (c) Consummation
      of the transaction contemplated by this Agreement will not trigger any
      modification, termination or acceleration under, or create any license or
      similar Lien on Intellectual Property owned or held by Buyer or its affiliates,
      except to the extent that such license or Lien may be created as a result of
      a
      Contract entered into by Buyer or its affiliates. The Acquired Companies have
      not granted any exclusive or non-exclusive rights to the use of any Business
      Intellectual Property to third parties except with respect to the material
      Contracts listed in Section
      3.15
      of the
      Seller Disclosure Schedules and confidentiality and non-disclosure agreements.
      To Seller’s knowledge, the Acquired Companies’ rights to the Licensed
      Intellectual Property are valid, subsisting and enforceable and are not subject
      to any outstanding order, judgment, decree or agreement adversely affecting
      the
      Acquired Companies’ use thereof or its rights thereto.

     

    
      
        
        

      

      
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    (d) The
      IT
      Assets generally operate and perform as required by the Acquired Companies
      in
      connection with its business, and have not malfunctioned or failed within the
      past three years in a manner which has materially reduced the overall
      functionality of the IT Assets as a whole, other than isolated failures or
      outages that have been corrected. To Seller’s knowledge, the IT Assets do not
      contain any “time bombs,” “Trojan horses,” “backdoors,” “trap doors,” “worms,”
viruses or other similar devices or effects that (i) enable or assist any person
      to access without authorization the IT Assets, or (ii) otherwise significantly
      adversely affect the functionality of the IT Assets, except as disclosed in
      its
      documentation. To Seller’s knowledge, no person has gained material unauthorized
      access to the IT Assets. To Seller’s knowledge, none of the IT Assets contains
      any shareware, open source code, or other software whose use, as used by the
      Acquired Companies, requires disclosure or licensing of any Business
      Intellectual Property. The Acquired Companies have implemented reasonable backup
      and disaster recovery technology.

     

    3.13 Real
      Property.
      Section 3.13
      of the
      Seller Disclosure Schedules sets forth a complete list of all real property
      leased for occupancy by the Acquired Companies (the “Acquired
      Company Real Property”),
      true
      and correct copies of which have been previously made available to Parent or
      Buyer. Each
      occupancy agreement for leased Acquired Company Real Property (each, an
“Acquired
      Material Lease”)
      is
      valid and enforceable. No Acquired Company is in default in any material respect
      under the terms of any Acquired Material Lease and, to the knowledge of Seller,
      no other party to any Acquired Material Lease is in default under the terms
      of
      any Acquired Material Lease. Each Acquired Material Lease is a valid and binding
      obligation of an Acquired Company and, to the knowledge of Seller, of each
      other
      party thereto, and is in full force and effect, except that (i) such
      enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
      moratorium or other similar Laws, now or hereafter in effect, relating to
      creditors’ rights generally and (ii) equitable remedies of specific
      performance and injunctive and other forms of equitable relief may be subject
      to
      equitable defenses and to the discretion of the court before which any
      proceeding therefor may be brought.
      The
      Acquired Companies do not own any real property.

     

    
      
        
        

      

      
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    3.14 Title
      to Assets.
      All
      assets owned by the Acquired Companies are owned free and clear of all Liens
      other than Permitted Liens.

     

    3.15 Material
      Contracts.

     

    (a) Section 3.15
      of the
      Seller Disclosure Schedules sets forth all of the following Contracts to which
      (x) any Acquired Company is a party or by which any of them are bound, and
      (y)
      Seller is a party or by which it is bound and pursuant to which Seller has
      or
      may have any obligations or liabilities that are or will become Assumed
      Liabilities, excluding in all cases of clauses (x) and (y) the Acquired Material
      Leases (collectively, the “Business
      Material Contracts”):

     

    (i) Contracts
      with any labor union or association representing any Business
      Employee;

     

    (ii) Contracts
      for joint ventures, strategic alliances or partnerships;

     

    (iii) Contracts
      containing covenants of any of the Acquired Companies or, with respect to the
      Business, Seller, not to compete in any line of business or with any person
      in
      any geographical area or not to solicit or hire any person with respect to
      employment;

     

    (iv) Contracts
      relating to the acquisition (by merger, purchase of stock or assets or
      otherwise) by any of the Acquired Companies of any operating business or
      material assets or the capital stock of any other person;

     

    (v) Contracts
      relating to the incurrence, assumption or guarantee of any indebtedness or
      imposing a Lien on any of the assets of the Acquired Companies, including
      indentures, guarantees, loan or credit agreements, sale and leaseback
      agreements, purchase money obligations incurred in connection with the
      acquisition of property, mortgages, pledgeagreements,
      security agreements,
      or
      conditional sale or title retention agreements;

     

    (vi) purchase
      Contracts giving rise to liabilities of any of the Acquired Companies in excess
      of $25,000 individually;

     

    (vii) all
      Contracts providing for payments by or to any of the Acquired Companies in
      excess of $25,000 in any fiscal year;

     

    (viii) Contracts
      under which any of the Acquired Companies has made loans to any other person
      (other than advances to Business Employees for business expenses in the ordinary
      course of business);
      or

     

    (ix) Contracts
      providing for severance, retention, change in control or other similar
      payments.

     

    
      
        
        

      

      
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    (b) No
      Acquired Company, and to the knowledge of Seller, no other party to any Business
      Material Contract, is in breach of or default under the terms of any Business
      Material Contract, except for breaches or defaults that would not, individually
      or in the aggregate, have a material adverse effect on the Business. Each
      Business Material Contract is a valid and binding obligation of an Acquired
      Company and, to the knowledge of Seller, of each other party thereto, and is
      in
      full force and effect, except that (i) such enforcement may be subject to
      applicable bankruptcy, insolvency, reorganization, moratorium or other similar
      Laws, now or hereafter in effect, relating to creditors’ rights generally and
      (ii) equitable remedies of specific performance and injunctive and other
      forms of equitable relief may be subject to equitable defenses and to the
      discretion of the court before which any proceeding therefor may be
      brought. 

     

    3.16 Insurance.
      All
      insurance policies (including fire, liability, product liability, workers’
compensation and vehicular) presently in effect that relate to the Acquired
      Companies or the Business are sufficient for compliance by the Acquired
      Companies with all applicable Laws and all Business Material Contracts. None
      of
      the insurance carriers for such policies has given written notice to the
      Acquired Companies of an intention to cancel any such policy or to materially
      increase any insurance premiums (including workers’ compensation premiums), or
      that any such insurance will not be available in the future on substantially
      the
      same terms as currently in effect. Neither Seller nor the Acquired Companies
      has
      any claim pending against any of its insurance carriers under any of such
      policies and, to the knowledge of Seller, there has been no actual or alleged
      occurrence of any kind which could reasonably be expected to give rise to any
      such claim. During the prior three years, all notices required to have been
      given by the Acquired Companies to any insurance company have been timely and
      duly given, and no insurance company has asserted that any claim is not covered
      by the applicable policy relating to such claim.

     

    3.17 Equipment
      and Other Tangible Property.
      The
      Acquired Companies’ equipment, furniture, machinery, vehicles, structures,
      fixtures and other tangible property, other than inventory, is suitable for
      the
      purposes for which intended and is in operating condition consistent with normal
      industry standards, except for ordinary wear and tear, and except for such
      properties as shall have been taken out of service on a temporary basis for
      repairs or replacement consistent with the Acquired Companies’ prior practices
      and normal industry standards. Such properties are free of any material
      structural or engineering defects, and during the past five years there has
      not
      been any significant interruption of the Business due to inadequate maintenance
      or obsolescence of such properties.

     

    3.18 Suppliers
      and Customers.
      The
      Acquired Companies maintain good relations with all of their material suppliers
      and customers as well as with governments, partners, financing sources and
      other
      parties with whom the Acquired Companies have significant relations, and no
      such
      party has canceled, terminated or, or to Seller’s knowledge, made any threat to
      the Acquired Companies to cancel or otherwise terminate its relationship with
      the Acquired Companies or to materially decrease its services or supplies to
      the
      Acquired Companies or its direct or indirect purchase or usage of the products
      or services of the Acquired Companies. Notwithstanding the foregoing, Seller
      has
      disclosed to Parent and Buyer that the customers of the Acquired Companies
      are
      not parties to any long-term supply, purchase or other written agreements with
      any of the Acquired Companies, that such customers only acquire goods and
      services from the Acquired Companies by means of purchase orders and that there
      is no obligation of any such customers to continue purchasing goods and services
      from the Acquired Companies.

     

    
      
        
        

      

      
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    3.19 Absence
      of Certain Business Practices.
      None of
      the Acquired Companies or any affiliate or, to the knowledge of Seller, any
      agent of the Acquired Companies, or any other person acting on behalf of or
      associated with the Acquired Companies, acting alone or together, has (a)
      received, directly or indirectly, any rebates, payments, commissions,
      promotional allowances or any other economic benefits, regardless of their
      nature or type, from any customer, supplier, employee or agent of any customer
      or supplier; or (b) directly or indirectly given or agreed to give any money,
      gift or similar benefit to any customer, supplier, employee or agent of any
      customer or supplier, any official or employee of any government (domestic
      or
      foreign), or any political party or candidate for office (domestic or foreign),
      or other person who was, is or may be in a position to help or hinder the
      business of the Acquired Companies (or assist the Acquired Companies in
      connection with any actual or proposed transaction), in each case of (a) and
      (b)
      which (i) may subject the Acquired Companies to any damage or penalty in any
      civil, criminal or governmental litigation or proceeding, (ii) if not given
      in
      the past, may have had an adverse effect on the assets, business or operations
      of the Acquired Companies, or (iii) if not continued in the future, may
      adversely affect the Business.

     

    3.20 Transactions
      with Affiliates.
      Except
      as set forth in the forms, reports and documents required to be filed by Seller
      with the SEC pursuant to the Securities Act of 1933, as amended (the “Securities
      Act”)
      and
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)
      (the
“Seller
      SEC Documents”),
      and
      except for normal advances to employees consistent with past practices, payment
      of compensation for employment and board services to employees and directors,
      respectively, in each case, consistent with past practices, and participation
      in
      scheduled Benefit Plans by employees and directors, the Acquired Companies
      have
      not purchased, acquired or leased any property or services from, or sold,
      transferred or leased any property or services to, or loaned or advanced any
      money to, or borrowed any money from, or entered into or been subject to any
      management, consulting or similar agreement with, or engaged in any other
      significant transaction with any officer, director or stockholder of the
      Acquired Companies or any of their respective affiliates. Except as set forth
      in
      the Seller SEC Documents, no affiliate of the Acquired Companies is indebted
      to
      the Acquired Companies for money borrowed or other loans or advances, and the
      Acquired Companies are not indebted to any such affiliate.

     

    3.21 No
      Other Assets.
      Other
      than (i) insurance policies held by or for the benefit of Seller and any rights,
      claims or causes of action under such insurance policies and (ii) Benefit Plan
      assets held by Seller, as of the Closing Date there shall be no assets held
      by
      Seller necessary for Buyer to conduct the Business as it is now being
      conducted.

     

    3.22 No
      Business Material Adverse Effect.
      Since
      the date of the Business Financial Statements, no Business Material Adverse
      Effect has occurred.

     

    
      
        
        

      

      
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    ARTICLE 4

     

    REPRESENTATIONS
      AND WARRANTIES OF SELLER CONCERNING ITSELF

     

    Except
      as
      disclosed in the Seller Disclosure Schedules, Seller represents and warrants
      to
      Buyer as follows:

     

    4.1 Organization.
      Seller
      is
      a legal entity duly organized, validly existing and in good standing under
      the
      Laws of the State of Delaware.

     

    4.2 Corporate
      Authority Relative to this Agreement; No Violation.

     

    (a) Seller
      has all requisite corporate power and authority to enter into this Agreement
      and
      the Ancillary Agreement to be executed and delivered by Seller and to consummate
      the transactions contemplated hereby and thereby. The execution and delivery
      of
      this Agreement and the Ancillary Agreement to be executed and delivered by
      Seller and the consummation of the transactions contemplated hereby and thereby
      have been duly and validly authorized by the board of directors of Seller,
      and
      no other corporate proceedings on the part of Seller are necessary to authorize
      the consummation of the transactions contemplated hereby and thereby, including
      the approval by Renegy of the transactions contemplated hereby as sole
      stockholder of Seller. This Agreement has been duly and validly executed and
      delivered by Seller, and the Ancillary Agreement to be executed and delivered
      by
      Seller will, as of the Closing, have been, duly and validly executed and
      delivered by Seller and, assuming this Agreement constitutes the valid and
      binding agreement of Buyer and the Ancillary Agreement constitutes the valid
      and
      binding agreement of the other parties thereto, this Agreement constitutes,
      and
      as of the Closing, the Ancillary Agreement to be executed by Seller will
      constitute, the valid and binding agreement of Seller, enforceable against
      Seller in accordance with its terms.

     

    (b) No
      authorization, consent or approval of, or filing with, any Governmental Entity
      is necessary, under applicable Law, for the consummation by Seller of the
      transactions contemplated by this Agreement and the Ancillary
      Agreement.

     

    
      
        
        

      

      
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    (c) The
      execution and delivery by Seller of this Agreement and the Ancillary Agreement
      do not, and, except as described in Section 4.2(b),
      the
      consummation of the transactions contemplated hereby and thereby and compliance
      with the provisions hereof and thereof will not (i) result in any violation
      of, or default (with or without notice or lapse of time, or both) under, or
      give
      rise to a right of termination, cancellation or acceleration of any material
      obligation or to the loss of a benefit under any loan, guarantee of indebtedness
      or credit agreement, note, bond, mortgage, indenture, lease, agreement,
      contract, instrument, permit, concession, franchise, right or license binding
      upon Seller or the Acquired Companies or result in the creation of any
      liens, claims, mortgages, encumbrances, pledges, security interests, equities
      or
      charges of any kind (each, a “Lien”),
      other
      than any such Lien (A) for Taxes or governmental assessments, charges or
      claims of payment not yet due, being contested in good faith or for which
      adequate accruals or reserves have been established, (B) which is a
      statutory carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
      other similar lien arising in the ordinary course of business, and not
      delinquent, (C) which is disclosed on the Business Balance Sheet or
      securing liabilities reflected on such Business Balance Sheet or (D) which
      was incurred in the ordinary course of business consistent with past practice
      and not in violation of this Agreement since the date of the Business Balance
      Sheet and is immaterial in amount (each of the foregoing, a “Permitted
      Lien”),
      upon
      any of the properties or assets of any Acquired Company, (ii) conflict with
      or result in any violation of any provision of the certificate of incorporation
      or by-laws or other equivalent organizational document, in each case as amended,
      of Seller or any Acquired Company, (iii) conflict with or violate any
      applicable Laws, other than, in the case of clauses (i) and (iii), any such
      violation, conflict, default, termination, cancellation, acceleration, right,
      loss or Lien that would not have, individually or in the aggregate, a material
      adverse effect on the Business and would not materially impair or delay the
      consummation of the transactions contemplated hereby.

     

    4.3 Finders
      or Brokers.
      Except
      for Hadley
      Partners, Incorporated,
      whose
      fees and commissions will be the sole responsibility of Seller, Seller has
      not
      employed any investment banker, broker or finder in connection with the
      transactions contemplated by this Agreement who might be entitled to any fee
      or
      any commission in connection with or upon consummation of the transactions
      contemplated hereby. 

     

    4.4 No
      Additional Representations.
      Other
      than the representations and warranties expressly set forth in Article 3
      and this
Article 4,
      Seller
      shall not be deemed to have made any other representation or warranty in
      connection with this Agreement or the transactions contemplated
      hereby.

     

    4.5 Financial
      Statements Included in SEC Filings.
      Each of
      the audited consolidated financial statements and unaudited interim financial
      statements of Seller included (or incorporated by reference) in the Seller
      SEC
      Documents filed with the SEC on or after December 31, 2005, including the
      audited financial statements of Seller as of and for the year ended
      December 31, 2006, has been prepared in accordance with GAAP applied on a
      consistent basis during the periods involved (except as may be indicated in
      the
      notes thereto), is accurate and complete in all material respects and fairly
      presents in all material respects the consolidated financial position of Seller
      and its Subsidiaries (including the Acquired Companies) as of the dates thereof
      and the consolidated results of Seller’s operations and the changes in Seller’s
      consolidated financial position for the periods then ended, in the case of
      the
      unaudited interim financial statements subject to the absence of footnotes
      and
      year end audit adjustments which will not, individually or in the aggregate,
      be
      material in magnitude. Such unaudited interim financial statements reflect
      all
      adjustments necessary to fairly present, in all material respects, the results
      of operations for the interim periods presented. 

     

    
      
        
        

      

      
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    ARTICLE 5

     

    REPRESENTATIONS
      AND WARRANTIES OF PARENT AND BUYER

     

    Parent
      and Buyer each jointly and severally represents and warrants to Seller
      that:

     

    5.1 Organization.
      Parent
      and Buyer each is a legal entity duly organized, validly existing and in good
      standing under the Laws of the State of Delaware. Parent currently owns all
      of
      the outstanding capital stock of Buyer, and at the Closing Parent will own
      no
      less than a majority of the then outstanding capital stock of
      Buyer.

     

    5.2 Corporate
      Authority Relative to this Agreement; No Violation.

     

    (a) Parent
      and Buyer each has all requisite corporate power and authority to enter into
      this Agreement and the Ancillary Agreement, and to consummate the transactions
      contemplated hereby and thereby. The execution and delivery of this Agreement
      and the Ancillary Agreement to be executed and delivered by Parent and Buyer,
      and the consummation of the transactions contemplated hereby and thereby have
      been duly and validly authorized by the board of directors of each of Parent
      and
      Buyer, and no other corporate proceedings on the part of Parent or Buyer are
      necessary to authorize the consummation of the transactions contemplated hereby
      and thereby. This Agreement has been, and the Ancillary Agreement to be executed
      and delivered by Parent and Buyer will be, duly and validly executed and
      delivered by Parent or Buyer, as the case may be, and, assuming this Agreement
      and Ancillary Agreement constitute the valid and binding agreement of Seller,
      this Agreement constitutes, and as of the Closing, the Ancillary Agreement
      will
      constitute, the valid and binding agreement of Parent or Buyer, as the case
      may
      be, enforceable against Parent or Buyer in accordance with its
      terms.

     

    (b) Other
      than in connection with or in compliance with (i) the Delaware General
      Corporation Law, (ii) the Securities Act, and (iii) the Exchange Act,
      no authorization, consent or approval of, or filing with, any Governmental
      Entity is necessary, under applicable Law, for the consummation by Parent and
      Buyer of the transactions contemplated by this Agreement and the Ancillary
      Agreement, except for such authorizations, consents, approvals or filings,
      that,
      if not obtained or made, would not materially impair or delay the consummation
      of the transactions contemplated hereby.

     

    (c) The
      execution and delivery by Parent and Buyer of this Agreement and the Ancillary
      Agreement does not, and, except as described in Section 5.2(b),
      the
      consummation of the transactions contemplated hereby and thereby and compliance
      with the provisions hereof and thereof will not (i) result in any violation
      of, or default (with or without notice or lapse of time, or both) under, or
      give
      rise to a right of termination, cancellation or acceleration of any material
      obligation or to the loss of a material benefit under any loan, guarantee of
      indebtedness or credit agreement, note, bond, mortgage, indenture, lease,
      agreement, contract, instrument, permit, concession, franchise, right or license
      binding upon Parent, Buyer or any of their respective Subsidiaries,
      (ii) conflict with or result in any violation of any provision of the
      certificate of incorporation or by-laws or other equivalent organizational
      document, in each case as amended, of Parent, Buyer or any of their respective
      Subsidiaries or (iii) conflict with or violate any applicable Laws, other
      than, in the case of clauses (i) and (iii), any such violation, conflict,
      default, termination, cancellation, acceleration, loss or Lien that would not
      materially impair or delay the consummation of the transactions contemplated
      hereby.

     

    
      
        
        

      

      
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    5.3 Investigations;
      Litigation.
      As of
      the date hereof, (a) there is no investigation or review pending by any
      Governmental Entity with respect to Parent, Buyer or any of their respective
      Subsidiaries, and (b) there are no actions, suits, inquiries, claims,
      investigations or proceedings pending against or affecting Parent, Buyer or
      any
      of their respective Subsidiaries, or any of their respective properties at
      law
      or in equity before, and there are no orders, judgments or decrees of, or
      before, any Governmental Entity or arbitrator, in each case of clauses (a)
      or
      (b), which would materially impair or delay the consummation of the transactions
      contemplated hereby.

     

    5.4 Finders
      or Brokers.
      Except
      for Stephens Inc., neither Parent, Buyer nor any of their respective
      Subsidiaries has employed any investment banker, broker or finder in connection
      with the transactions contemplated by this Agreement who might be entitled
      to
      any fee or any commission in connection with or upon consummation of the
      transactions contemplated hereby.

     

    5.5 Investment
      Intent.
      Buyer
      is acquiring the Shares not with a view to their distribution within the meaning
      of Section 2(a)(11) of the Securities Act.
      Buyer
      is an “accredited investor” as defined in Rule 501(a) of the Securities
      Act. Buyer has substantial experience in evaluating and investing in private
      placement transactions of securities in companies similar to the Acquired
      Companies and acknowledges that Buyer can protect its own interests. Buyer
      has
      such knowledge and experience in financial and business matters so that Buyer
      is
      capable of evaluating the merits and risks of its investment in the Acquired
      Companies. Buyer has had an opportunity to ask questions of, and receive answers
      from, the officers of Seller and the Acquired Companies concerning this
      Agreement, the exhibits and schedules attached hereto and thereto and the
      transactions contemplated hereby and thereby, as well as Seller’s and the
      Acquired Companies’ respective businesses, management and financial affairs,
      which questions were answered to Buyer’s satisfaction. Buyer believes that it
      has received all the information Buyer considers necessary or appropriate for
      deciding whether to purchase the Shares. Buyer also hereby acknowledges that
      it
      is relying solely on its own counsel and not on any statements or
      representations of Seller or its agents for legal advice with respect to the
      purchase of the Shares or the transactions contemplated hereby.

     

    5.6 Solvency.
      Assuming the accuracy of the representations and warranties contained in
Article 3
      and
Article 4,
      immediately after giving effect to the transactions contemplated by this
      Agreement (including any financing in connection with the transactions
      contemplated hereby), (a) neither Parent nor Buyer will have incurred debts
      beyond its ability to pay such debts as they mature or become due and the then
      present fair salable value of the assets of Parent or Buyer, as the case may
      be,
      will exceed the amount that will be required to pay its respective probable
      liabilities (including the probable amount of all contingent liabilities) and
      its respective debts as they become absolute and matured, (b) the assets of
      Parent and Buyer, at a fair valuation, will exceed its respective debts
      (including the probable amount of all contingent liabilities) and
      (c) neither Parent nor Buyer will have unreasonably small capital to carry
      on its business as presently conducted or as proposed to be conducted. No
      transfer of property is being made and no obligation is being incurred in
      connection with the transactions contemplated hereby with the intent to hinder,
      delay or defraud creditors of Seller or any of its Subsidiaries, including
      any
      Acquired Company. 

     

    
      
        
        

      

      
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    5.7 Financing.
      Buyer
      has available on the Closing Date sufficient funds to enable it to consummate
      the transactions contemplated hereby and the Ancillary Agreement.

     

    5.8 Operations
      of Buyer.
      Parent
      caused Buyer to be formed solely for the purpose of engaging in the transactions
      contemplated hereby, and prior to Closing, Buyer will be inactive and will
      not
      have engaged in any business activities and will conduct activities only as
      contemplated hereby.

     

    ARTICLE 6

     

    COVENANTS

     

    6.1 Confidentiality.
      The
      parties acknowledge that SCR-Tech, on behalf of Seller, and Parent have
      previously executed a Confidentiality Agreement dated as of May 23, 2007 (the
      “Confidentiality
      Agreement”),
      which
      Confidentiality Agreement will continue in full force and effect in accordance
      with its terms, and each of the parties hereto agrees to be bound by the terms
      of the Confidentiality Agreement (as if a party thereto if not already a party
      thereto) and to hold, and will cause its respective directors, officers,
      employees, agents and advisors (including attorneys, accountants, consultants,
      bankers and financial advisors) to hold, any Evaluation Material (as defined
      in
      the Confidentiality Agreement) confidential in accordance with the terms of
      the
      Confidentiality Agreement (provided
      that
      Parent’s obligations thereunder shall terminate at Closing with regard to
      confidential information of the Acquired Companies and the
      Business).

     

    6.2 Tax
      Matters.

     

    (a) Responsibility
      for Certain Taxes.
      Seller
      shall indemnify and hold the Buyer
      Indemnified Parties harmless against any Taxes imposed on or with respect to
      any
      Acquired Company with respect to any taxable period (or portion thereof) ending
      on or before the Closing Date (each, a “Pre-Closing
      Tax Period”)
      and
      any Losses arising therefrom, except to the extent such Taxes or Losses have
      been reflected as a liability on the Statement of Working Capital. In the case
      of any taxable period that includes (but does not end on) the Closing Date
      (each, a “Straddle
      Period”),
      (i) the portion of any real, personal and intangible property or ad valorem
      Taxes (“Property
      Taxes”)
      imposed upon any Acquired Company that is allocable to the Pre-Closing Tax
      Period shall be equal to the amount of such Property Taxes for the entire
      Straddle Period that are in the Pre-Closing Tax Period and the denominator
      of
      which is the number of days in the Straddle Period, and (ii) the portion of
      any Taxes other than Property Taxes imposed upon
      any
      Acquired Company
      that is
      allocable to the Pre-Closing Tax Period shall be computed as if such taxable
      period ended on the Closing Date; provided,
      however,
      that
      exemptions, allowances or deductions that are calculated on an annual basis
      (including depreciation and amortization deductions), other than with respect
      to
      property placed in service after the Closing, shall be allocated between the
      period ending on the Closing Date and the period after the Closing Date in
      proportion to the number of days in each period.
      Buyer
      shall indemnify and hold Seller harmless against any and all liabilities,
      obligations or commitments, whether or not accrued, assessed or currently due
      and payable for any Taxes imposed on any Acquired Company or the Business that
      are not the responsibility of Seller pursuant to this Section 6.2(a).

     

    
      
        
        

      

      
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    (b) Tax
      Returns.
      Buyer
      shall be responsible for the preparation and filing of any Tax Return of or
      with
      respect to any Acquired Company that is required to be filed after the Closing
      Date, other than any Tax Return for any Tax asset or Tax liability relating
      to
      income, franchise or similar Taxes of (i) Seller with respect to any
      taxable period (or portion thereof) or (ii) any Acquired Company with
      respect to a Pre-Closing Tax Period (each, a “Pre-Closing
      Income Tax Return”).
      To
      the extent that Buyer is required to remit any Taxes that are the responsibility
      of Seller pursuant to Section 6.2(a),
      Seller
      shall pay to Buyer any such Taxes at least ten (10) days prior to the due date
      for payment of such Taxes. Seller shall be responsible for the preparation
      and
      filing of any Tax Return with respect to any Acquired Company or the Business
      that is required to be filed on or before the Closing Date and any Pre-Closing
      Income Tax Return, including in each case any amended Tax Return, and each
      such
      Tax Return shall be true and correct in all material respects, completed in
      accordance with applicable Law, and consistent with past practice. To the extent
      that Seller is required to remit any Taxes that are the responsibility of Buyer
      pursuant to Section 6.2(a),
      Buyer
      shall pay to Seller any such Taxes at least ten (10) days prior to the due
      date
      for payment of such Taxes. 

     

    (c) Tax
      Contests.
      Seller
      shall control and bear the cost of the conduct of any audit, claim, dispute
      or
      controversy (“Tax
      Contest”)
      relating to any Tax for which Seller is responsible pursuant to Section 6.2(a),
      provided
      that
      Buyer shall be entitled to participate, at its own expense, in any Tax Contest
      involving a Straddle Period. Buyer shall control all other Tax Contests relating
      to any
      Acquired Company.

     

    (d) Refunds
      and Credits; Waiver of Carrybacks.
      Any
      refund or credit with respect to Taxes described in Section 6.2(a)
      that are
      the responsibility of Seller
      shall
      be
      for the account of Seller, except to the extent such refund or credit is
      reflected as an asset on the Statement of Working Capital, and if Buyer or
      any
      Acquired Company receives or becomes entitled to any refund or credit that
      relates to such Taxes, Buyer shall pay Seller the amount of any such refund
      or
      the value of such credit (in each case, net of any taxes incurred by Buyer
      with
      respect thereto). All other refunds and credits shall be for the account of
      Buyer, and if Seller receives any such refund or credit, Seller shall pay to
      Buyer the amount of any such refund or the value of such credit (in each case,
      net of any taxes incurred by Seller with respect thereto). To the extent
      permitted by applicable Law, Buyer shall (or shall cause or permit each Acquired
      Company to) elect to relinquish any carryback of a Tax attribute to any taxable
      period or portion thereof ending on or before the Closing Date. In cases where
      Buyer cannot elect to relinquish such carrybacks, neither Seller nor any of
      its
      Subsidiaries shall have any obligation to pay to Buyer any Tax refund or other
      amount resulting from a carryback of a post-acquisition Tax attribute of any
      Acquired Company into a Tax Return for a Pre-Closing Tax Period. 

     

    (e) Cooperation.
      The
      parties to this Agreement shall provide
      assistance to each other as reasonably requested in preparing and filing Tax
      Returns and responding to Tax Contests, provide
      reasonably detailed notice of any Tax Contest sufficient to apprise the other
      party of the nature of the claim, make available to each other as reasonably
      requested all relevant information, records, and documents, including
      workpapers, relating to Taxes of any Acquired Company or the Business
      and
      retain
      any books and records that could reasonably be expected to be necessary or
      useful in connection with any preparation by any other party of any Tax Return
      or for any Tax Contest. 

     

    
      
        
        

      

      
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    (f) Tax
      Sharing Agreements.
      Any Tax
      sharing or Tax allocation agreement between one or more of the Acquired
      Companies and Seller or any of its Subsidiaries (other than the Acquired
      Companies) shall be terminated prior to the Closing, and no payments shall
      be
      made thereunder on or after the Closing Date. 

     

    (g) Survival;
      Conflicts.
      Notwithstanding anything to the contrary contained herein, the obligations
      pursuant to this Section 6.2
      and
Section 6.4
      shall
      survive until the applicable statute of limitations with respect to the Tax
      Liabilities in question. In the event of a conflict between the provisions
      of
      this Section 6.2
      or
Section 6.4,
      as
      applicable, and any other Section of this Agreement, Section 6.2
      or
Section 6.4,
      as
      applicable, shall govern and control.

     

    6.3 Public
      Announcements.
      Parent
      and Seller will consult with and provide each other the opportunity to review
      and comment upon any press release relating to this Agreement or the
      transactions contemplated herein or, to the extent practicable, any other public
      statement relating to this Agreement or the transactions contemplated herein
      made by Parent or Seller or their respective Subsidiaries prior to the issuance
      of such press release or, to the extent practicable, other public statement
      and
      shall not issue any such press release or, to the extent practicable, other
      public statement prior to such consultation, except as may be required by
      applicable Law or by obligations pursuant to any listing agreement with any
      national securities exchange or market.

     

    6.4 Transaction
      Costs.
      Except
      as otherwise indicated in this Section
      6.4,
      each of
      Parent and Buyer shall pay all transaction costs and expenses (including legal,
      accounting and other professional fees and expenses and other fees described
      in
Section 5.4 with
      respect to Parent, Buyer and their respective Subsidiaries) that it incurs
      in
      connection with the negotiation, execution and performance of this Agreement
      and
      the consummation of the transactions contemplated hereby. Parent shall pay
      all
      amounts required to be paid by Parent pursuant to Section
      10.7.
      Seller
      shall pay all transaction costs and expenses (including legal, accounting and
      other professional fees and expenses and other fees described in Section 4.3)
      that it
      incurs in connection with the negotiation, execution and performance of this
      Agreement and the consummation of the transactions contemplated hereby.
      Notwithstanding the foregoing and anything to the contrary contained in this
      Agreement, Parent and/or Buyer shall be responsible for and pay any transfer
      Taxes (including stock transfer, sales, use value-added, ad valorem and deed
      Taxes) and the fees and costs of recording or filing any applicable conveyancing
      instruments associated with the transactions contemplated by this Agreement
      (“Transfer
      Taxes”).
      Seller and Buyer shall cooperate in the preparation, execution and filing of
      all
      Tax Returns regarding any Transfer Taxes that become payable as a result of
      the
      transactions contemplated by this Agreement.

     

    
      
        
        

      

      
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    6.5 Retention
      of and Access to Records.
      From
      and after the Closing, Parent and Buyer shall preserve, in accordance with
      the
      normal document retention policy of the Business, all books and records
      transferred by Seller to Buyer pursuant to this Agreement. In addition to the
      foregoing, for a period of six years following the Closing, each party shall
      afford to the other party hereto, and its counsel, accountants and other
      authorized agents and Representatives, and their respective counsel, accountants
      and other authorized agents and Representatives, during normal business hours
      and upon the execution and delivery of a confidentiality and non-disclosure
      agreement in customary form and substance (which shall include appropriate
      exceptions for disclosure relating to Tax matters), reasonable access to the
      employees, books, records and other data relating to the Acquired Companies,
      the
      Business, the Assumed Liabilities and the Business Employees in its possession,
      and the right to make copies and extracts therefrom, to the extent that such
      access may be reasonably required by the requesting party (a) to facilitate
      the investigation, litigation and final disposition of any claims which may
      have
      been or may be made against any such party or person, or its affiliates,
      (b) for the preparation of Tax Returns and audits, and (c) for any
      other reasonable business purpose. 

     

    6.6 Payments.
      From
      and after the Closing, if Seller or any of its Subsidiaries receive a payment
      of
      accounts receivable belonging to the Business, they will promptly turn such
      payment over to Buyer and if Buyer or any of its Subsidiaries receive a payment
      of accounts receivable belonging to the business of Seller or its Subsidiaries
      (other than the Acquired Companies), they will promptly turn such payment over
      to Seller. 

     

    6.7 Cooperation
      in Post-Closing Litigation.
      For a
      period of six (6) years following the Closing, each of Seller, Parent and Buyer
      will cooperate with the other in the investigation, defense or prosecution
      of
      any action, suit, inquiry, claim, investigation or proceeding which is pending,
      instituted or threatened either (a) against Parent or Buyer and which
      relates to or arises out of the Assumed Liabilities or (b) against Seller
      and which relates to or arises out of the Excluded Liabilities. The party
      seeking such cooperation will reimburse the party providing such cooperation
      for
      all reasonable expenses (including salaries of employees who are required to
      be
      absent from their employment or devote substantial amounts of time in
      satisfaction of the obligations set forth in this Section 6.7)
      incurred by the party providing such cooperation in connection with such
      cooperation.

     

    6.8 Cooperation
      as to Financial Statements.
      For a
      period of ninety (90) day from the date hereof, Seller agrees that it will
      cooperate in good faith, to the extent reasonably requested by Parent, in the
      preparation of the financial statements of the Business that are required to
      be
      filed by Parent pursuant to the Exchange Act. For a period of ninety (90) day
      from the date hereof, Buyer agrees that it will cooperate in good faith, to
      the
      extent reasonably requested by Seller or Renegy, in the preparation of any
      financial statements (including pro forma financial statements) that are
      required to be filed by Renegy pursuant to the Exchange Act, including by
      providing Seller with reasonable access to any relevant personnel, books and
      records related to the Business that are necessary in furtherance of the
      foregoing. 

     

    6.9 Return
      of Excluded Assets.
      Promptly following the Closing, and in any event within fifteen (15) days after
      the Closing Date, Parent shall (or shall cause Buyer to) remit to Seller all
      cash and cash equivalents on the general ledger of each Acquired Company or
      otherwise held by each Acquired Company, in each case, as of the Closing. The
      remittance will be treated as a return of Excluded Assets and not as an
      adjustment to the Purchase Price. If at any time within twelve (12) months
      following the Closing Date, Parent or Buyer becomes aware of any other Excluded
      Assets that were delivered to Buyer in connection with this Agreement or the
      Ancillary Agreement, Parent or Buyer, as the case may be, shall promptly notify
      Seller of the Excluded Assets in its possession, and shall return (or at
      Seller’s discretion, destroy) such Excluded Assets at Parent’s expense,
      including all copies thereof. In any case, Buyer agrees to keep and treat all
      Excluded Assets as “Evaluation Material” in accordance with the terms of the
      Confidentiality Agreement.

     

    
      
        
        

      

      
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    ARTICLE 7

     

    EMPLOYMENT
      MATTERS 

     

    7.1 Employees.
      Business Employees of Seller and its Subsidiaries who remain employed after
      the
      Closing Date shall be eligible to receive compensation and employee benefits
      under Buyer’s employee benefit plans (each a “Buyer
      Benefit Plan”)
      on the
      same basis as similarly situated active employees of Buyer and its subsidiaries;
      provided
      that
      nothing herein is intended to result in a duplication of benefits. In addition,
      each Business Employee will receive service credit for all periods of employment
      with Seller or Acquired Company or any of its subsidiaries or any predecessor
      thereof prior to the Closing Date for purposes of vesting, eligibility and
      benefit levels under any Buyer Benefit Plan in which such employee participates
      after the Closing Date, to the same extent and for the same purposes thereunder
      as such service was recognized under any analogous Seller Benefit Plan in effect
      immediately prior to the Closing Date.

     

    7.2 Welfare
      Plans. 
      

     

    (a)
       Until
      December 31, 2007, Buyer covenants that it shall (a) assume, adopt and
      maintain the medical, dental, health, pharmaceutical, and vision Benefit Plans
      of the Acquired Companies and its Subsidiaries, relating to the Business and
      listed in Section 7.2
      of the
      Seller Disclosure Schedules (the “Scheduled
      Welfare Plans”)
      and,
      accordingly, shall thereby continue in full force and effect each Scheduled
      Welfare Plan subject to the terms and conditions thereof,
      to the
      extent such Scheduled Welfare Plan is offered as of the Closing Date to the
      Business Employees and their dependents; or (b) provide all Business
      Employees and their dependents, with coverage under one or more medical, dental,
      health, pharmaceutical, and vision benefit plans of Buyer (the “Successor
      Welfare Plans”),
      including without limitation health coverage (collectively, “Coverage”),
      which
      meets the following requirements as of the Closing Date: (A) the Coverage
      is substantially identical to the coverage provided under the Scheduled Welfare
      Plans, (B) service with Seller prior to the Closing Date shall be credited
      against all service and waiting period requirements under the Successor Welfare
      Plans, (C) the Successor Welfare Plans shall not provide any pre-existing
      condition exclusions and actively-at-work requirements (except to the extent
      such exclusions or requirements were applicable under the corresponding
      Scheduled Welfare Plan), and (D) the deductibles and/or co-payments in
      effect under the Successor Welfare Plans shall be reduced by any deductibles
      and/or co-payments paid by such employee and/or his or her covered dependents
      under the Scheduled Welfare Plans for the plan year in which the Closing Date
      occurs. Notwithstanding anything to the contrary herein, Buyer covenants that
      it
      shall assume, adopt and maintain the Scheduled Welfare Plans until at least
      November 30, 2007 for the benefit of Seller and/or Renegy employees to the
      extent such Scheduled Welfare Plans are offered as of immediately prior to
      the
      Closing Date to such employees and their dependents, and, accordingly, such
      Scheduled Welfare Plans shall thereby continue in full force and effect until
      at
      least November 30, 2007, subject to the terms and conditions thereof; provided,
      that nothing herein shall obligate Buyer to pay any premiums in respect of
      such
      Scheduled Welfare Plans for any employees that are not Business
      Employees.

     

    
      
        
        

      

      
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    (b) Buyer
      agrees that any workers’ compensation benefits for Business Employees shall be
      the sole obligation of Buyer and not Seller (whether related to claims incurred
      before, on or after the Closing Date). 

     

    7.3 Severance.
      Buyer
      shall provide any Business Employee whose employment is terminated by Buyer
      within twelve (12) months following the Closing Date, with severance payments
      and benefits, which are no less favorable than the severance pay and benefits
      such employee would have received had he or she terminated employment with
      Seller on the Closing Date, as set forth in Section 7.3
      of the
      Seller Disclosure Schedules. 

     

    7.4 Savings
      Plans.
      Buyer
      hereby agrees that Buyer shall, or shall cause the Acquired Company to, adopt
      a
      plan that is intended to qualify as a “cash or deferred arrangement” under
      Section 401(k) of the IRC (the “Buyer
      Savings Plan”)
      for
      the benefit of the Business Employees. Seller shall, within the requirements
      of
      Law, cause distributions to be made to the Business Employees from any Seller
      Benefit Plan that is intended to qualify as a “cash or deferred arrangement”
under Section 401(k) of the IRC (the “Seller
      Savings Plans”).

     

    7.5 Post-Retirement
      Benefit Liabilities. 
      Effective as of the Closing Date, Buyer shall assume (and does hereby assume),
      shall be responsible for, covenants to pay or otherwise discharge, and shall
      indemnify and hold harmless, Seller against any liability, claim or obligation
      (including reasonable attorney’s fees) relating to or arising out of the Seller
      Benefit Plans that provide for post-retirement medical and life insurance
      benefits for Business Employees that relate to the Business. Such
      post-retirement medical and life insurance benefits will continue to be
      maintained on
      the same terms and conditions in effect on the Closing Date with
      respect to all Business Employees who have retired on or prior to the Closing
      Date and are receiving or entitled to receive post-retirement medical and life
      insurance benefits. 

     

    7.6 Long
      Term Disability. 
      Effective
      as of the Closing Date, Buyer shall assume (and does hereby assume), shall
      be
      responsible for, covenants to pay or otherwise discharge, and shall indemnify
      and hold harmless, Seller against any liability, claim or obligation (including
      reasonable attorney’s fees) relating to or arising out of any Business
      Employee’s long-term disability claim. 

     

    7.7 Life
      Insurance. 
      Effective as of the Closing Date, Buyer shall assume (and does hereby assume),
      shall be responsible for, covenants to pay or otherwise discharge, and shall
      indemnify and hold harmless, Seller against any liability, claim or obligation
      (including reasonable attorney’s fees) relating to or arising out of the Seller
      Benefit Plans that provide for life insurance benefits for Business Employees
      that relate to the Business.

     

    
      
        
        

      

      
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    7.8 Vacation.
      Except
      as may otherwise be required by Law, effective as of the Closing Date, Buyer
      shall assume Seller’s liability for all accrued, but unpaid vacation time of
      Business Employees to the extent such liability is not already a liability
      of an
      Acquired Company. 

     

    7.9 Cooperation.
      Upon
      request, Seller shall provide Buyer, and Buyer shall provide Seller, such
      documents, data and information as may reasonably be necessary to implement
      the
      provisions of this Article 7
      and to
      administer their respective benefit plans, subject to applicable
      Law.

     

    7.10 Post-Closing
      Date Participation.
      Seller
      acknowledges that as of the Closing Date, Business Employees shall no longer
      be
      eligible to actively participate in the Benefit Plans listed on Section 7.10
      of the
      Seller Disclosure Schedules except to the extent required by Law or until such
      time (following the Closing) as a Business Employee becomes an employee of
      Seller. Nothing in this Section 7.10
      shall
      otherwise affect or reduce the accrued benefits as of the Closing Date of
      Business Employees under such Benefit Plans.

     

    7.11 General.
      Nothing
      in this Article 7
      or
      elsewhere in this Agreement shall be construed as (a) conferring any legal
      rights upon any Business Employee for continuation of employment by Buyer or
      its
      affiliates, (b) requiring Buyer to implement, or limiting the rights of
      Buyer to amend or discontinue, any fringe benefit plan, program or practice
      or
      any other employee benefit plan of any nature whatsoever, except as expressly
      provided otherwise in this Article 7
      or
      (c) conferring upon any Business Employee any rights or remedies under this
      Agreement (including under this Article 7).
      

     

    ARTICLE 8

     

    INDEMNIFICATION;
      REMEDIES

     

    8.1 Survival.
      The
      representations and warranties contained herein and in the Ancillary Agreement
      or certificates delivered pursuant to this Agreement or the Ancillary Agreement
      shall survive the Closing until 5:00 p.m., California time, on the fifteen
      (15)-month anniversary of the Closing Date; provided,
      however, that
      (i)
      the representations and warranties contained in Section 3.6
      (Environmental Laws and Regulations) (the “Environmental
      Items”)
      shall
      survive until the three (3)-year anniversary of the Closing Date, (ii) the
      representations and warranties contained in Section 3.1
      (Qualification; Organization; Subsidiaries, etc.), Section
      3.7
      (Employee Benefit Plans), Section
      3.10
      (Tax
      Matters) and Section 3.14
      (Title
      to Assets) (such representations, for definitional purposes collectively with
      the Environmental Items referred to herein as the “Specified
      Indemnity Items”)
      shall
      survive until the expiration of the applicable statute of limitations, and
      (iii)
      in the event of fraud, any such representation or warranty shall survive until
      the expiration of the applicable statute of limitations with respect to Seller
      (but only to the extent fraud by any person may be imputed to Seller under
      applicable law) and the person committing such fraud or with actual knowledge
      of
      the same (each such survival period described in this Section 8.1,
      a
“Survival
      Period”).
      Notwithstanding the foregoing, the representations or warranties in respect
      of
      which indemnity may be sought under Section
      8.2
      or
Section
      8.3,
      and the
      indemnity with respect thereto, shall survive the applicable Survival Period
      and
      thereafter until resolved if a claim in respect thereof has been made prior
      to
      the end of such Survival Period. 

     

    
      
        
        

      

      
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    8.2 Indemnification
      by Parent
      and Buyer.
      Subject
      to Section 8.1 and Section 8.6,
      from
      and after the Closing, each of Parent and Buyer shall jointly and severally
      indemnify, defend and hold harmless Seller and its affiliates and their
      respective stockholders, officers, directors, employees, affiliates, agents
      and
      Representatives (collectively, the “Seller
      Indemnified Parties”),
      from
      and against all judgments, settlements, demands, claims, actions or causes
      of
      action, deficiencies, assessments, Liabilities, losses, damages (whether direct
      or indirect, incidental or consequential), interest, fines, penalties, costs
      and
      expenses (including reasonable legal, accounting and other costs and expenses
      incurred in connection with investigating, defending, settling or satisfying
      any
      and all such demands, claims, actions or causes of action (collectively,
“Losses”)
      arising out of, resulting from, related to or associated with (i) any and
      all of the Assumed Liabilities, (ii) the breach of any of the
      representations and warranties of Parent or Buyer contained in this Agreement
      and (iii) the breach of any covenant or other agreement on the part of
      Parent or Buyer under this Agreement.

     

    8.3 Indemnification
      by Seller.
      Subject
      to Section 8.1 and Section 8.6,
      from
      and after the Closing, Seller shall indemnify, defend and hold harmless Buyer
      and its affiliates and their respective stockholders, officers, directors,
      employees, affiliates, agents and representatives (collectively, the “Buyer
      Indemnified Parties”),
      from
      and against all Losses arising out of, resulting from, related to or associated
      with (i) any and all of the Excluded Liabilities, (ii) the breach of
      any of the representations and warranties of Seller contained in this Agreement
      and (iii) the breach of any covenant or other agreement on the part of
      Seller under this Agreement.

     

    8.4 Notice
      of Claims.
      Each
      party entitled to indemnification under this Article 8
      (the
“Indemnified
      Party”)
      shall
      give notice to the party required to provide such indemnification (the
“Indemnifying
      Party”)
      promptly after such Indemnified Party has actual knowledge of any claims as
      to
      which indemnity is sought (stating in reasonable detail the basis of the claim
      for indemnification and the Section or Sections of this Agreement providing
      for
      such indemnification), provided,
      however,
      that
      the failure of any Indemnified Party to give notice as provided herein shall
      not
      relieve the Indemnifying Party of its obligations under this Article 8
      except
      to the extent that the Indemnifying Party has been adversely affected by such
      failure.

     

    8.5 Procedure
      for Indemnification; Third Party Claims; Arbitration.

     

    (a) Promptly
      after receipt by an Indemnified Party of notice of the commencement of any
      Proceeding against it, such Indemnified Party will, if a claim in connection
      therewith is to be made against an Indemnifying Party under Section 8.2
      or
Section 8.3,
      as the
      case may be, give notice (in addition to the notice required by Section 8.4)
      to the
      Indemnifying Party of the commencement of such claim, but the failure to notify
      the Indemnifying Party will not relieve the Indemnifying Party of any liability
      that it may have to any Indemnified Party, except to the extent that the
      Indemnifying Party demonstrates that the defense of such action is prejudiced
      by
      the Indemnified Party’s failure to give such notice.

     

    
      
        
        

      

      
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    (b) If
      any
      Proceeding referred to in Section 8.5(a)
      is
      brought against an Indemnified Party and it gives notice to the Indemnifying
      Party of the commencement of such Proceeding, the Indemnifying Party will be
      entitled to participate in such Proceeding and, to the extent that it wishes
      (unless (x) the Indemnifying Party is also a party to such Proceeding and
      the Indemnified Party determines in good faith that joint representation
      would
      be
      inappropriate, or (y) the
      Indemnifying Party fails to provide reasonable assurance to the Indemnified
      Party of its financial capacity to defend such Proceeding and provide
      indemnification with respect to such Proceeding), to assume the defense of
      such
      Proceeding with counsel satisfactory to the Indemnified Party and, after notice
      from the Indemnifying Party to the Indemnified Party of its election to assume
      the defense of such Proceeding, the Indemnifying Party will not, as long as
      it
      actively and diligently conducts such defense, be liable to
      the
Indemnified
      Party under this Article 8
      for any
      fees of other counsel or any other expenses with respect to the defense of
      such
      proceeding, in each case subsequently incurred by the Indemnified Party in
      connection with the defense of such Proceeding, other than reasonable costs
      of
      investigation. If the Indemnifying Party assumes the defense of a Proceeding,
      (i) it will be conclusively established for purposes of this Agreement that
      the claims made in that Proceeding are within the scope of and subject to
      indemnification, subject to the limitations set forth in Section 8.6,
      (ii) no compromise or settlement of such claims may be effected by the
      Indemnifying Party without the Indemnified Party’s consent unless the sole
      relief provided is monetary damages that are paid in full by the Indemnifying
      Party, and (iii) the Indemnified Party will have no liability with respect
      to any compromise or settlement of such claims effected without its consent.
      The
      indemnified Party will not unreasonably withhold, delay or condition its consent
      to the settlement or compromise of a proceeding being defended by the
      Indemnifying Party pursuant to the foregoing if the sole relief provided thereby
      is monetary damages. If notice is given to an Indemnifying Party of the
      commencement of any Proceeding and the Indemnifying Party does not, within
      thirty (30) days after the Indemnified Party’s notice is given, give notice to
      the Indemnified Party of its election to assume the defense of such Proceeding,
      the Indemnifying Party will be bound by any determination made in such
      Proceeding or any compromise or settlement effected by the Indemnified Party
      of
      such Proceeding, in each case, with the consent of the Indemnifying Party (not
      to be unreasonably withheld, delayed or conditioned if the sole relief provided
      thereby is monetary damages). Each party hereto shall furnish such information
      regarding itself or the claim in question as the other party may reasonably
      request in writing and shall otherwise cooperate with the other party to such
      extent as shall be reasonably required in connection with the defense of such
      claim and litigation resulting therefrom.

     

    (c) Should
      the Indemnified Party and the Indemnifying Party be unable to agree as to any
      particular item or items or amount or amounts with respect to any claim for
      which indemnification is sought pursuant to this Article 8,
      then
      either party may demand arbitration of the matter, to be conducted by one
      arbitrator mutually agreeable to Seller and Parent. In the event that, within
      twenty (20) days after determination to submit any dispute to arbitration,
      Seller and Parent cannot mutually agree on one arbitrator, then, within ten
      days
      after the end of such twenty (20)-day period, Seller and Parent shall each
      select one arbitrator. The two arbitrators so selected shall select a third
      arbitrator. Any such arbitration shall be held in New York, New York, under
      the
      rules then in effect of the American Arbitration Association. The losing party
      shall pay or reimburse the prevailing party, as applicable, all expenses
      relating to the arbitration, including the respective expenses of each party,
      the fees of each arbitrator and the administrative fee of the American
      Arbitration Association. The decision of the arbitrator or a majority of the
      three arbitrators, as the case may be, as to the validity and amount of any
      such
      claim shall be final, binding, and conclusive upon the parties to this Agreement
      and the Indemnifying Parties, absent manifest error. Promptly after a decision
      of the arbitrator(s) requiring payment by an Indemnifying Party to an
      Indemnified Party, the Indemnifying Party shall make such payment to such
      Indemnified Party.

     

    
      
        
        

      

      
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    8.6 Limitations
      on Indemnification.

     

    (a) An
      Indemnifying Party shall not have any liability under Section 8.2(ii),
      Section 8.2(iii),
      Section 8.3(ii)
      or
Section 8.3(iii)
      (except
      with regard to Buyer’s obligations to pay the Purchase Price and the parties’
respective obligations to pay for any amounts under Section 6.4)
      unless
      the aggregate amount of Losses incurred by the Indemnified Party and
      indemnifiable thereunder arising out of, resulting from, related to or
      associated with the breach of the representations, warranties, covenants or
      agreements exceeds $192,000 (the “Basket”)
      and,
      in any event (except with regard to Buyer’s obligations to pay the Purchase
      Price and the parties’ respective obligations to pay for any amounts under
Section 6.4),
      only
      the aggregate amount of such Losses in excess of the Basket shall be
      indemnifiable hereunder; provided,
      however, that
      the
      Basket shall not apply to any breach of the Specified Indemnity Item or to
      any
      liability under Section
      8.2(i)
      or
Section
      8.3(i). 

     

    (b) Subject
      to this Section 8.6,
      no
      Indemnified Party shall make a claim for indemnification pursuant to this
      Agreement for Losses incurred by such Indemnified Party arising out of,
      resulting from, related to or associated with the breach of the representations,
      warranties, covenants or agreements contained in this Agreement (other than
      a
      claim with respect to breach of any Specified Indemnity Item or any liability
      under Section
      8.2(i)
      or
Section
      8.3(i),
      for
      which this Section 8.6(b)
      shall
      not apply) unless the amount of such Losses (excluding Specified Indemnity
      Items
      or any liability under Section
      8.2(i)
      or
Section
      8.3(i))
      relating to such claim exceeds $500.00; provided,
      however,
      that at
      such time as an Indemnified Party makes a claim or claims for indemnification
      pursuant to this Agreement for Losses, excluding any Specified Indemnity Item
      or
      any liability under Section
      8.2(i)
      or
Section
      8.3(i),
      in an
      aggregate amount exceeding the Basket, such threshold amount for any additional
      claims shall increase to $5,000, until the point that the aggregate amount
      of
      all such additional claims that are less than $5,000 equals or exceeds $50,000,
      at which point all of such additional claims, together with all future claims
      in
      excess of $500, shall be indemnified pursuant to the terms of Article 8.

     

    (c) Neither
      Seller nor Buyer shall be required to indemnify any person under Section 8.2(ii),
      Section 8.2(iii),
      Section 8.3(ii)
      or
Section 8.3(iii)
      (except
      with regard to Buyer’s obligations to pay the Purchase Price and the parties’
respective obligations to pay for any amounts under Section 6.4)
      for an
      aggregate amount of Losses exceeding:

     

    
      
        
        

      

      
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          38
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    (i) in
      the
      case of the Specified Indemnity Items or Excluded Liabilities, in the case
      of
      Seller, $9,600,000 in connection with Losses related to the breach of any such
      Specified Indemnity Items or such Excluded Liabilities; and

     

    (ii) in
      the
      case of all other representations, warranties, covenants or agreements,
      $1,920,000 in connection with Losses related to the breach of any such
      representations, warranties, covenants or agreements of Seller or Parent and
      Buyer, respectively.

     

    (d) An
      Indemnifying Party shall not have any liability under Section 8.2(ii),
      Section 8.2(iii),
      Section 8.3(ii)
      or
Section 8.3(iii)
      (except
      with regard to Buyer’s obligations to pay the Purchase Price) for any Losses
      unless an Indemnified Party shall have delivered to the Indemnifying Party
      a
      claim in
      accordance with Section 8.4
      identifying such Losses (and stating in reasonable detail the basis of the
      claim
      for indemnification and the Section or Sections of this Agreement providing
      for
      such indemnification with regard to such Losses) prior to the termination of
      the
      applicable Survival Period.
      

     

    (e) No
      Loss
      arising from a liability reflected on the Statement of Working Capital (as
      adjusted pursuant to any disputes) shall be subject to indemnification pursuant
      to Section 8.3.

     

    (f) Notwithstanding
      anything to the contrary contained herein, if any Buyer Indemnified Party is
      entitled to indemnification under Section 8.3(ii)
      or
Section 8.3(iii),
      such
      Buyer Indemnified Party shall be entitled to such indemnification in accordance
      with this Article 8
      notwithstanding its assumption of the Assumed Liabilities and obligations under
      Section 8.2(i)
      and
      notwithstanding anything to the contrary in the Ancillary Agreement;
provided,
      however,
      in no
      event shall any Buyer Indemnified Party be entitled to any duplicative recovery
      for such items, pursuant to Section 8.3(i)
      or
      otherwise.

     

    (g) Notwithstanding
      anything to the contrary herein, in no event shall Seller have any liability
      under this Agreement (including this Article 8)
      for any
      Losses relating to a claim the underlying facts of which were known by Parent
      or
      Buyer on or prior to the Closing.

     

    8.7 Exclusive
      Remedy.
      Subject
      to the applicability of Section 6.2
      and
Section 6.4,
      except
      for claims for fraud and except for covenants contained herein which by their
      terms are to be performed at or after the Closing, the indemnification
      obligations under this Article 8
      shall be
      the sole and the exclusive remedy of the parties hereto with respect to any
      breach of any representation, warranty, covenant or agreement under this
      Agreement or Ancillary Agreement by any party hereto or any certificate
      delivered in connection herewith or therewith, except that nothing herein or
      in
      any such certificate shall be construed or interpreted as limiting or impairing
      the rights or remedies that the parties hereto may have at equity for injunctive
      relief or specific performance.

     

    
      
        
        

      

      
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    ARTICLE 9

     

    GENERAL
      PROVISIONS

     

    9.1 Notices.
      All
      notices, requests, claims and other communications under this Agreement shall
      be
      in writing and shall be deemed given if delivered personally or by overnight
      courier to the parties at the following addresses (or at such other address
      for
      a party as shall be specified by notice from such party):

     

    
      	
            	(a)	
              If
                to Seller, to

            

    

     

    Catalytica
      Energy Systems, Inc.

    301
      West
      Warner Road, Suite 132

    Tempe,
      Arizona 85284

    Attention: Richard
      M. Weinroth, Esq.

    Phone: (480)
      556-5555

    Telecopy: (480)
      998-5089

     

    With
      a
      copy to:

     

    Wilson
      Sonsini Goodrich & Rosati

    Professional
      Corporation

    650
      Page
      Mill Road

    Palo
      Alto, California 94304

    Attention: Donna
      M.
      Petkanics, Esq.

    Bradley
      L. Finkelstein, Esq.

    Phone: (650)
      493-9300

    Telecopy: (650)
      493-6811

     

    
      	
            	(b)	
              If
                to Parent or Buyer, to:

            

    

     

    CoaLogix
      Inc. 

    c/o
      Acorn
      Factor, Inc.

    4
      West
      Rockland Road, 1st Floor

    Montchanin,
      Delaware 19710

    Attention: Chief
      Executive Officer 

    Phone: 302-656-1708

    Telecopy: 302-994-3086
      

    

    and

     

    Acorn
      Factor, Inc.

    4
      West
      Rockland Road, 1st Floor

    Montchanin,
      Delaware 19710

    Attention: Chief
      Executive Officer 

    Phone: 302-656-1708

    Telecopy: 302-994-3086

     

    
      
        
        

      

      
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    With
      a
      copy to:

     

    Eilenberg
      Krause & Paul LLP

    11
      East
      44th Street, 19th Floor

    New
      York,
      New York 10017

    Attention: Sheldon
      Krause, Esq. 

    Phone: (212)
      986-9700

    Telecopy:
      (212)
      986-2399

     

    9.2 Certain
      Definitions.
      For
      purposes of this Agreement:

     

    (a) References
      in this Agreement to “Subsidiaries”
of
      any
      party shall mean any corporation, partnership, association, trust or other
      form
      of legal entity of which (i) more than 50% of the outstanding voting
      securities are on the date hereof directly or indirectly owned by such party
      or
      a Subsidiary of such party, or (ii) such party or any Subsidiary of such
      party is a general partner (excluding partnerships in which such party or any
      Subsidiary of such party does not have a majority of the voting interests in
      such partnership).

     

    (b) References
      in this Agreement (except as specifically otherwise defined) to “affiliates”
shall
      mean, as to any person, any other person which, directly or indirectly,
      controls, or is controlled by, or is under common control with, such person.
      As
      used in this definition, “control”
      (including, with its correlative meanings, “controlled
      by”
and
      “under
      common control with”)
      shall
      mean the possession, directly or indirectly, of the power to direct or cause
      the
      direction of management or policies of a person, whether through the ownership
      of securities or partnership or other ownership interests, by contract or
      otherwise. 

     

    (c) References
      in this Agreement (except as specifically otherwise defined) to “person”
shall
      mean an individual, a corporation, a partnership, a limited liability company,
      an association, a trust or any other entity, group (as such term is used in
      Section 13(d)(3) of the Exchange Act) or organization, including a
      Governmental Entity, and any permitted successors and assigns of such
      person. 

     

    (d) References
      in this Agreement to “knowledge”
of
      a
      party shall mean the actual knowledge of any of the officers or managerial
      personnel of such party (which for the avoidance of doubt shall include the
      actual knowledge of Robert W. Zack, Richard M. Weinroth and Kevin Lane in the
      case of Seller), with respect to the matter in question, and such knowledge
      as
      any of such officers or managerial personnel reasonably should have obtained
      upon reasonable investigation and inquiry into the matter in
      question.

     

    (e) References
      in this Agreement to “business
      day”
shall
      mean any day other than a Saturday, Sunday or a day on which the banks in New
      York or Arizona are authorized by law or executive order to be
      closed. 

     

    (f) References
      in this Agreement to specific laws or to specific provisions of laws shall
      include all rules and regulations promulgated thereunder. Any statute defined
      or
      referred to herein or in any agreement or instrument referred to herein shall
      mean such statute as from time to time amended, modified or supplemented,
      including by succession of comparable successor statutes.

     

    
      
        
        

      

      
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    9.3 Interpretation.
      When a
      reference is made in this Agreement to a Section, Exhibit or Disclosure
      Schedule, such reference shall be to a Section of, or an Exhibit or Schedule
      to,
      this Agreement unless otherwise indicated. The table of contents and headings
      contained in this Agreement are for reference purposes only and shall not affect
      in any way the meaning or interpretation of this Agreement. Whenever the word
      “include,”
      “includes”
or
      “including”
is
      used
      in this Agreement, it shall be deemed to be followed by the words “without
      limitation.”

     

    9.4 Counterparts.
      This
      Agreement may be executed in counterparts, all of which shall be considered
      one
      and the same agreement and shall become effective when one or more counterparts
      have been signed by each party and delivered to each other party.

     

    9.5 Entire
      Agreement; Third-Party Beneficiaries.
      This
      Agreement and the other agreements referred to herein constitute the entire
      agreement (and supersede each prior agreement and understanding, whether written
      or oral) among the parties regarding the subject matter of this Agreement.
      This
      Agreement is not intended to confer any rights or remedies on any person other
      than the parties hereto. The rights of Buyer Indemnified Parties and Seller
      Indemnified Parties under Article 8
      may be
      asserted by Parent and Buyer, on the one hand, and Seller, on the other hand,
      respectively.

     

    9.6 Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Delaware regardless of any Laws that might otherwise govern under
      applicable principles of conflicts of laws thereof. 

     

    9.7 Assignment.
      Neither
      this Agreement nor any right, interest or obligation hereunder shall be
      assigned, in whole or in part, by operation of law or otherwise, by any party
      without the prior written consent of the other party. Subject to the preceding
      sentence of this Section 9.7,
      this
      Agreement will be binding upon, inure to the benefit of, and be enforceable
      by,
      the parties and their respective legal successors and permitted
      assigns.

     

    9.8 Nondisclosure.
      Except
      as may be required by applicable Law or the requirements of the NASDAQ Stock
      Market, Inc., for a period of three (3) years following the Closing, Seller
      will
      (and will cause its Subsidiaries
      to) take
      commercially reasonable steps comparable to those steps Seller takes with regard
      to its own similar confidential information to protect the confidentiality
      of
      all confidential information related to the Business in the possession of Seller
      or its then Subsidiaries (other than information which is or becomes known
      to
      the public other than through a breach of this Section 9.8
      by
      Seller). 

     

    9.9 Amendments;
      Waiver.
      This
      Agreement may not be amended or modified except by written agreement of the
      parties hereto. No breach of any covenant, agreement, representation or warranty
      made herein shall be deemed waived unless expressly waived in writing by the
      party who might assert such breach.

     

    
      
        
        

      

      
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    9.10 Enforcement.
      The
      parties agree that irreparable damage would occur if any provision of this
      Agreement were not performed in accordance with its terms or were otherwise
      breached. Each party shall be entitled to injunctive relief to prevent any
      breach of this Agreement and to enforce this Agreement specifically in any
      court
      of the State of Delaware or any court of the United States located in the State
      of Delaware (in addition to any other remedy to which such party is entitled
      at
      law or in equity). In addition, each party hereby:

     

    (a) submits
      itself to the personal jurisdiction of (i) the courts of the State of
      Delaware; and (ii) the United States District Court for the District of
      Delaware with respect to any dispute, suit, action or proceeding arising out
      of,
      or based on any matter arising out of or in connection with, this Agreement
      or
      any transaction contemplated hereby to the extent such courts would have subject
      matter jurisdiction with respect to such dispute;

     

    (b) agrees
      that it will not attempt to deny or defeat such personal jurisdiction or venue
      by motion or other request for leave from any such court; and

     

    (c) agrees
      that it will not bring any action relating to this Agreement (or any
      transactions contemplated by this Agreement) in any court other than such courts
      referred to above.

     

    9.11 Severability.
      Each
      provision of this Agreement will be interpreted so as to be effective and valid
      under applicable Law, but if any provision is held invalid, illegal or
      unenforceable under applicable Law in any jurisdiction, then such invalidity,
      illegality or unenforceability will not affect any other provision, and this
      Agreement will be reformed, construed and enforced in such jurisdiction as
      if
      such invalid, illegal or unenforceable provision had never been included
      herein.

     

    ARTICLE 10

     

    GUARANTEE
      OF BUYER’S OBLIGATIONS

     

    10.1 Guaranty.
      Parent
      hereby absolutely, irrevocably, continuously and unconditionally guarantees
      to
      Seller (i) the full and prompt payment when due of all of Buyer’s financial
      obligations (including payment of the Purchase Price) under this Agreement
      and
      the Ancillary Agreement and (ii) the timely performance by Buyer of all of
      its
      duties, agreements, covenants and obligations under Section
      2.4
      (clauses
      (i) and (ii) collectively, the “Parent
      Guaranteed Obligations”).

     

    10.2 Guaranty
      Absolute.
      The
      liability of Parent under this Article 10
      shall be
      absolute, unconditional, present and continuing until all of the Parent
      Guaranteed Obligations have been indefeasibly paid in full or performed, as
      applicable, irrespective of:

     

    
      
        
        

      

      
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    (a) any
      assignment or other transfer, in whole or in part, of Seller’s interests in and
      rights under this Agreement and/or the Ancillary Agreement, including, without
      limitation, Seller’s right to receive payment and require performance of the
      Parent Guaranteed Obligations;

     

    (b) any
      amendment, waiver, renewal, extension or release of or any consent to or
      departure from or other action or inaction related to this Agreement or the
      Ancillary Agreement, or any other agreement or instrument relating to the Parent
      Guaranteed Obligations;

     

    (c) any
      lack
      of validity or enforceability of or defect or deficiency in this Agreement
      (including this Article 10)
      or any
      other documents to which Seller, Parent or their respective Subsidiaries is
      or
      may become a party;

     

    (d) any
      modification, extension or waiver of any of the terms of this Agreement
      (including this Article 10);

     

    (e) except
      as
      to applicable statutes of limitation, failure, omission, delay, waiver or
      refusal by Seller to exercise, in whole or in part, any right or remedy held
      by
      Seller with respect to this Agreement (including this Article 10);

     

    (f) insolvency,
      bankruptcy, reorganization, arrangement, adjustment, composition, assignment
      for
      the benefit of creditors, liquidation, winding up, dissolution or other similar
      proceeding of Seller, Parent, any of their respective Subsidiaries or any other
      guarantor of the Parent Guaranteed Obligations or other similar proceeding;
      and

     

    (g) any
      other
      circumstance that might otherwise constitute a defense available to, or a
      discharge of, Parent in respect of the Parent Guaranteed Obligations, other
      than
      payment in full of the Parent Guaranteed Obligations.

     

    10.3 Obligations
      Several.
      This is
      a guaranty of payment and performance and not of collection. The obligations
      of
      Parent hereunder are several from those of Buyer or any other person, and are
      primary obligations concerning which Parent is the principal obligor. There
      are
      no conditions precedent to the enforcement of this Article 10,
      except
      as expressly contained herein. It shall not be necessary for Seller, in order
      to
      enforce payment and performance by Parent under this Article 10,
      to
      exhaust its remedies against Buyer, any other guarantor, or any other person
      liable for the payment or performance of the Parent Guaranteed Obligations.
      Seller shall not be required to mitigate damages or take any other action to
      reduce, collect, or enforce the Parent Guaranteed Obligations.

     

    10.4 Obligations
      Continuing.
      This
Article 10 shall
      continue to be effective or be reinstated, as the case may be, if at any time
      any payment of any of the Parent Guaranteed Obligations are annulled, set aside,
      invalidated, declared to be fraudulent or preferential, rescinded or must
      otherwise be returned, refunded or repaid by Seller, upon the insolvency,
      bankruptcy, dissolution, liquidation or reorganization of Parent, Buyer or
      any
      other guarantor, or upon or as a result of the appointment of a receiver,
      intervener or conservator of, or trustee or similar officer for, Parent, Buyer
      or any other guarantor or any substantial part of their property or otherwise,
      all as though such payment or payments had not been made.

     

    
      
        
        

      

      
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    10.5 Enforcement
      of Guaranty.
      In no
      event shall Seller have any obligation (although it is entitled, at its option)
      to proceed against Buyer before seeking satisfaction from Parent, and Seller
      may
      proceed, prior or subsequent to, or simultaneously with, the enforcement of
      Seller’s rights hereunder, to exercise any right or remedy which it may have
      under this Agreement, including this Article 10.

     

    10.6 Waiver.
      Parent
      hereby waives:

     

    (a) notice
      of
      acceptance of the guaranty in this Article 10,
      of the
      creation or existence of any of the Parent Guaranteed Obligations and of any
      action by Seller in reliance hereon or in connection herewith; 

     

    (b) except
      as
      expressly set forth herein, promptness, diligence, all setoffs, presentment,
      demand for payment or performance, notice of dishonor, nonpayment or
      nonperformance, protest and notice of protest with respect to the Parent
      Guaranteed Obligations;

     

    (c) any
      requirement for Seller or any other person to protect, secure, perfect or insure
      any security interest or lien or any property subject thereto or exhaust any
      right or take any action against Parent, any other entity or any
      collateral;

     

    (d) any
      provision of any statute or judicial decision otherwise applicable hereto which
      restricts or in any way limits the rights of any obligee against a guarantor
      or
      surety following a default or failure of performance by an obligor with respect
      to whose obligations the guarantee or surety is provided;

     

    (e) any
      requirement that suit be brought against, or any other action by Seller be
      taken
      against, or any notice of default or other notice be given to, or any demand
      be
      made on, Parent or any other person, or that any other action be taken or not
      taken as a condition to Parent’s liability for the Parent Guaranteed Obligations
      under this Article 10
      or as a
      condition to the enforcement of this Article 10
      against
      Parent; and

     

    (f) any
      defense of Buyer or the cessation, from any cause whatsoever, of the liability
      of Buyer.

     

    10.7 Expenses.
      Parent
      hereby agrees to pay on demand any and all costs, including reasonable legal
      fees, and other expenses incurred by Seller in enforcing Parent’s obligations
      under this Article 10.
      Parent
      hereby unconditionally, absolutely and irrevocably agrees to hold Seller and
      its
      successors and assigns harmless and to indemnify Seller and its successors
      and
      assigns from, for and against any and all costs and expenses, including
      reasonable attorneys’ fees, arising out of or relating to any failure by Parent
      to carry out, observe and perform in accordance with this Article 10 any
      of
      the Parent Guaranteed Obligations contained in or arising from this Article 10.

     

    
      
        
        

      

      
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    10.8 Benefit
      of Guaranty.
      The
      provisions of this Article 10 are
      for
      the benefit of Seller and its successors, transferees, endorsees and
      assigns.

     

    10.9 Reinstatement.
      This
Article 10
      shall
      remain in full force and effect and continue to be effective should any petition
      be filed by or against Buyer or Parent for liquidation or reorganization, should
      Buyer or Parent become insolvent or make an assignment for the benefit of
      creditors or should a receiver or trustee be appointed for all or any
      significant part of Buyer’s or Parent’s assets, and shall continue to be
      effective or be reinstated, as the case may be, if at any time payment and
      performance of the Parent Guaranteed Obligations, or any part thereof, is,
      pursuant to applicable law, rescinded or reduced in amount, or otherwise must
      be
      restored or returned by Seller, whether as a “voidable preference,” “fraudulent
      conveyance,” or otherwise, all as though such payment or performance had not
      been made. In the event that any payment, or any part thereof, is rescinded,
      reduced, restored or returned, the Parent Guaranteed Obligations shall be
      reinstated and deemed reduced only by such amount paid and not so rescinded,
      reduced, restored or returned.

     

    10.10 Continuing
      Guaranty.
      This
Article 10
      is a
      continuing guaranty and shall remain in effect until the Parent Guaranteed
      Obligations have been paid in full. Any other guarantors of all or any part
      of
      the Parent Guaranteed Obligations may be released without affecting the
      liability of Parent hereunder.

     

    10.11 Effective
      Date and Term of Guaranty.
      The
      guaranty under this Article 10
      shall be
      effective at the Closing. Seller shall not have any rights under this
Article 10,
      express
      or implied, nor shall Parent have any obligations under this Article 10,
      express
      or implied, until the Closing. Subject to the foregoing sentence, this
Article 10
      shall
      continue in full force and effect until payment in full of the Parent Guaranteed
      Obligations; provided,
      however,
      that
      the obligations and liabilities of Parent under this Article 10
      shall
      continue in full force and effect with respect to any breach of Parent’s
      obligations hereunder or of the Parent Guaranteed Obligations, in each case
      occurring prior to such termination. 

     

    ARTICLE 11

     

    GUARANTEE
      OF SELLER’S OBLIGATIONS

     

    11.1 Guaranty.
      Renegy
      hereby absolutely, irrevocably, continuously and unconditionally guarantees
      to
      Buyer the full and prompt payment when due of all of Seller’s financial
      obligations (if any) under Section
      2.3(b)(iii)
      and
Section
      8.3
      of this
      Agreement (collectively, the “Renegy
      Guaranteed Obligations”).

     

    11.2 Guaranty
      Absolute.
      The
      liability of Renegy under this Article 11
      shall be
      absolute, unconditional, present and continuing until all of the Renegy
      Guaranteed Obligations have been indefeasibly paid in full or performed, as
      applicable, irrespective of:

     

    (a) any
      assignment or other transfer, in whole or in part, of Buyer’s interests in and
      rights under this Agreement and/or the Ancillary Agreement, including, without
      limitation, Buyer’s right to receive payment and require performance of the
      Renegy Guaranteed Obligations;

     

    
      
        
        

      

      
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    (b) any
      amendment, waiver, renewal, extension or release of or any consent to or
      departure from or other action or inaction related to this Agreement or the
      Ancillary Agreement, or any other agreement or instrument relating to the Renegy
      Guaranteed Obligations;

     

    (c) any
      lack
      of validity or enforceability of or defect or deficiency in this Agreement
      (including this Article 11)
      or any
      other documents to which Buyer, Renegy or their respective Subsidiaries is
      or
      may become a party;

     

    (d) any
      modification, extension or waiver of any of the terms of this Agreement
      (including this Article 11);

     

    (e) except
      as
      to applicable statutes of limitation, failure, omission, delay, waiver or
      refusal by Buyer to exercise, in whole or in part, any right or remedy held
      by
      Buyer with respect to this Agreement (including this Article 11);

     

    (f) insolvency,
      bankruptcy, reorganization, arrangement, adjustment, composition, assignment
      for
      the benefit of creditors, liquidation, winding up, dissolution or other similar
      proceeding of Buyer, Renegy, any of their respective Subsidiaries or any other
      guarantor of the Renegy Guaranteed Obligations or other similar proceeding;
      and

     

    (g) any
      other
      circumstance that might otherwise constitute a defense available to, or a
      discharge of, Renegy in respect of the Renegy Guaranteed Obligations, other
      than
      payment in full of the Renegy Guaranteed Obligations.

     

    11.3 Obligations
      Several.
      This is
      a guaranty of payment and performance and not of collection. The obligations
      of
      Renegy hereunder are several from those of Seller or any other person, and
      are
      primary obligations concerning which Renegy is the principal obligor. There
      are
      no conditions precedent to the enforcement of this Article 11,
      except
      as expressly contained herein. It shall not be necessary for Buyer, in order
      to
      enforce payment and performance by Renegy under this Article 11,
      to
      exhaust its remedies against Seller, any other guarantor, or any other person
      liable for the payment or performance of the Renegy Guaranteed Obligations.
      Buyer shall not be required to mitigate damages or take any other action to
      reduce, collect, or enforce the Renegy Guaranteed Obligations.

     

    11.4 Obligations
      Continuing.
      This
Article 11 shall
      continue to be effective or be reinstated, as the case may be, if at any time
      any payment of any of the Renegy Guaranteed Obligations are annulled, set aside,
      invalidated, declared to be fraudulent or preferential, rescinded or must
      otherwise be returned, refunded or repaid by Buyer, upon the insolvency,
      bankruptcy, dissolution, liquidation or reorganization of Renegy, Seller or
      any
      other guarantor, or upon or as a result of the appointment of a receiver,
      intervener or conservator of, or trustee or similar officer for, Renegy, Seller
      or any other guarantor or any substantial part of their property or otherwise,
      all as though such payment or payments had not been made.

     

    
      
        
        

      

      
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    11.5 Enforcement
      of Guaranty.
      In no
      event shall Buyer have any obligation (although it is entitled, at its option)
      to proceed against Seller before seeking satisfaction from Renegy, and Buyer
      may
      proceed, prior or subsequent to, or simultaneously with, the enforcement of
      Buyer’s rights hereunder, to exercise any right or remedy which it may have
      under this Agreement, including this Article 11.

     

    11.6 Waiver.
      Renegy
      hereby waives:

     

    (a) notice
      of
      acceptance of the guaranty in this Article 11,
      of the
      creation or existence of any of the Renegy Guaranteed Obligations and of any
      action by Buyer in reliance hereon or in connection herewith; 

     

    (b) except
      as
      expressly set forth herein, promptness, diligence, all setoffs, presentment,
      demand for payment or performance, notice of dishonor, nonpayment or
      nonperformance, protest and notice of protest with respect to the Renegy
      Guaranteed Obligations;

     

    (c) any
      requirement for Buyer or any other person to protect, secure, perfect or insure
      any security interest or lien or any property subject thereto or exhaust any
      right or take any action against Renegy, any other entity or any
      collateral;

     

    (d) any
      provision of any statute or judicial decision otherwise applicable hereto which
      restricts or in any way limits the rights of any obligee against a guarantor
      or
      surety following a default or failure of performance by an obligor with respect
      to whose obligations the guarantee or surety is provided;

     

    (e) any
      requirement that suit be brought against, or any other action by Buyer be taken
      against, or any notice of default or other notice be given to, or any demand
      be
      made on, Renegy or any other person, or that any other action be taken or not
      taken as a condition to Renegy’s liability for the Renegy Guaranteed Obligations
      under this Article 11
      or as a
      condition to the enforcement of this Article 11
      against
      Renegy; and

     

    (f) any
      defense of Seller or the cessation, from any cause whatsoever, of the liability
      of Seller.

     

    11.7 Expenses.
      Renegy
      hereby agrees to pay on demand any and all costs, including reasonable legal
      fees, and other expenses incurred by Buyer in enforcing Renegy’s obligations
      under this Article 11.
      Renegy
      hereby unconditionally, absolutely and irrevocably agrees to hold Buyer and
      its
      successors and assigns harmless and to indemnify Buyer and its successors and
      assigns from, for and against any and all costs and expenses, including
      reasonable attorneys’ fees, arising out of or relating to any failure by Renegy
      to carry out, observe and perform in accordance with this Article 11
      any of
      the Renegy Guaranteed Obligations contained in or arising from this Article 11.

     

    11.8 Benefit
      of Guaranty.
      The
      provisions of this Article 11 are
      for
      the benefit of Buyer and its successors, transferees, endorsees and
      assigns.

     

    
      
        
        

      

      
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    11.9 Reinstatement.
      This
Article 11
      shall
      remain in full force and effect and continue to be effective should any petition
      be filed by or against Seller or Renegy for liquidation or reorganization,
      should Seller or Renegy become insolvent or make an assignment for the benefit
      of creditors or should a receiver or trustee be appointed for all or any
      significant part of Seller’s or Renegy’s assets, and shall continue to be
      effective or be reinstated, as the case may be, if at any time payment and
      performance of the Renegy Guaranteed Obligations, or any part thereof, is,
      pursuant to applicable law, rescinded or reduced in amount, or otherwise must
      be
      restored or returned by Buyer, whether as a “voidable preference,” “fraudulent
      conveyance,” or otherwise, all as though such payment or performance had not
      been made. In the event that any payment, or any part thereof, is rescinded,
      reduced, restored or returned, the Renegy Guaranteed Obligations shall be
      reinstated and deemed reduced only by such amount paid and not so rescinded,
      reduced, restored or returned.

     

    11.10 Continuing
      Guaranty.
      This
Article 11
      is a
      continuing guaranty and shall remain in effect until the Renegy Guaranteed
      Obligations have been paid in full. Any other guarantors of all or any part
      of
      the Renegy Guaranteed Obligations may be released without affecting the
      liability of Renegy hereunder.

     

    11.11 Effective
      Date and Term of Guaranty.
      The
      guaranty under this Article 11
      shall be
      effective at the Closing. Buyer shall not have any rights under this
Article 11,
      express
      or implied, nor shall Renegy have any obligations under this Article 11,
      express
      or implied, until the Closing. Subject to the foregoing sentence, this
Article 11
      shall
      continue in full force and effect until payment in full of the Renegy Guaranteed
      Obligations; provided,
      however,
      that
      the obligations and liabilities of Renegy under this Article 11
      shall
      continue in full force and effect with respect to any breach of Renegy’s
      obligations hereunder or of the Renegy Guaranteed Obligations, in each case
      occurring prior to such termination. 

     

    

     

    Signature
      page follows]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      written above.

    

     

    SELLER

     

    CATALYTICA
      ENERGY SYSTEMS, INC.

    a
      Delaware corporation

     

    By:                                                                        
      

     

    Name:                                                                   
      

     

    Title:                                                                     
      

     

    

     

    PARENT

     

    ACORN
      FACTOR, INC.

    a
      Delaware corporation

     

    
      By:                                                                        
        

       

      Name:                                                                   
        

       

      Title:                                                                     
        

    

    

     

    BUYER

     

    COALOGIX
      INC.

    a
      Delaware corporation

     

    
      By:                                                                        
        

       

      Name:                                                                   
        

       

      Title:                                                                     
        

    

    

    [Signature
      Page to Stock Purchase Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WITH
      RESPECT TO ARTICLE 11 ONLY,

     

    RENEGY

     

    RENEGY
      HOLDINGS, INC.

    a
      Delaware corporation

     

    
      By:                                                                        
        

       

      Name:                                                                   
        

       

      Title:                                                                     
        

    

     

    [Signature
      Page to Stock Purchase
      Agreement]

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