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                                                                   Exhibit 10.25

                                                    430 Ferguson Drive
                                                    Mountain View, CA 94043-5272
                                                    650.960.3000
[LOGO] OF CATALYTICA ENERGY SYSTEMS                 650.965.4345 fax
                                                    www.CatalyticaEnergy.com
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                         CONSULTING SERVICES AGREEMENT
                         -----------------------------

     This agreement made and entered into and effective as of the 1/st/ day of
January 2001, by and among John A. Urquhart,
hereinafter called "Consultant", Catalytic Energy Systems Inc, located at 430
Ferguson Drive, Mountain View, California, 94043;

                              W I T N E S S E T H :
                              - - - - - - - - - -

     WHEREAS, Catalytic Energy Systems Inc, (collectively referred to herein as
the "Clients", are desirous of retaining Consultant on the terms and conditions,
and for the consideration hereinafter set forth; and

     WHEREAS, Consultant is desirous of providing consulting services to the
Clients on such terms and conditions and for such consideration;

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties do hereby agree as follows:

     (1)  Term: This agreement will commence on January 1, 2001 and shall extend
          ----
          through December 31, 2001 (the "Term"). The Term of this Agreement may
          be extended by the written agreement of the parties.

     (2)  Position and Services:
          ---------------------

          A.   When requested by the Clients, Consultant will consult with
               senior officers of the Clients regarding the development and
               implementation of an integrated strategic business plan and
               regarding such other matters concerning the Clients' business and
               operations as they may request from time to time during the term
               of this Agreement.
               The services to be provided by Consultant pursuant to paragraph A
               of this Agreement are personal to Consultant and may not be
               assigned By Consultant.

     (3)  Compensation and Benefits:
          -------------------------

          A.   During the term of this Agreement, Consultant shall be paid a fee
               Of Twenty Five Thousand Dollars ($25,000.) to be paid on a
               quarterly basis at $6250.00 per quarter (ie; March, June,
               September, December.
          B.   Company shall pay Consultant for all reasonable travel and
               transportation expenses, actually incurred by Consultant in
               performance of services requested by the Clients under this
               Agreement, as authorized and approved in writing by the Chairman
               or the President of the Company.

                                                                 [LOGO OF XONON]



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     (4)  Confidentiality of Clients' Business:  Consultant acknowledges that
          ------------------------------------
Clients' business is highly competitive and that Clients' books, records and
documents, clients' technical information concerning their products, equipment,
services, and processes, procurement procedures and pricing techniques, the
names of and other information (such as credit and financial data) concerning
Clients' customers and business affiliates, all comprise confidential business
information and trade secrets of the Clients which are valuable, special, and
unique proprietary assets of the Clients.  Consultant further acknowledges that
protection of Clients' confidential business information and trade secrets
against unauthorized disclosure and use is of critical importance to the Clients
in maintaining their competitive position.  Accordingly, Consultant hereby
agrees that consultant will not, at any time during or after the term of this
Agreement, make any unauthorized disclosure of any confidential business
information or trade secrets of the Clients, or make any use thereof, except for
the benefit of, and on behalf of, the Clients.  However, Consultant,s obligation
under this Section 4 shall not extend to information which is or becomes part of
the public domain or is available to the public by publication or otherwise than
through the Consultant, nor to information given through testimony under oath
that may be required by a court of law or pursuant to law.  The provisions of
this Section 4 shall survive the termination of this Agreement.

     (5)  Conflict of Interest:  Consultant agrees to use Consultant's best
          --------------------
          efforts, skill and abilities so long as Consultant's services are
          retained hereunder to promote the best interest of the Clients and
          their business. As part of the consideration for the compensation to
          be paid to Consultant hereunder, and as an additional incentive for
          the Clients to enter into this Agreement, the Clients and Consultant
          agree to the noncompetitive provisions of this Section (5). During the
          Term of this Agreement, Consultant agrees that, unless prior written
          approval of the Chairman of Company, or other officer of Company
          designated by the Chairman, is obtained, Consultant will not directly
          or indirectly for Consultant or for others;

          (i)  conduct, advise, counsel, or otherwise assist any competitor,
               customer or supplier of the Clients or any affiliate which, in
               any manner, would have, or is likely to have, an adverse effect
               upon the Clients or any affiliate:;

          (ii) consult, advise, counsel, or otherwise assist any Federal or
               State regulatory agency on any matter or in a regulatory
               proceeding which, in any manner, would have, or is likely to
               have, an adverse affect upon the Clients or any affiliates;

               Consultant understands that the foregoing restrictions may limit
          Consultants ability to engage in a business similar to Clients'
          business during the period provided for above, but acknowledges that
          Consultant will receive sufficiently high renumeration and other
          benefits from the Clients hereunder to justify such restriction. The
          Clients shall be entitled to enforce the provisions of this Section
          (5) by resorting to appropriate legal and equitable action.


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Page Three

     (6)  Idemnification:
          --------------

          (A)  Consultant hereby indemnifies and agrees to protect, defend, and
               hold harmless the Clients, their directors, officers, and
               employees from and against all claims, suits, demands, damages,
               losses, costs and expenses brought by any person firm, or
               corporation for (i) injuries to or the death of Consultant, or
               employees and agents of the Consultant, or damage to or loss of
               property of Consultant, or employees and agents of Consultant
               arising from or in connection with Consultant's performance of
               services under this Agreement, including the sole or contributory
               negligence of the Clients, and (ii) injuries to or the death of
               third parties, or damage to or loss of property or third parties
               arising from or in accordance with Consultant's gross negligence
               or willful misconduct.

          (B)  The Clients hereby indemnify and agree to protect, defend, and
               hold harmless Consultant, Consultant's agents and employees from
               and against all claims, suits, demands, damages, losses, costs
               and expenses brought by any person, firm, or corporation for
               injuries to or the death of any employees of the Clients, or
               damage to or loss of property of the Clients arising from
               Clients' negligence, including the contributory negligence of
               Consultant.

     (7)  Independent Contractor:
          ----------------------

          (A)  The parties hereto agree that the services rendered by Consultant
               in the fulfillment of the terms and obligations of this Agreement
               shall be as an independent contractor and not as an employee, and
               with respect thereto, Consultant is not entitled to the benefits
               provided by Clients to their employees including, but not limited
               to, group insurance and participation in Client's employee
               benefit and pension plans.

          (B)  Consultant shall be responsible for payment of all taxes
               including Federal, State, and local taxes arising out of
               Consultant's activities in accordance with this contract,
               including by way of illustration but not limitation, Federal and
               State income tax, Social Security tax, Unemployment Insurance
               taxes, and any other taxes or business license fees as required.

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Page Four

     (8)  Notices:  Except as otherwise provided in this Agreement, all notices
          -------
required or permitted by the terms hereof shall be sent by Certified Mail to
following address if sent to the Clients, then to:

                        Catalytic Energy Systems, Inc.
                        430 Ferguson Drive
                        Mountain View, California, 94043

          and if sent to Consultant, to Consultant's address set forth at the
          beginning of this Agreement.

     (9)  Entire Agreement; Modifications:   This Agreement constitutes the
          -------------------------------
entire agreement of the parties with regard to the subject matter hereof,
supercedes any and all prior agreements with respect to Consultant's engagement
by Company and contains all of the covenants, promises, representations,
warranties and agreements between the parties with respect to Consultant's
engagement hereunder. Each party to this Agreement acknowledges that no
representation, inducement, promise or agreement, oral or written, has been made
by any party, which is not embodied herein, and that no agreement, statement, or
promise relating the engagement of Consultant hereunder, which is not contained
in this Agreement shall be valid or binding. Any modification of this Agreement
will be effective only if it is in writing and signed by each of the parties.


                                              JOHN A. URQUHART

                                              /s/ John A. Urquhart
                                              --------------------------------


                                              CATALYTIC ENERGY SERVICES, INC.


                                              By: /s/ Craig N. Kitchen
                                                 -----------------------------
                                              Name:
                                              Title:




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                              Employee Invention
                              ------------------

                                      and

                      Confidential Information Agreement
                      ----------------------------------


     IN CONSIDERATION of my employment by Catalytica, Inc. ("Catalytica)" and
the compensation to be paid to me in connection with such employment:

     1.  I will promptly disclose to Catalytica in writing all inventions
(including new contributions, concept ideas, developments, discoveries, and
improvements thereof of know-how related thereto, whether patentable or not)
conceived or made by me, alone or with others,while employed by Catalytica. I
will not disclose to Catalytica or induce Catalytica to use any inventions or
confidential information belonging to others, nor will I use, directly or
indirectly, inventions or confidential information belonging to others,
including any previous employer, in my performance of work for Catalytica.

     2.  I will assign and do hereby assign to Catalytica my entire rights to
each invention described in Paragraph 1, and I will assist Catalytica, at its
expense, to obtain, renew, and enforce patents for the inventions in all
countries and will execute, acknowledge, and deliver all documents necessary or
desirable for vesting in Catalytica all my rights, title and interest in and to
the inventions, and in and to Letters Patents of the United States and other
countries. Catalytica and I agree that this Paragraph 2 shall not apply to
inventions that qualify fully under the provisions of California Labor Code,
2870, a copy of which is attached to this Agreement and incorporated herein by
this reference.

     3.  Because of my employment by Catalytica, I may have access to and
acquire technologies, know-how, or other information of a confidential nature
concerning Catalytica experimental and development work, trade secrets, secret
procedures, business matters or affairs, including, but not limited to,
information relating to inventions, disclosures, processes, systems, methods,
formulas, patents, patent applications, machinery, materials, research
activities and plans, cost of production, contract forms, prices, volume of
sales, promotional methods, and lists of names or classes of customers. I will
not disclose any such information to any person or entity either during or
subsequent to my employment, without Catalytica's prior written consent, except
to such an extent as may be necessary in


                                                                Catalytica, Inc.
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the ordinary course of performing my duties as an employee of Catalytica. I
understand that upon written request Catalytica will advise me in writing as to
whether any specific item of information is classified by Catalytica as being
confidential and, in the absence of such request, all such information shall be
deemed confidential. Information shall, for purposes of this Agreement, be
considered to be confidential if not known by the trade generally, even though
such information has been disclosed to one or more third parties pursuant to
distribution agreements, joint research agreements, or other agreements entered
into by Catalytica or any of its affiliates.

     4.   "Confidential Information" means information disclosed to me or known
to me as a consequence of or through my employment by Catalytica, whether or not
related to my duties at Catalytica, and includes trade secrets or any other
like information of value relating to the business and/or field of interest of
Catalytica or of any corporation, firm, or partnership directly or indirectly
controlled or by controlling Catalytica, or in which any the aforesaid have more
than twenty-five percent (25%) ownership interest.

          (a)  I shall use my best efforts and exercise utmost diligence to
protect and guard Confidential Information. Except, as required in my duties to
Catalytica, I will never directly, indirectly, or otherwise use, disseminate,
disclose, lecture upon, or publish articles concerning Confidential Information.

          (b)  I shall not, for my account or as an officer, member employee,
consultant, representative, or advisor of another, during my employment by
Catalytica and thereafter, for any reason whatsoever, use Confidential
Information in engineering, development, manufacture, research, or sales
relating to any compound, product, equipment, process, or material that is or
was involved in any performed at any time by me for Catalytica. However, the
foregoing provision shall not prohibit me from engaging in any work at any time
after leaving the employ of Catalytica provided that Confidential Information
will not be involved in such work. The provisions of this Paragraph 4(b) shall
not be construed as limited to any extent the continuing obligation of me
pursuant to the provisions of Paragraph 4(a).

     5.   I represent that to the best of my knowledge, there is no other
contract to assign inventions that is now in existence between myself and any
other person,

                                                                Catalytica, Inc.
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corporation, or partnership, unless I have so indicated on the back of this
Agreement and unless a copy of any such other contract is attached hereto.

     6.   Upon termination of employment with Catalytica for any reason, I will
turn over to Catalytica all notes, memoranda, records, reports, drawings,
blueprints, manuals, materials, and data containing Confidential Information of
Catalytica including all copies thereof, that I may then have in my possession
or under my control. I may retain any notes, memoranda, records, reports,
drawings, blueprints, manuals, materials, and data which belonged to me at the
time of commencement of my employment with Catalytica and, to the extent of
same, do not contain Confidential Information, any reprints, journal articles
and meeting proceedings accumulated by me while at Catalytica.

     7.   It is contemplated that ownership of certain inventions falling within
the scope of this Agreement may be deemed by Catalytica unnecessary to the
furtherance of its business. On notice in writing to this effect, designating
the invention signed by an officer of Catalytica, title to the designated
inventions shall revert to me; provided, however, that such invention, alienated
by Catalytica prior to the date of such notice , shall not be affected by such
reversion of title, and provided further that Catalytica and its successors in
business shall retain an irrevocable, non-exclusive, royalty-free right and
license to make, have made for it, sell, and use in connection with its own
business embodiments or practices of all such inventions as are designated by
Catalytica.

     8.   This Agreement shall be governed by the laws of the State of
California. Each covenant shall be independent and separable from all other
covenants, and the invalidity of a covenant shall not affect the enforceability
of any of the other covenants. For purposes of this Agreement, the business of
Catalytica shall include the business of any corporation, firm, or partnership,
directly or indirectly controlled by or controlling Catalytica or in which any
of the foregoing including Catalytica, have more than twenty-five percent (25%)
controlling interest. For any violation of these covenants, a restraining order
and/or an injunction may be issued against me in addition to any other rights
Catalytica may have. In the event Catalytica is successful in any suit or
proceeding brought or instituted by Catalytica against me to enforce any of
these covenants or on accounts of any damages sustained by Catalytica by reason
of my violation of any of these covenants, I will pay to Catalytica in addition
to other costs and damages,

                                                                Catalytica, Inc.
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reasonable attorneys' fees to be fixed by the Court. This Agreement shall inure
to benefit of any successor or assignee of Catalytica and shall be binding upon
my heirs, administrations, and representative.


     Signed this 15 day of January 2001, effective from and after the date of my
employment by Catalytica.


                                               EMPLOYEE

                                                 /s/ J A Urquhart
                                               -------------------------------
                                                   Signature

                                                     John A. Urquhart
                                               -------------------------------
                                                   Print Name

                                               _______________________________
                                                   Street, Apt, No.

                                               _______________________________
                                                   City, State, Zip Code




                                                                Catalytica, Inc.
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