AMENDMENT NO. 2 TO CONTRIBUTION AND MERGER AGREEMENT

AMENDMENT NO. 2 TO CONTRIBUTION AND MERGER AGREEMENT

     This Amendment No. 2 to Contribution and Merger Agreement (this “ Amendment ”) is made and entered into as of September 20, 2007, by and among (i) Catalytica Energy Systems, Inc., a Delaware corporation (“ Catalytica ”), (ii) Renegy Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Catalytica (“ Holdings ”), (iii) Snowflake Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Holdings (“ Merger Sub ”), (iv) Renegy, LLC, an Arizona limited liability company (“ Renegy ”), (v) Renegy Trucking, LLC, an Arizona limited liability company (“ Renegy Trucking ”), (vi) Snowflake White Mountain Power, LLC, an Arizona limited liability company (“ Snowflake ” and, together with Renegy and Renegy Trucking, the “ Companies ”), (vii) Robert M. Worsley (“ R. Worsley ”), (viii) Christi M. Worsley (“ C. Worsley ”) and (ix) the Robert M. Worsley and Christi M. Worsley Revocable Trust (the “ Worsley Trust ” and, together with R. Worsley and C. Worsley, “ Worsley ”). All capitalized terms not otherwise defined herein shall have the meanings set forth in that certain Contribution and Merger Agreement (the “ Agreement ”) dated as of May 8, 2007, as amended, by and among Catalytica, Holdings, Merger Sub, the Companies and Worsley.

     WHEREAS, Section 11.12 of the Agreement provides that no supplement, modification or waiver of the Agreement shall be binding unless executed in writing by the Party to be bound thereby.

     WHEREAS, the Parties desire to amend certain provisions of the Agreement and to be bound by this Amendment.

     NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as follows:

1. The Amended and Restated Certificate of Incorporation of Holdings to be effective as of the Closing, the form of which is attached as Exhibit E to the Agreement, is hereby amended and restated in its entirety as set forth in Exhibit A hereto, and all references in the Agreement to the Certificate of Incorporation of Holdings effective as of the Closing shall refer to the Amended and Restated Certificate of Incorporation of Holdings as amended by this Amendment.

2. Section 6.13(e) is hereby amended and restated to read in its entirety as follows:

“Notwithstanding anything in this Agreement to the contrary, on or prior to the date that is ninety (90) days after the Closing (the “Outer Date”), if Catalytica or Holdings receives a bona fide written SCR-Tech Acquisition Proposal which the Board of Directors of Catalytica prior to the Closing and the Special Committee of Holdings after the Closing determines in good faith (after consultation with its independent financial advisor, if any, and outside counsel) is an SCR-Tech Superior Proposal, Catalytica, or Holdings, as the case may be, may enter into a definitive agreement with respect to such SCR-Tech Superior Proposal, and may sell the interests or assets of SCR-Tech (as hereinafter defined) in accordance with such definitive agreement, on or before the Outer Date. For the avoidance of doubt, any such transaction must be consummated on or prior to the Outer Date. To the extent that the net proceeds of such sale, after deducting all legal,

accounting and investment banking fees and other direct costs incurred by Catalytica or Holdings in connection therewith, exceed $7,500,000, then in such event, the number of Contribution Shares shall be reduced such that the percentage of Contribution Shares relative to all shares of Holdings Common Stock to be outstanding immediately following the Closing is reduced at the rate of 0.8% per million of excess net proceeds (with any amounts less than one million to be reduced on a pro rata basis). In the event of a transaction that occurs after the Closing for which an adjustment is to be made pursuant to this Section 6.13(e) , Worsley shall deliver to Holdings such number of shares as is determined in accordance with this Section 6.13(e) . For purposes of this Section 6.13(e) , any net proceeds resulting from a sale of the interests or assets of SCR-Tech shall be reduced in an amount, if any, by which the SCR-Tech Net Working Capital exceeds $0. For purposes of this Agreement, “ SCR-Tech Net Working Capital ” shall mean the excess, if any, of the current assets of SCR-Tech over the current liabilities of SCR-Tech, as determined in accordance with GAAP.”

3.		Section 6.13(h)(iv) is hereby amended and restated to read in its entirety as follows:
		““SCR-Tech Superior Proposal” means a bona fide SCR-Tech Acquisition Proposal made in writing with net proceeds that exceed $7,500,000. If the consideration in such SCR-Tech Acquisition Proposal is a publicly-traded security, the value of the consideration shall be based on the average closing price of such security for the ten trading days prior to the execution of the agreement for such SCR-Tech Acquisition Proposal. If the consideration consists of securities that are not publicly traded or other assets, such amount shall be determined in good faith by the Board of Directors of Catalytica, or Holdings after the Closing.”

4.		Section 6.20(d) is hereby amended and restated to read in its entirety as follows:
		“(d) to constitute, effective as of the Closing, the Board of Directors of Holdings such that:

     (i) the number of directors shall be fixed at seven (7) and the board shall be divided into three (3) classes;

     (ii) Class I directors shall have a term expiring one (1) year after Closing consisting of two directors who shall initially be Richard A. Abdoo and one vacancy to be filled by the Special Committee;

     (iii) Class II directors shall have a term expiring two (2) years after Closing consisting of R. Worsley and another director designated by R. Worsley, who shall be reasonably acceptable to Catalytica; and

     (iv) Class III directors shall have a term expiring three (3) years after Closing consisting of three directors who shall initially be William B. Ellis, Ricardo B. Levy and Susan F. Tierney.”

5. Section 8.1(b) of the Agreement is hereby amended and restated in its entirety to read as follows:

		“(b) by either Catalytica or Worsley and the Companies if the Closing shall not have occurred by October 15, 2007 for any reason; provided, however, that the right to terminate this Agreement under this Section shall not be available to any Party whose action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;”
6.		A subsection (c) is hereby added to Section 9.2 of the Agreement to read as follows:

“(c) After the initial term of the Class III directors, Worsley agrees to vote or have voted all shares of Holdings Common Stock beneficially owned by Worsley and any Worsley Affiliates to maintain at least three (3) Independent Directors on the Board of Directors of Holdings. For the purposes of this Agreement, “Independent Director” shall mean a person who: (i) satisfies all of the requirements of Rule 4200(a)(15) of the Nasdaq Marketplace Rules or any successor rule of Nasdaq or any rule of any other stock exchange applicable to Holdings defining the requirements for qualification as an “independent director”; and (ii) is not an Affiliate of Worsley.”

7. Section 9.10 of the Agreement is hereby amended and restated in its entirety to read as follows.

“9.10 Special Committee .

(a) The Certificate of Incorporation of Holdings immediately following the Effective Time shall provide that the Board of Directors of Holdings shall at all times maintain in effect a committee of not less than three (3) Independent Directors (the “ Special Committee ”), which shall, acting separately from any other member of the Board of Directors, have the exclusive authority pursuant to Section 141(a) of the Corporation Law and be empowered to, on behalf of Holdings, approve or disapprove any arrangement, contract, transaction, proposal or other matter involving Holdings in which any director, officer or holder of 10% or more of the outstanding Common Stock of Holdings has a direct or indirect financial interest. Any such arrangement, contract, proposal or other matter entered into without the approval of the Special Committee shall be void. The Class III Directors, voting separately as a class of directors, shall constitute the initial Special Committee. After the initial term of the Class III directors, the members of the Special Committee shall be appointed by a majority of Independent Directors then serving on the Board of Directors from among such Independent Directors. In addition to its general power and authority as set forth above, the Special Committee shall, and shall have the exclusive authority pursuant to Section 141(a) of the Corporation law to, take all actions and make all determinations which this Agreement provides shall be taken or made by the Special Committee, and to enforce the obligations of Worsley under this Agreement on behalf of Holdings, in each case subject to and in accordance with the provisions of this Agreement. Without limiting the generality of the foregoing, the

Special Committee, acting separately from any other members of the Board of Directors, shall have the exclusive authority and be empowered to, on behalf of Holdings:

(i) enforce the obligations of Worsley under this Agreement, including, without limitation, Worsley’s obligations under this Article IX , Worsley’s indemnification obligations under Article X and Article XI , the Registration Rights Agreement and Worsley’s obligations under the Overrun Guarantee;

(ii) and on behalf of Catalytica, making the determination pursuant to Section 11.3(d) whether to satisfy, in full or in part, any indemnification obligation through the payment of cash or issuance of stock, conducting the defense of any claim in respect of indemnification under this Agreement, and negotiate, enter into settlements and compromises of, and comply with orders of courts and awards of arbitrators with respect to any such claim, and take all other actions that are necessary or appropriate in the judgment of the Special Committee for the accomplishment of the foregoing;

(iii) administer, interpret and enforce the Registration Rights Agreement;

(iv) administer, interpret and enforce the Warrants, including assessing and making the determination of whether any Operating Milestone (as defined in the Warrants) has been achieved;

(v) administer, interpret and enforce Worsley’s Employment Agreement;

(vi) conduct such investigations as it deems necessary or appropriate to discharge its duties under the Certificate of Incorporation of Holdings;

(vii) retain separate legal counsel and any other experts and advisors as it deems necessary or advisable for the purpose of discharging its duties;

(viii) on or prior to the Outer Date, make determinations regarding an SCR-Tech Superior Proposal and negotiate terms and agreements related to any potential sale of the interests or assets of SCR-Tech pursuant to an SCR-Tech Superior Proposal;

(ix) make determinations as to whether to commence, settle and/or terminate litigation or any other proceeding or action in furtherance of the foregoing; and

(x) prior to the end of the initial term of the Class III directors, fill vacancies in the Class I or Class III directors of Holdings.

(b) The Parties agree that irreparable damage would occur in the event that any of the obligations of Worsley under this Article IX were not performed by Worsley in accordance with their specific terms or were otherwise breached. It is accordingly agreed that at all times, the Special Committee, on behalf of Holdings, shall be entitled to an injunction or injunctions to prevent breaches by Worsley of this Article IX and to enforce

specifically the obligations of Worsley under of this Article IX , this being in addition to any other remedy to which they are entitled at law or in equity.”

8. Except as specified in this Amendment, all terms and conditions of the Agreement shall continue in full force and effect, and any references therein to the Agreement shall refer to the Agreement as amended by this Amendment.

9. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.

[Signature Page to Amendment No. 2 to Contribution and Merger Agreement]

[Signature Page to Amendment No. 2 to Contribution and Merger Agreement]

EXHIBIT A

CERTIFICATE OF INCORPORATION OF HOLDINGS

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF

RENEGY HOLDINGS, INC.

     Renegy Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (the “ Corporation ”), certifies that:

     A. The name of the Corporation is Renegy Holdings, Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 1, 2007.

     B. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware and restates, integrates and further amends the provisions of the Corporation’s Certificate of Incorporation.

     C. The text of the Certificate of Incorporation is amended and restated to read as set forth in EXHIBIT A attached hereto.

     IN WITNESS WHEREOF, Renegy Holdings, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by [ insert name of officer ], a duly authorized officer of the Corporation, on [ insert date ].

		[ insert name ],
		[ insert title ]

EXHIBIT A

ARTICLE I

     The name of the corporation is Renegy Holdings, Inc. (the “ Corporation ”).

ARTICLE II

     The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at the foregoing address is The Corporation Trust Company.

ARTICLE III

     The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law (“ DGCL ”), as the same exists or as may hereafter be amended from time to time.

ARTICLE IV

1. Total Capital Authorized. ¹

     The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is Forty-Four Million Five Hundred Thousand (44,500,000) shares, comprised of Forty-Three Million (43,000,000) shares of Common Stock with a par value of $0.001 per share (the “ Common Stock ”) and One Million Five Hundred Thousand (1,500,000) shares of Preferred Stock with a par value of $0.001 per share (the “ Preferred Stock ”).

2. Preferred Stock.

     The Preferred Stock may be issued in one or more series at such time or times and for such consideration or considerations as the Board of Directors of the Corporation may determine. Each series shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. Except as may be expressly provided in this Amended and Restated Certificate of Incorporation, in