Exhibit 2.11
MASTER SEPARATION AGREEMENT
This Master Separation Agreement (this "Agreement") is entered into as
of December 15, 2000, between Catalytica, Inc. ("Catalytica"), a Delaware
corporation, and Catalytica Energy Systems, Inc. ("CESI"), a Delaware
corporation formerly known as Catalytica Combustion Systems, Inc.
WHEREAS, Catalytica currently owns 11,327,751 shares of the issued and
outstanding common stock, par value $0.001 per share, of CESI ("CESI Common
Stock");
WHEREAS, CESI is engaged in the business of developing and
commercializing proprietary catalytic processes (a) to achieve near-zero
emissions and improve the performance of hydro-carbon combustion systems and (b)
such other activities specifically described in the Registration Statement on
Form S-1 filed by CESI in connection with the Merger (the "CESI Business");
WHEREAS, Catalytica Advanced Technologies, Inc. ("CAT") will be merged
with and into CESI prior to the Distribution (as hereinafter defined).
WHEREAS, Catalytica has entered into the Agreement and Plan of Merger
dated as of August 2, 2000 (the "Merger Agreement"), with Synotex Company, Inc.
and Synotex Acquisition Corporation pursuant to which, subsequent to the
distribution by Catalytica of its shares of CESI, Synotex Acquisition
Corporation will merge with and into Catalytica (the "Merger"), resulting in
Catalytica becoming a wholly-owned subsidiary of Synotex Company, Inc.
WHEREAS, the Boards of Directors of Catalytica and CESI have each
determined that, to the extent such assets and liabilities do not currently
reside with CESI, it would be appropriate and desirable for Catalytica to
contribute and transfer to CESI, and for CESI to receive and assume, directly or
indirectly, certain assets and liabilities currently held by Catalytica and
associated with the CESI Business and enter into certain agreements associated
therewith (the "Separation");
WHEREAS, following the transfer and assumption of such assets and
liabilities to or by CESI and in connection with the Merger and the execution
and delivery of the Ancillary Agreements, Catalytica will distribute to the
holders of its common stock, $0.01 par value (the "Catalytica Common Stock"),
pursuant to a registration statement on Form S-1 pursuant to the Securities Act
of 1933, as amended (the "Registration Statement") by means of a pro rata
distribution, all of the shares of CESI Common Stock owned by Catalytica (the
"Distribution"); and
WHEREAS, the parties intend in this Agreement, including the Exhibits
hereto, to set forth the principal arrangements between them regarding the
Separation.
NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliated Company" of any Person means any entity that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
1.2 "Ancillary Agreements" shall mean the agreements listed in Section 3.1
hereof.
1.3 "CESI Group" means CESI, each Subsidiary and Affiliated Company of
CESI immediately after the Effective Time or that is contemplated to be a
Subsidiary or Affiliated Company of CESI and each Person that becomes a
Subsidiary or Affiliated Company of CESI after the Effective Time.
1.4 "CESI's Auditors" means CESI's independent certified public
accountants.
1.5 "CESI Employee" shall have the meaning set forth in the Employee
Matters Agreement between Catalytica and CESI.
1.6 "Catalytica Group" means Catalytica, each Subsidiary and Affiliated
Company of Catalytica (other than any member of the CESI Group) immediately
after the Effective Time.
1.7 "Catalytica's Auditors" means Catalytica's independent certified
public accountants.
1.8 "Commission" means the United States Securities and Exchange
Commission.
1.9 "Distribution" has the meaning set forth in the Recitals hereof.
1.10 "Distribution Agent" has the meaning set forth in Section 4.1 hereof.
1.11 "Distribution Date" has the meaning set forth in Section 4.1 hereof.
1.12 "Effective Time" means the effective time of the Merger.
1.13 "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
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1.14 "Governmental Approvals" means any notices, reports or other filings
to be made, or any consents, registrations, approvals, permits or authorizations
to be obtained from, any Governmental Authority.
1.15 "Governmental Authority" shall mean any federal, state, local, foreign
or international court, government, department, commission, board, bureau,
agency, official or other regulatory, administrative or governmental authority.
1.16 "Information" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
1.17 "Nasdaq" means the Nasdaq National Market.
1.18 "Non-Energy Subsidiary" shall have the meaning set forth in the Merger
Agreement.
1.19 "Person" as used in this Agreement shall be broadly interpreted to
include, without limitation, an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
1.20 "Record Date" means the close of business on the date to be determined
by the Board of Directors of Catalytica as the record date for determining the
stockholders of Catalytica entitled to receive shares of CESI Common Stock in
the Distribution, which shall be the Closing Date (as defined in the Merger
Agreement).
1.21 "Subsidiary" of any Person means a corporation or other organization
whether incorporated or unincorporated of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; provided,
however, that no Person that is not directly or indirectly wholly-owned by any
other Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control, that Person.
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1.22 "Tax Sharing Agreement" means that Tax Sharing Agreement between
Catalytica, CESI, and certain other parties named therein to be entered into in
connection with the Separation.
1.23 "WSGR" means Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation.
ARTICLE 2
SEPARATION
2.1 Separation Date. Except as otherwise provided in this Agreement, or in
any agreement to be executed in connection with this Agreement, the effective
time and date of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation shall be 12:01 a.m.,
Pacific Time, December 15, 2000 or such other date and time as may be fixed by
the Board of Directors of Catalytica (the "Separation Date").
2.2 Closing of Transactions. Except as otherwise provided in this
Agreement, the closing of the transactions contemplated in Article 2 shall occur
on the Separation Date at the offices of XXXX, 0 Xxxxxx Xxxxxx, Spear Tower,
Suite 3300, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
ARTICLE 3
DOCUMENTS AND ITEMS
TO BE DELIVERED ON THE SEPARATION DATE
3.1 Documents to Be Delivered by Catalytica. On the Separation Date,
Catalytica will deliver, or will cause to be delivered, to CESI the following
items and agreements:
(a) A duly executed Trademark License Agreement substantially in the
form attached as Exhibit A;
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(b) A duly executed Employee Matters Agreement substantially in the
form attached hereto as Exhibit B;
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(c) A duly executed Master Transitional Services Agreement
substantially in the form attached hereto as Exhibit C;
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(d) A duly executed Real Estate Matters Agreement substantially in
the form attached hereto as Exhibit D (including a duly executed Space Sharing
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Agreement substantially in the form attached as Exhibit C thereto);
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(e) A duly executed Master Confidential Disclosure Agreement
substantially in the form attached hereto as Exhibit E;
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(f) A duly executed Indemnification Agreement (the "Indemnification
Agreement") substantially in the form attached hereto as Exhibit F;
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(g) A duly executed Tax Sharing Agreement substantially in the form
attached hereto as Exhibit G;
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(h) A duly executed Amended and Restated Cross-License Agreement
between Catalytica and CESI, as successor to Catalytica Combustion Systems, Inc.
and CAT, substantially in the form attached hereto as Exhibit H;
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(i) Resignations, effective as of the Distribution Date, signed by
each person who is to serve as a director or employee of any member of the
Catalytica Group following the Effective Time from all positions as officers or
directors of any member of the CESI Group in which they serve;
(j) Resignations, effective as of the Distribution Date, signed by
each person who is to serve as a director or employee of any member of the CESI
Group following the Effective Time from all positions as officers or directors
of any member of the Catalytica Group in which they serve;
(k) Such other agreements, documents or instruments as the parties
may agree are necessary or desirable in order to achieve the purposes hereof.
3.2 Documents to Be Delivered by CESI. On the Separation Date, CESI will
deliver to Catalytica, in each case where CESI is a party to any agreement or
instrument referred to in Section 3.1, a duly executed counterpart of such
agreement or instrument.
ARTICLE 4
THE DISTRIBUTION
4.1 The Distribution.
(a) Delivery of Shares for Distribution. Subject to Section 4.4
hereof, on or prior to the date the Distribution is effective (the "Distribution
Date"), Catalytica will deliver to Mellon Investor Services LLC (the
"Distribution Agent") stock certificates, endorsed by Catalytica in blank,
representing all of the outstanding shares of CESI Common Stock then owned by
Catalytica, and shall cause the Distribution Agent to distribute the appropriate
number of such shares of CESI Common Stock to each such holder or designated
transferee or transferees of such holder.
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(b) Shares Received. Subject to Sections 4.4 and 4.5, each holder of
Catalytica Common Stock on the Record Date (or such holder's designated
transferee or transferees) will be entitled to receive in the Distribution a
number of shares of CESI Common Stock equal to the number of shares of
Catalytica Common Stock held by such holder on the Record Date multiplied by
0.16547.
(c) Obligation to Provide Information. CESI and Catalytica, as the
case may be, will provide to the Distribution Agent all share certificates and
any information required in order to complete the Distribution on the basis
specified above.
4.2 Actions Prior To The Distribution.
(a) Information Statement. Catalytica and CESI shall prepare and
mail, prior to the Distribution Date, to the holders of common stock of
Catalytica, such information concerning the CESI Business and the Distribution
and such other matters as Catalytica shall reasonably determine are necessary
and as may be required by law. Catalytica and CESI will prepare, and CESI will,
to the extent required under applicable law, file with the Commission any such
documentation which Catalytica and CESI determine is necessary or desirable to
effectuate the Distribution, and Catalytica and CESI shall each use its
reasonable commercial efforts to obtain all necessary approvals from the
Commission with respect thereto as soon as practicable.
(b) Blue Sky. Catalytica and CESI shall take and shall cause any of
their Subsidiaries to take all such actions as may be necessary or appropriate
under the securities or blue sky laws of the United States (and any comparable
laws under any foreign jurisdiction) in connection with the Distribution.
(c) Nasdaq Listing. CESI shall prepare and file, and shall use its
reasonable commercial efforts to have approved, an application for the listing
of CESI Common Stock to be distributed in the Distribution on Nasdaq, subject to
official notice of distribution.
(d) Conditions. Catalytica and CESI shall take and shall cause any
of their Subsidiaries to take all reasonable steps necessary and appropriate to
cause the conditions set forth in Section 4.4 to be satisfied and to effect the
Distribution on the Distribution Date.
4.3 Sole Discretion of Catalytica. Catalytica shall, in its sole and
absolute discretion, determine the date of the consummation of the Distribution
and all terms of the Distribution, including, without limitation, the form,
structure and terms of any transaction(s) and/or offering(s) to effect the
Distribution and the timing of and conditions to the consummation of the
Distribution. In addition, Catalytica may at any time and from time to time
until the completion of the Distribution modify or change the terms of the
Distribution, including, without limitation, by accelerating or delaying the
timing of the consummation of all or part of the Distribution. CESI shall
cooperate with Catalytica in all respects to
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accomplish the Distribution and shall, at Catalytica's direction, promptly take
any and all actions necessary or desirable to effect the Distribution,
including, without limitation, the registration under the Exchange Act of the
common stock of CESI on an appropriate registration form or forms to be
designated by Catalytica. Catalytica shall select any financial printer,
solicitation and/or exchange agent and outside counsel for Catalytica; provided,
however, that nothing herein shall prohibit CESI from engaging (at its own
expense) its own financial, legal, accounting and other advisors in connection
with the Distribution.
4.4 Conditions To Distribution. The following are conditions to the
consummation of the Distribution. The conditions are for the sole benefit of
Catalytica and shall not give rise to or create any duty on the part of
Catalytica or the Catalytica Board of Directors to waive or not waive any such
condition.
(a) Registration Statement. The Registration Statement shall have
been filed and declared effective by the Commission, and there shall be no stop-
order in effect with respect thereto.
(b) Blue Sky. The actions and filings with regard to state
securities and blue sky laws of the United States (and any comparable laws under
any foreign jurisdictions) shall have been taken and, where applicable, have
become effective or been accepted.
(c) Nasdaq Listing. The CESI Common Stock to be distributed in the
Distribution shall have been accepted for listing on the Nasdaq, on official
notice of issuance.
(d) No Legal Restraints. No order, injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution or any of the other
transactions contemplated by this Agreement shall be in effect and no other
event outside the control of Catalytica shall have occurred or failed to occur
that prevents the consummation of the Distribution.
(e) Separation. This Agreement and the Ancillary Agreements shall
have been executed and delivered by each of the parties hereto or thereto.
(f) Other Actions. Such other actions as the parties hereto may,
based upon the advice of counsel, reasonably request to be taken prior to the
Distribution in order to assure the successful completion of the Distribution
shall have been taken.
(g) No Termination. This Agreement shall not have been terminated.
(h) Government Approvals. Any material governmental approvals and
consents necessary to consummate the Distribution shall have been obtained and
be in full force and effect.
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4.5 Fractional Shares. As soon as practicable after the Distribution
Date, Catalytica shall direct the Distribution Agent to determine the number of
whole shares and fractional shares of CESI Common Stock allocable to each holder
of record or beneficial owner of Catalytica Common Stock as of the Record Date,
to aggregate all such fractional shares and sell the whole shares obtained
thereby at the direction of Catalytica, in open market transactions, at then
prevailing trading prices, and to cause to be distributed to each such holder or
for the benefit of each such beneficial owner to which a fractional share shall
be allocable such holder's or owner's ratable share of the proceeds of such
sale, after making appropriate deductions of the amount required to be withheld
for federal income tax purposes and after deducting an amount equal to all
brokerage charges, commissions and transfer taxes attributed to such sale.
Catalytica and the Distribution Agent shall use their reasonable commercial
efforts to aggregate the shares of Catalytica Common Stock that may be held by
any beneficial owner thereof through more than one account in determining the
fractional share allocable to such beneficial owner. Notwithstanding anything in
this Agreement to the contrary, no fractional shares of CESI Common Stock shall
be issued in connection with the Distribution, and any such fractional share
interests to which a holder of Catalytica Common Stock would otherwise be
entitled will not entitle such stockholder to vote or to any rights of a
stockholder of CESI. In lieu of any such fractional shares, each stockholder
who, but for the provisions of this Section, would be entitled to receive a
fractional share interest of CESI Common Stock shall be paid cash, without any
interest thereon, as provided above.
ARTICLE 5
COVENANTS AND OTHER MATTERS
5.1 Other Agreements.
(a) Catalytica and CESI agree to execute or cause to be executed by
the appropriate parties and deliver, as appropriate, such other agreements,
instruments and other documents as may be reasonably necessary or desirable in
order to effect the purposes of this Agreement and the Ancillary Agreements.
(b) Except as set forth in Schedule 1 to the Xxxx of Sale attached as
Exhibit E to the Real Estate Matters Agreement, Catalytica or another member of
the Catalytica Group shall retain all right, title and interest in and to all
assets located in, on or about the Demised Premises (as defined in the Real
Estate Matters Agreement).
5.2 Further Instruments. At the request of CESI, and without further
consideration, Catalytica will execute and deliver, and will cause its
Subsidiaries to execute and deliver, to CESI such other instruments of transfer,
conveyance, assignment, substitution and confirmation and take such action as
CESI may reasonably deem necessary or desirable in order more effectively to
transfer, convey and assign to CESI and its Subsidiaries and confirm
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CESI's and its Subsidiaries' title to all of the assets, rights and other things
of value contemplated to be transferred to CESI pursuant to this Agreement, the
Ancillary Agreements and any documents referred to therein, to put CESI in
actual possession and operating control thereof and to permit CESI to exercise
all rights with respect thereto (including, without limitation, rights under
contracts and other arrangements as to which the consent of any third party to
the transfer thereof shall not have previously been obtained). At the request of
Catalytica and without further consideration, CESI will execute and deliver to
Catalytica and its Subsidiaries all instruments, assumptions, novations,
undertakings, substitutions or other documents and take such other action as
Catalytica may reasonably deem necessary or desirable in order to have CESI
fully and unconditionally assume and discharge the liabilities contemplated to
be assumed by CESI under this Agreement or any document in connection herewith
and to relieve the Catalytica Group of any liability or obligation with respect
thereto and evidence the same to third parties. Furthermore, each party, at the
request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of the transactions
contemplated hereby. Neither Catalytica nor CESI shall be obligated, in
connection with the foregoing, to expend money other than reasonable out-of-
pocket expenses, attorneys' fees and recording or similar fees which shall be
reimbursed by the requesting party upon receipt of an invoice therefore.
5.3 Agreement for Exchange of Information.
(a) Generally. Other than in circumstances in which indemnification
is sought pursuant to the Indemnification Agreement (in which event the
provisions of such agreement will govern), each of Catalytica and CESI agrees to
provide, or cause to be provided, to each other as soon as reasonably
practicable after written request therefor, any specific and identified
Information in the possession or under the control of such party and not already
in the possession or control of the other party that the requesting party
reasonably needs (i) to comply with reporting, disclosure, filing or other
requirements imposed on the requesting party (including under applicable
securities laws) by a Governmental Authority having jurisdiction over the
requesting party, (ii) for use in any other judicial, regulatory, administrative
or other proceeding or in order to satisfy audit, accounting, claims,
regulatory, litigation or other similar requirements, (iii) to comply with its
obligations under this Agreement or any Ancillary Agreement or (iv) in
connection with the businesses of the Catalytica Group or the CESI Group, as the
case may be prior to the Effective Time; provided, however, that in the event
that any party determines that any such provision of Information could be
commercially detrimental, violate any law or agreement, or waive any attorney-
client privilege, the parties shall, subject to Section 5.3(e), take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
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(b) Internal Accounting Controls; Financial Information. After the
Effective Time, (i) each party shall maintain in effect at its own cost and
expense adequate systems and controls for its business to the extent necessary
to enable the other party to satisfy its reporting, accounting, audit and other
obligations, and (ii) each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other data and
customary representations (including, for example, management letters to
accountants) and information as the requesting party determines necessary or
advisable in order to prepare its financial statements and reports or filings
with any Governmental Authority.
(c) Ownership and Delivery of Information. All information embodied
in paper, electronic or other tangible form held on-site or off-site by or on
behalf of Catalytica or any of its Subsidiaries (including any member of the
CESI Group) or any of their respective management or agents which does not
relate exclusively to the CESI Business shall be delivered to, or retained by,
Catalytica or another member of the Catalytica Group. All information embodied
in paper, electronic or other tangible form held on-site or off-site by any
member of the Catalytica Group or any of its management or agents which relate
exclusively to the CESI Business shall be delivered to, or retained by, CESI.
Any Information owned by a party or its Subsidiaries that is provided to a
requesting party or its Subsidiaries pursuant to this Section 5.3 or any other
Ancillary Agreement shall be deemed to remain the property of the providing
Person. Unless specifically set forth herein, nothing contained in this
Agreement shall be construed as granting or conferring rights of license or
otherwise in any such Information.
(d) Record Retention. Except as otherwise provided herein or in an
Ancillary Agreement or when a longer retention period is required by law, each
party agrees to retain all Information in its respective possession or control
at the Effective Time substantially in accordance with the policies of
Catalytica as in effect at the Effective Time. However, except as set forth in
the Tax Sharing Agreement, each party may amend its respective record retention
policies at such party's discretion; provided, that in the case of any
Information relating to environmental liabilities or taxes, such retention
period shall be extended to the expiration of the applicable statute of
limitations (giving effect to any extensions thereof (and the parties shall
notify each other of any such extensions)); provided further, however, that if a
party desires to effect the amendment within three (3) years after the Effective
Time, the amending party must give thirty (30) days prior written notice of such
change in the policy to the other party to this Agreement.
(i) No Destruction. No party will destroy, or permit any of its
Subsidiaries to destroy, any Information that exists at the Effective Time
(other than Information that is permitted to be destroyed under the current
record retention policies of either party) and that falls under the categories
listed in Section 5.3(a), without first using its reasonable commercial efforts
to provide 30 days notice to the other party of the proposed
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destruction and giving the other party the opportunity to take possession
of such Information prior to such destruction; provided that no information
relating to environmental liabilities or taxes shall be destroyed prior to
the passage of six months after the expiration of the applicable statute of
limitations (giving effect to any extensions thereof (and the parties shall
notify each other of any such extensions)).
(ii) Limitation of Liability. Except as specifically provided
elsewhere in this Agreement or in an Ancillary Agreement, no party shall have
any liability to any other party in the event that any Information exchanged or
provided pursuant to this Section 5.3 is found to be inaccurate, in the absence
of gross negligence or willful misconduct by the party providing such
Information. No party shall have any liability to any other party if any
Information is destroyed or lost after reasonable commercial efforts by such
party to comply with the provisions of Section 5.3(d).
(iii) Other Agreements Providing for Exchange of Information. The
rights and obligations granted under this Section 5.3 are subject to any
specific limitations, expansions, qualifications or additional provisions on the
sharing, exchange or confidential treatment of Information set forth in this
Agreement and any Ancillary Agreement.
(iv) Production of Witnesses; Cooperation. After the Effective
Time, except in the case of a legal or other proceeding by one party against
another party (which shall be governed by such discovery rules as may be
applicable under Section 5.6 or otherwise), each party hereto shall use its
reasonable commercial efforts to make available to each other party, upon
written request, the current directors, officers, employees, other personnel and
agents of such party as witnesses to the extent that (A) any such person (giving
consideration to business demands of such directors, officers, employees, other
personnel and agents) may reasonably be required in connection with any legal,
administrative or other proceeding in which the requesting party may from time
to time be involved, regardless of whether such legal, administrative or other
proceeding is a matter with respect to which indemnification may be sought
hereunder and (B) there is no conflict in the proceeding between the requesting
party and the Catalytica Group or the CESI Group, as applicable. A party
providing witness services to the other party under this Section shall be
entitled to receive from the recipient of such services, upon the presentation
of invoices therefor, payments for such amounts, relating to disbursements and
other out-of-pocket expenses (which shall be deemed to exclude the costs of
salaries and benefits of employees who are witnesses), as may be reasonably
incurred in providing such witness services.
(e) Privileged Matters. The parties hereto recognize that legal
and other professional services that have been and will be provided prior to the
Effective Time have been and will be rendered for the benefit of each of the
members of the Catalytica Group and of the CESI Group, and that each of the
members of the Catalytica Group and of the CESI Group should be deemed to be the
client for the purposes of asserting all privileges which
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may be asserted under applicable law. To allocate the interests of each party in
the information as to which any party is entitled to assert a privilege, the
parties agree as follows:
(i) Catalytica shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to any matter relating to the business of any Non-Energy
Subsidiary (as defined in the Merger Agreement) or Catalytica at or after the
Effective Time, whether or not the privileged information is in the possession
of or under the control of Catalytica or CESI. Catalytica shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges in
connection with privileged information that relates solely to the subject matter
of any claims for which CESI is not obligated to provide indemnification
pursuant to the Indemnification Agreement, now pending or which may be asserted
in the future, in any lawsuits or other proceedings initiated against or by
Catalytica, whether or not the privileged information is in the possession of or
under the control of Catalytica or CESI.
(ii) CESI shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Energy Business (as defined in the Merger Agreement)
whether or not the privileged information is in the possession of or under the
control of CESI or Catalytica. CESI shall also be entitled, in perpetuity, to
control the assertion or waiver of all privileges in connection with privileged
information that relates solely to the subject matter of any claims relating to
the CESI Business, now pending or which may be asserted in the future, in any
lawsuits or other proceedings initiated against or by CESI, whether or not the
privileged information is in the possession of or under the control of
Catalytica or CESI.
(iii) The parties hereto agree that they shall have a shared
privilege, with equal right to assert, subject to the restrictions in this
Section 5.3(e), with respect to all privileges not allocated pursuant to the
terms of Sections 5.3(e)(i) and (ii); provided, that the written consent of both
parties is required to waive any privilege deemed to be a shared privilege
hereunder. All privileges relating to any claims, proceedings, litigation,
disputes, or other matters which involve both Catalytica and CESI in respect of
which both parties retain any responsibility or liability under this Agreement
or the Indemnification Agreement, shall be subject to a shared privilege among
them.
(iv) No party hereto may waive any privilege which could be asserted
under any applicable law, in which any other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation with Third Parties or as
provided in subsection (v) below. Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within twenty (20) days
after notice from the party requesting such consent.
(v) In the event of any litigation or dispute exclusively between or
among the parties hereto, any party and a Subsidiary of the other party hereto,
or a Subsidiary
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of one party hereto and a Subsidiary of the other party hereto, either such
party may waive a privilege in which the other party has a shared privilege,
without obtaining the consent of the other party, provided that such waiver of a
shared privilege shall be effective only as to the use of information with
respect to the litigation or dispute between the relevant parties and/or their
Subsidiaries, and shall not operate as a waiver of the shared privilege with
respect to third parties.
(vi) If a dispute arises between or among the parties hereto or
their respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(vii) Upon receipt by any party hereto or by any Subsidiary
thereof of any subpoena, discovery or other request which arguably calls for the
production or disclosure of information subject to a shared privilege or as to
which another party has the sole right hereunder to assert a privilege, or if
any party obtains knowledge that any of its or any of its Subsidiaries' current
or former directors, officers, agents or employees has received any subpoena,
discovery or other request which arguably calls for the production or disclosure
of such privileged information, such party shall promptly notify the other party
or parties of the existence of the request and shall provide the other party or
parties a reasonable opportunity to review the information and to assert any
rights it or they may have under this Section 5.3 or otherwise to prevent the
production or disclosure of such privileged information.
(viii) The transfer of all Information and other information
pursuant to this Agreement and any other Ancillary Agreement is made in reliance
on the agreement of Catalytica and CESI, as set forth in the Master
Confidentiality and Non-Disclosure Agreement and this Section 5.3(e), to
maintain the confidentiality of confidential or privileged information and to
assert and maintain all applicable privileges. The access to information being
granted pursuant to Section 5.3(a) hereof, the agreement to provide witnesses
and individuals pursuant to Sections 5.3(d)(iv) hereof, the furnishing of
notices and documents and other cooperative efforts contemplated by this
Agreement and the Ancillary Agreements, and the transfer of privileged
information between and among the parties and their respective Subsidiaries
pursuant to this Agreement shall not be deemed a waiver of any privilege that
has been or may be asserted under this Agreement or otherwise.
5.4 Auditors and Audits; Annual and Quarterly Statements and Accounting.
Each party agrees that, for so long as Catalytica is required in accordance with
United States generally accepted accounting principles to consolidate CESI's
results of operations and financial position:
13
(a) Selection of Auditors. CESI shall not select a different accounting
firm from that used by Catalytica to serve as its (and its Subsidiaries')
independent certified public accountants ("CESI's Auditors") for purposes of
providing an opinion on CESI's consolidated financial statements without
Catalytica's prior written consent (which shall not be unreasonably withheld).
(b) Date of Auditors' Opinion and Quarterly Reviews. CESI shall use its
reasonable commercial efforts to enable the CESI Auditors to complete their
audit such that they will date their opinion on CESI's audited annual financial
statements on the same date that Catalytica's independent certified public
accountants ("Catalytica's Auditors") date their opinion on Catalytica's audited
annual financial statements, and to enable Catalytica to meet its timetable for
the printing, filing and public dissemination of Catalytica's annual financial
statements. CESI shall use its reasonable commercial efforts to enable the CESI
Auditors to complete their quarterly review procedures such that they will
provide clearance on CESI's quarterly financial statements on the same date that
Catalytica's Auditors provide clearance on Catalytica's quarterly financial
statements.
(c) Annual and Quarterly Financial Statements. CESI shall provide to
Catalytica on a timely basis all Information that Catalytica reasonably requires
to meet its schedule for the preparation, printing, filing, and public
dissemination of Catalytica's annual and quarterly financial statements. Without
limiting the generality of the foregoing, CESI will provide all required
financial Information with respect to CESI and its Subsidiaries to CESI's
Auditors in a sufficient and reasonable time and in sufficient detail to permit
CESI's Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to Catalytica's Auditors with respect to financial
Information to be included or contained in Catalytica's annual and quarterly
financial statements. Similarly, Catalytica shall provide to CESI on a timely
basis all financial Information that CESI reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination of
CESI's annual and quarterly financial statements. Without limiting the
generality of the foregoing, Catalytica will provide all required financial
Information with respect to Catalytica and its Subsidiaries to Catalytica's
Auditors in a sufficient and reasonable time and in sufficient detail to permit
Catalytica's Auditors to take all steps and perform all reviews necessary to
provide sufficient assistance to CESI's Auditors with respect to Information to
be included or contained in CESI's annual and quarterly financial statements.
(d) Identity of Personnel Performing the Annual Audit and Quarterly
Reviews. CESI shall authorize CESI's Auditors to make available to Catalytica's
Auditors both the personnel who performed or will perform the annual audits and
quarterly reviews of CESI and work papers related to the annual audits and
quarterly reviews of CESI, in all cases within a reasonable time prior to CESI's
Auditors' opinion date, so that Catalytica's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of CESI's
Auditors as it relates to Catalytica's Auditors' report on Catalytica's
financial
14
statements, all within sufficient time to enable Catalytica to meet its
timetable for the printing, filing and public dissemination of Catalytica's
annual and quarterly statements. Similarly, Catalytica shall authorize
Catalytica's Auditors to make available to CESI's Auditors both the personnel
who performed or will perform the annual audits and quarterly reviews of
Catalytica and work papers related to the annual audits and quarterly reviews of
Catalytica, in all cases within a reasonable time prior to Catalytica's
Auditors' opinion date, so that CESI's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of
Catalytica's Auditors as it relates to CESI's Auditors' report on CESI's
statements, all within sufficient time to enable CESI to meet its timetable for
the printing, filing and public dissemination of CESI's annual and quarterly
financial statements.
(e) Access to Books and Records. Subject to Section 5.3, CESI shall
provide Catalytica's internal auditors and their designees access to CESI's and
its Subsidiaries' books and records so that Catalytica may conduct reasonable
audits relating to the financial statements provided by CESI pursuant hereto as
well as to the internal accounting controls and operations of CESI and its
Subsidiaries. Similarly, subject to Section 5.3, Catalytica shall provide CESI's
internal auditors and their designees access to Catalytica's and its
Subsidiaries' books and records so that CESI may conduct reasonable audits
relating to the financial statements provided by Catalytica pursuant hereto as
well as to the internal accounting controls and operations of Catalytica and its
Subsidiaries
(f) Notice of Change in Accounting Principles. CESI shall give
Catalytica as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Separation Date. CESI will
consult with Catalytica and, if requested by Catalytica, CESI will consult with
Catalytica's independent public accountants with respect thereto. Catalytica
shall give CESI as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Separation Date.
(g) Conflict with Third-Party Agreements. Nothing in Sections 5.3 and
5.4 shall require CESI or Catalytica to violate any agreement with any third
party regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that CESI or Catalytica is required under Sections 5.3 and 5.4 to disclose
any such Information, it shall use all commercially reasonable efforts to seek
to obtain such third party's consent to the disclosure of such information.
5.5 Payment of Expenses. Except as otherwise provided in this Agreement
and in all respects subject to the obligations of CESI under the Indemnification
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Separation or the Distribution, all costs and expenses of the
parties hereto in connection with the Separation and the Distribution (including
underwriting discounts and commissions) shall be borne by the party incurring
such costs or expenses.
15
5.6 Dispute Resolution. If a dispute, controversy or claim arises between
the parties relating to the interpretation, performance, nonperformance,
validity or breach of this Agreement or any Ancillary Agreement, or otherwise
arising out of, or in any way related to this Agreement, any Ancillary Agreement
or the transactions contemplated hereby or thereby, including, without
limitation, any claim based on contract, tort or statute (but excluding any
controversy, dispute or claim if any third party is a party thereto)
("Dispute"), appropriate senior executives (e.g., director or V.P. level) of
each party who shall have the authority to resolve the matter shall meet to
attempt in good faith to negotiate a resolution of the Dispute prior to pursuing
other available remedies. The "Dispute Resolution Commencement Date" shall be
the date a party hereto delivers a notice to the other that it intends to invoke
the procedures of this Section 5.6. Prior discussion or negotiation between the
parties shall not be deemed to have established a Dispute Resolution
Commencement Date until such notice has been so delivered. Discussions and
correspondence relating to trying to resolve such Dispute shall be treated as
confidential information developed for the purpose of settlement and shall be
exempt from discovery or production and shall not be admissible in any
subsequent proceeding relating to such Dispute. If the senior executives are
unable to resolve the Dispute within thirty (30) days from the Dispute
Resolution Commencement Date, and either party wishes to pursue its rights
relating to such Dispute, then the Dispute will be mediated by a mutually
acceptable mediator appointed pursuant to the mediation rules of JAMS/Endispute
within thirty (30) days after written notice by one party to the other demanding
non-binding mediation. Neither party may unreasonably withhold consent to the
selection of a mediator or the location of the mediation. Both parties will
share the costs of the mediation equally, except that each party shall bear its
own costs and expenses, including attorney's fees, witness fees, travel
expenses, and preparation costs. The parties may also agree to replace mediation
with some other form of non-binding or binding form of alternative dispute
resolution ("ADR").
(a) Any Dispute which the parties cannot resolve through mediation
within ninety (90) days of the Dispute Resolution Commencement Date, unless
otherwise mutually agreed, shall be submitted to final and binding arbitration
under the then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), by three (3) arbitrators in the state of Delaware. Each
party shall appoint one arbitrator, obtain its appointee's acceptance of such
appointment, and deliver written notification of such appointment and acceptance
to the other party within fifteen (15) days after delivery of the demand for
arbitration. In the event a party fails to appoint an arbitrator or deliver
notification of such appointment to the other party within this time period,
upon request of either party, such arbitrator shall instead be appointed by the
AAA within fifteen (15) days of receiving such request. The two arbitrators
appointed in accordance with the above provisions shall appoint the third
arbitrator, obtain the appointee's acceptance of such appointment and notify the
parties in writing of such appointment and acceptance within fifteen (15) days
of their appointment. If the first two appointed arbitrators fail to appoint a
third arbitrator or notify the parties of that appointment within this time
period, then, upon request of either party, the
16
third arbitrator shall be appointed by the AAA within fifteen (15) days of
receiving such request. The third arbitrator shall serve as Chairman of the
Tribunal. The arbitrators will be instructed to prepare and deliver a written,
reasoned opinion stating their decision within thirty (30) days of the
completion of the arbitration. The prevailing party in such arbitration shall be
entitled to expenses, including costs and reasonable attorneys' and other
professional fees, incurred in connection with the arbitration (but excluding
any costs and fees associated with prior negotiation or mediation). The decision
of the arbitrator shall be final and non-appealable and may be enforced in any
court of competent jurisdiction. The use of any ADR procedures will not be
construed under the doctrine of laches, waiver or estoppel to adversely affect
the rights of either party. In the event of any mediation or arbitration in
accordance with this Section 5.6, the relevant parties shall not assert the
defenses of statute of limitations and laches arising for the period beginning
after the date the relevant party gave notice of such Dispute, and any
contractual time period or deadline under this Agreement or any Ancillary
Agreement to which such Dispute relates shall not be deemed to have passed until
such Dispute has been resolved.
(b) Any Dispute regarding the following is not required to be
negotiated, mediated or arbitrated prior to seeking relief from a court of
competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right; or
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to one of the parties or to others. However, the parties
to the Dispute shall make a good faith effort to negotiate and mediate such
Dispute, according to the above procedures, while such court action is pending.
(c) Continuity of Service and Performance. Unless otherwise agreed in
writing, the parties will continue to use good faith efforts to provide service
and honor all other commitments under this Agreement and each Ancillary
Agreement during the course of dispute resolution pursuant to the provisions of
this Section 5.6 with respect to all matters not subject to such dispute,
controversy or claim.
5.7 Governmental Approvals. To the extent that the Separation requires
any Governmental Approvals, the parties will use their reasonable commercial
efforts to obtain any such Governmental Approvals.
5.8 No Representation or Warranty. Catalytica does not, in this Agreement
or any other agreement, instrument or document contemplated by this Agreement,
make any representation as to, warranty of or covenant with respect to:
(a) the value of any asset or thing of value to be transferred to
CESI;
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to CESI;
17
(c) the absence of defenses or freedom from counterclaims with
respect to any claim to be transferred to CESI; or
(d) the legal sufficiency of any assignment, document or instrument
delivered hereunder to convey title to any asset or thing of value upon its
execution, deliver and filing.
Except as may expressly be set forth herein or in any Ancillary Agreement, all
assets to be transferred to CESI shall be transferred "AS IS, WHERE IS" and CESI
shall bear the economic and legal risk that any conveyance shall prove to be
insufficient to vest in CESI good and marketable title, free and clear of any
lien, claim, equity or other encumbrance.
5.9 Employee Agreements - Definition. As used in this Section 5.9,
"Employee Agreement" means the Conflicts, Confidential Information and
Assignment of Inventions Agreement and corresponding agreements in foreign
countries executed by each Catalytica employee.
(a) Survival of Catalytica Employee Agreement Obligations and
Catalytica's Common Law Rights. The Catalytica Employee Agreements of all CESI
Employees shall remain in full force and effect according to their terms;
provided, however, that none of the following acts committed by CESI Employees
within the scope of their CESI employment shall constitute a breach of such
Catalytica Employee Agreements: (i) the use or disclosure of Confidential
Information (as that term is defined in the Catalytica Employee Agreement) for
or on behalf of CESI, if such disclosure is consistent with the rights granted
to CESI and restrictions imposed on CESI under this Agreement, any Ancillary
Agreement or any other written agreement between the parties; (ii) the
disclosure and assignment to CESI of rights in proprietary developments authored
or conceived by the CESI Employee after the Separation Date and resulting from
the use of, or based upon intellectual property (whether patented or not) which
is retained by Catalytica; provided, however, that in no event shall such
disclosure and assignment be regarded as assigning the underlying intellectual
property to CESI; (iii) the rendering of any services, directly or indirectly,
to CESI to the extent such services are consistent with the assignment or
license of rights granted to CESI and the restrictions imposed on CESI under
this Agreement, any Ancillary Agreement or any other written agreement between
the parties; and (iv) solicitation of the employees of Catalytica by such CESI
Employee prior to the Distribution Date so long as such solicitation is
consistent with the rights granted to CESI and restrictions imposed on CESI
under this Agreement, any Ancillary Agreement or any other written agreement
between the parties. Further, Catalytica retains any rights it has under statute
or common law with respect to actions by CESI Employees unless such actions are
consistent with the rights granted to CESI and restrictions imposed on CESI
under this Agreement, any Ancillary Agreement or any other written agreement
between the parties.
18
(b) Assignment, Cooperation for Compliance and Enforcement.
(i) Catalytica hereby transfers and assigns to CESI its rights
under the Catalytica Employee Agreements of all CESI Employees to the extent
they related to the CESI Business and to the extent required to permit CESI to
enjoin, restrain, recover damages from or obtain specific performance of the
Catalytica Employee Agreements or obtain other remedies against any CESI
Employee who breaches his/her Catalytica Employee Agreement.
(ii) Catalytica and CESI each may separately enforce the
Catalytica Employee Agreements of CESI Employees to the extent necessary to
reasonably protect their respective interests, provided, however, that (i) CESI
shall not commence any legal action relating thereto without first consulting
with Catalytica's General Counsel or his/her designee and (ii) Catalytica shall
not commence any legal action relating thereto against any CESI Employee who is
at the time an employee of CESI without first consulting with CESI's General
Counsel or his/her designee.
(iii) Catalytica and CESI understand and acknowledge that matters
relating to the making, performance, enforcement, assignment and termination of
employee agreements are typically governed by the laws and regulations of the
national, federal, state or local governmental unit where an employee resides,
or where an employee's services are rendered, and that such laws and regulations
may supersede or limit the applicability or enforceability of this Section 5.9.
In such circumstances, Catalytica and CESI agree to take action with respect to
the employee agreements that best accomplishes the parties' objectives as set
forth in this Section 5.9 and that is consistent with applicable law.
5.10 Cooperation in Obtaining New Agreements.
(a) Catalytica understands that, prior to the Separation Date, CESI
has derived benefits under certain agreements and relationships between
Catalytica and third parties, which agreements and relationships are not being
assigned or transferred to CESI in connection with the Separation. Upon the
request of CESI, Catalytica agrees to make introductions of appropriate CESI
personnel to Catalytica's contacts at such third parties so that CESI may enter
into agreements or relationships with such third parties under substantially
equivalent terms and conditions, including financial terms and conditions, that
apply to Catalytica. Catalytica also understands that certain agreements between
Catalytica and third parties which are being assigned to CESI in connection with
the Separation may require the consent of the applicable third party. Catalytica
shall assist CESI in seeking and obtaining the consent of such third parties to
such assignment.
(b) CESI understands that, prior to the Separation Date, Catalytica
has derived benefits under certain agreements and relationships between CESI and
third parties, which agreements and relationships are not being assigned or
transferred to Catalytica in connection with the Separation. Upon the request of
Catalytica, CESI agrees to make
19
introductions of appropriate Catalytica personnel to CESI's contacts at such
third parties, and agrees to provide reasonable assistance to Catalytica, at
Catalytica's expense, so that Catalytica may enter into agreements or
relationships with such third parties under substantially equivalent terms and
conditions, including financial terms and conditions, that apply to CESI.
(c) The parties expect that the activities contemplated by this
Section 5.10 will be substantially completed by the Distribution Date, but in no
event will the parties have any obligations hereunder after the first
anniversary of the Distribution Date.
5.11 Insurance Matters. Effective as of the Distribution Date, CESI shall
be responsible for having in place and maintaining an insurance program for the
CESI Group.
5.12 Limitation on Liability. No party or any Subsidiary thereof shall
have any liability or claim against any other party or any Subsidiary of any
other party based upon, arising out of or resulting from any agreement,
arrangement, course of dealing or understanding existing on or prior to the
Distribution Date (other than the Merger Agreement, this Agreement or any
Ancillary Agreement) and any such liability or claim, whether or not in writing,
is hereby irrevocably canceled, released and waived.
ARTICLE 6
MISCELLANEOUS
6.1 IN NO EVENT SHALL ANY MEMBER OF THE CATALYTICA GROUP OR CESI GROUP BE
LIABLE TO ANY OTHER MEMBER OF THE CATALYTICA GROUP OR CESI GROUP FOR ANY
SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST
PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE)
ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE
FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS
FOR LIABILITIES AS SET FORTH IN THE INDEMNIFICATION AGREEMENT.
6.2 Entire Agreement. This Agreement, the Merger Agreement, the Ancillary
Agreements and the Exhibits and Schedules referenced or attached hereto and
thereto, constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and shall supersede all prior written and oral
and all contemporaneous oral agreements and understandings with respect to the
subject matter hereof and thereof.
6.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (regardless of the laws that
might
20
otherwise govern under applicable principles of conflicts of laws thereof)
as to all matters, including, but not limited to, matters of validity,
construction, effect, performance and remedies.
6.4 Forum Selection; Consent to Jurisdiction. All disputes arising out of
or in connection with this Agreement shall be solely and exclusively resolved by
a court of competent jurisdiction in the State of Delaware. The parties hereby
consent to the jurisdiction of the courts of the State of Delaware and the
United States District Court of the District of Delaware and waive any
objections or rights as to forum non conveniens, lack of personal jurisdiction
or similar grounds with respect to any dispute relating to this Agreement.
6.5 Termination. This Agreement and all Ancillary Agreements may be
terminated and the Distribution abandoned at any time prior to the Distribution
Date by and in the sole discretion of Catalytica without the approval of CESI.
This Agreement may be terminated at any time after the Effective Time of the
Merger by mutual written agreement of Catalytica and CESI. In the event of
termination pursuant to this Section 6.4, no party shall have any liability of
any kind to the other party or to any other Person.
6.6 Notices. Notices, offers, requests or other communications required
or permitted to be given by either party pursuant to the terms of this Agreement
and any Ancillary Agreement shall be given in writing to the respective parties
to the following addresses:
if to Catalytica: Catalytica, Inc.
000 Xxxxxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
21
With a copy to:
Synotex Company, Inc.
Xxx Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: 000-000-0000
and to:
DSM, N.V.
Legal Department
Het Xxxxxxxx 0, Xxxxxxx
Xxx Xxxxxxxxxxx
Attention: Ton C.M. van der Put, Esq.
Fax: 000-00-00-0000000
if to CESI: Catalytica Energy Systems, Inc.
000 Xxxxxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also
be sent by fax, confirmed by first class mail. All notices shall be deemed to
have been given on the date on which such notice is actually received.
6.7 Counterparts. This Agreement, including the Ancillary Agreements and
the Exhibits and Schedules hereto and thereto and the other documents referred
to herein or therein, may be executed in counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement.
6.8 Binding Effect; Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. Neither party may
assign this Agreement or any rights or obligations hereunder, without the prior
written consent of the other party, and any such assignment shall be void;
provided, however, either party may assign this Agreement to a successor entity
in conjunction with
22
such party's reincorporation. Neither party shall engage in any transaction or
series of transactions in which another entity becomes the owner of 50% or more
of the equity securities of such party unless the acquiror and any ultimate
parent entity shall have executed and delivered to the other party an agreement
confirming that such acquiror and/or ultimate parent entity shall, upon
consummation of such transaction or series of transactions, cause the relevant
party to continue to perform under the terms of this Agreement and each
Ancillary Agreement.
6.9 Severability. If any term or other provision of this Agreement or the
Exhibits or Schedules attached hereto is determined by a court, administrative
agency or arbitrator to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to either party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.
6.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of either party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement or the Exhibits or Schedules attached hereto are cumulative to, and
not exclusive of, any rights or remedies otherwise available.
6.11 Amendment. No change or amendment will be made to this Agreement or
the Exhibits or Schedules attached hereto except by an instrument in writing
signed on behalf of each of the parties to such agreement.
6.12 Authority. Each of the parties hereto represents to the other that
(a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement and each Ancillary Agreement, (b) the
execution, delivery and performance of this Agreement and each Ancillary
Agreement by it have been duly authorized by all necessary corporate or other
actions, (c) it has duly and validly executed and delivered this Agreement and
each Ancillary Agreement, and (d) this Agreement and each Ancillary Agreement is
a legal, valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.
6.13 Interpretation. The headings contained in this Agreement, in any
Exhibit or Schedule hereto are for reference purposes only and shall not affect
in any way the meaning
23
or interpretation of this Agreement. Any capitalized term used in any Exhibit or
Schedule but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.
6.14 Conflicting Agreements. In the event of conflict between this
Agreement and the Merger Agreement, the provisions of the Merger Agreement shall
prevail.
6.15 WHEREFORE, the parties have signed this Master Separation Agreement
effective as of the date first set forth above.
CATALYTICA, INC. CATALYTICA ENERGY SYSTEMS,
INC.
By:/s/ Xxxxxxxx X. Xxxxxxx By:/s/ Xxxxx X. Kitchen
-------------------------- ----------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxx X. Kitchen
Title: Chief Financial Officer Title: President and Chief Executive Officer
24
EXHIBITS
Exhibit A Trademark License Agreement
Exhibit B Employee Matters Agreement
Exhibit C Master Transitional Services Agreement
Exhibit D Real Estate Matters Agreement
Exhibit E Master Confidential Disclosure Agreement
Exhibit F Indemnification Agreement
Exhibit G Tax Sharing Agreement
Exhibit H Amended and Restated Cross License Agreement between Catalytica
and Catalytica Energy Systems, Inc.
25
