Document:

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                                                                   EXHIBIT 10.34
                                                                   -------------

                                PROMISSORY NOTE

U.S. $3,010,000.00                                              Phoenix, Arizona

                                                                  March 18, 2002
                                                                  --------

     FOR VALUE RECEIVED, CATALYTICA ENERGY SYSTEMS, INC., a Delaware
corporation, promises and agrees to pay to the ARIZONA STATE COMPENSATION FUND,
a corporation established pursuant to Arizona Revised Statutes (S)23-981 et
seq., or order, the principal sum of THREE MILLION TEN THOUSAND AND NO/100
DOLLARS ($3,010,000.00) with interest on the unpaid principal balance from the
date of distribution of principal in accordance with this Note, until paid, at
the rate that is from time to time applicable as hereinafter set forth.

     Principal and interest shall be payable at Phoenix, Arizona, or such other
place as the holder hereof may designate, in sixty (60) consecutive monthly
installments, computed on the basis of a 25-year amortization schedule,
commencing on the Commencement Date (as hereinafter defined) and continuing on
the same day of each successive month thereafter until the Maturity Date (as
hereinafter defined) when all unpaid principal, all accrued and unpaid interest,
and any other amounts payable hereunder shall be due and payable. Principal,
interest and all other sums payable hereunder shall be paid in lawful money of
the United States of America.

     1. DEFINITIONS.

     As used in this Promissory Note, the following terms shall have the
following meanings:

          a. "Commencement Date" shall mean_________________________________.

          b. "Deed of Trust" shall mean the Deed of Trust and Assignment of
     Rents of even date herewith executed by Maker, as Trustor, in favor of
     First American Title Insurance Company, as Trustee, and Payee, as
     Beneficiary, which Deed of Trust is granted as security for this Note.

          c. "Default Interest Rate" shall mean interest at a rate equal to six
     percent (6%) per annum in excess of the Interest Rate in effect immediately
     prior to the default.

          d. "Holder" shall mean the Payee and any assignee or assignees to whom
     this Note shall be endorsed.

          e. "Interest Rate" shall mean seven and three-eighths percent (7.375%)
     per annum.

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          f. "Loan Documents" shall mean (i) the Deed of Trust, and (ii) all
     other documents and instruments which by their terms secure Maker's
     obligations under this Note.

          g. "Loan Year" shall mean each one-year period beginning on the
     Commencement Date and each anniversary of the Commencement Date.

          h. "Maker" shall mean CATALYTICA ENERGY SYSTEMS, INC., a Delaware
     corporation.

          i. "Maturity Date" shall mean _____________________________.

          j. "Monthly Installment Payments" shall mean the Monthly Installment
     Payments and the payments of principal, plus interest at the Interest Rate
     that is/are to be made pursuant to Paragraph 2 of this Note beginning on
     the Commencement Date and continuing for sixty (60) consecutive months.

          k. "Note" shall mean this Promissory Note in the principal sum of
     THREE MILLION TEN THOUSAND and No/100 DOLLARS ($3,010,000.00).

          l. "Payee" shall mean the ARIZONA STATE COMPENSATION FUND, a
     corporation established pursuant to Arizona Revised Statutes (S)23-981 et.
     seq.

          m. "Property" shall mean the real property and improvements thereon as
     described in Exhibit "A" of the Deed of Trust.

     2. MONTHLY INSTALLMENT PAYMENT

     Commencing on the Commencement Date and continuing on the same day of each
month for sixty (60) consecutive months, principal, plus interest at the
Interest Rate, shall be payable in Monthly Installment Payments which shall each
be in the amount of TWENTY ONE THOUSAND NINE HUNDRED NINETY NINE and 48/100
Dollars ($21,999.48), which monthly principal and interest payments are computed
on the basis of a 25-year amortization schedule.

     3. APPLICATION OF PAYMENTS.

     Each amount received by the Holder shall be applied to the following items
in the following order, or as the Holder may otherwise elect if the Maker is
then in default hereunder or under any Loan Document:

          a. Any amount due and unpaid hereunder, or under any Loan Document,
     other than a Monthly Installment Payment.

          b. Any due and unpaid interest hereunder.

                                      -2-

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          c. Then to unpaid principal; provided, however, that Maker complies in
     all respects with the provisions of this Note with respect to partial or
     full prepayments.

     4. LATE CHARGE.

     Time is of the essence of payment. Upon failure to make any Monthly
Installment Payment, or pay any other amount due hereunder within ten (10) days
of the date due, Maker shall pay a charge not to exceed five percent (5%) of the
Monthly Installment Payment, or other amount due hereunder which is not paid
within such ten-day period. The assessment or collection by the Holder of any
such charge shall be without prejudice to the Holder's rights under Paragraph 8
of this Note. The foregoing five percent (5%) late charge shall not apply to the
payment of principal to be made upon the Maturity Date.

     5. DEFAULT.

     If Maker fails to make any Monthly Installment Payment within ten (10) days
of its due date, or fails to pay any other amount due under any Loan Document on
its due date, or if any default occurs under this Note, or if any Event of
Default occurs under the terms of any of the Loan Documents, then and in any of
such events, the remaining installments of principal, at the option of Holder
which shall be exercised by written notice sent to Maker, and in the Holder's
sole discretion, shall at once become due and payable, and the unpaid principal
balance, together with (i) all accrued and unpaid interest, and (ii) any other
amounts payable hereunder and under the Loan Documents, shall thereupon bear
interest at the Default Interest Rate. The Default Interest Rate shall be in
effect only during the time any default remains uncured by Maker, and interest
shall again be charged at the Interest Rate after any default has been cured by
Maker. All amounts not paid when due and within any applicable grace period,
whether or not as a result of acceleration of the unpaid principal balance, and
whether or not the Holder has notified the Maker of the occurrence of an Event
of Default, shall bear interest at the Default Interest Rate, and at such time
as judgment is obtained for any amounts owing under this Note or under any of
the Loan Documents, interest shall continue to accrue on the amount of the
judgment, until it is paid, at the Default Interest Rate.

     6. OPTIONAL FULL PREPAYMENT.

     Maker shall at no time and in no event have any right to prepay all or any
part of the principal balance, except as set forth as follows: The Loan will be
closed and not subject to prepayment by Maker during the first two (2) Loan
Years. Commencing with the third (3rd) Loan Year, Maker shall have the right to
prepay the entire (but not less than the entire) principal balance on any date
upon which a Monthly Installment Payment is due, provided that:

          a. The Holder shall have received not less than sixty (60) days' prior
     written notice of the prepayment, delivered no earlier than sixty (60) days
     prior to the end of the second (2nd) Loan Year, specifying the date upon
     which the prepayment is to be made; and

                                       -3-

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          b. At the time of the giving of the Notice and at the time specified
     for prepayment, Maker shall have made all payments required under this Note
     and no Event of Default shall have occurred and be continuing under the
     Deed of Trust, Note, and Loan Documents, or any other documents securing
     the Loan.

          c. The prepayment shall be accompanied by all payments due under this
     Note, and under the Loan Documents, plus a reinvestment fee equal to four
     percent (4%) of the outstanding principal balance if paid at any time
     during the third (3rd) Loan Year; a reinvestment fee equal to two percent
     (2%) of the outstanding principal balance if paid at any time during the
     fourth (4th) Loan Year; a reinvestment fee equal to one percent (1%) of the
     outstanding principal balance if paid at any time during the first six (6)
     months of the fifth (5th) Loan Year. Anything in this Paragraph 6 to the
     contrary notwithstanding, any prepayment by reason of casualty or
     condemnation proceeds shall not be subject to a reinvestment fee or
     prepayment penalty.

          Anything in this Paragraph 6 to the contrary notwithstanding, there
     shall be no reinvestment fee or prepayment penalty for prepayment of the
     Loan during the last one hundred eighty (180) days of the fifth (5th) Loan
     Year.

     7. SECURITY.

     The indebtedness evidenced by this Note is secured by the Deed of Trust and
by the other documents and instruments referred to in the Loan Documents. The
Loan Documents contain additional rights with respect to the Holder's right to
accelerate the principal balance of this Note.

     8. MISCELLANEOUS.

          a. Maker and any endorsers and guarantors of this Note jointly and
     severally waive diligence, demand, presentment for payment, protest and
     notice of nonpayment and of protest, notice of default, notice of
     acceleration, and all other notices or demands of any kind. They jointly
     and severally consent, without notice to them and without release of their
     liability, to extensions or accommodations given by the Holder hereof, to
     the release, or exchange of any security or any Loan Document, and to the
     release, in whole or in part, of any other Maker, endorser, or guarantor;
     and they each agree to make payment without the prior resort of the Holder
     hereof to any security or against any other maker or endorser.

          b. Maker and any endorsers and guarantors of this Note jointly and
     severally agree to pay all costs of collection. Costs of collection
     include, without limitation, reasonable attorneys' fees if this Note is
     placed in the hands of attorneys for collection, whether or not suit is
     brought, and any fees incurred in the United States Bankruptcy Court,
     together with all court costs and other expenses incurred in the
     prosecution of suit, or any claim in the United States Bankruptcy Court.

          c. Notwithstanding any provision herein or in any document or
     instrument now or hereinafter securing this Note, the total liability for
     payments in the nature of

                                       -4-

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     interest shall not exceed the limits now imposed, or hereafter imposed if
     such limits shall be higher, by the applicable laws of the State of
     Arizona, and this Note shall be construed according to the laws of the
     State of Arizona.

          d. Failure of the Holder to exercise any option hereunder shall not
     constitute a waiver of the right to exercise the same in the event of any
     subsequent default, or in the event of continuance of any existing default.

          e. Any notice to Maker provided for in this Note shall be deemed given
     when it is deposited in the United States mail, postage prepaid, addressed
     to Maker, at the property address shown on the Holder's records, or to such
     other address as Maker may designate by notice to Holder.

          f. The Holder may, at its option, upon the request of Maker, extend
     the time for payment of the indebtedness or reduce payments thereon or
     accept a renewal note or notes therefore and any such extension, reduction
     or renewal shall not release the undersigned or any endorser or guarantor
     on any liability hereunder.

          g. Nothing contained herein shall be deemed or construed to constitute
     Maker and Payee or any other Holder partners or joint venturers. The only
     relationship between Maker and Payee or other Holder is that of debtor and
     creditor.

          h. The indebtedness evidenced by this Note is secured by, among other
     documents, a Deed of Trust and Assignment of Rents of even date herewith,
     and reference is made to the Deed of Trust for additional rights as to
     acceleration of the principal balance of this Note.

     9. LIMITED RECOURSE
        ----------------

     This Note shall be "nonrecourse" to Maker and any officer, shareholder,
member or limited or general partner of any of them and their respective
affiliates and their respective officers, agents, directors, employees,
attorneys, designees, successors and assigns and the Holder agrees that it will
not exercise any right to institute any action against Maker or any officer,
shareholder, member or limited or general partner or any of them and their
respective affiliates and their respective officers, agents, directors,
employees, attorneys, designees, successor and assigns for the payment of any
sum of money or the performance of any other obligation which is, or may be,
payable or due under the Deed of Trust, this Note, the Security Agreement or all
Loan Documents. Notwithstanding the foregoing, nothing contained herein shall be
deemed to prejudice the rights of the Holder, as defined in this Note, (a) to
foreclose by trustee's sale or judicial foreclosure the Deed of Trust or to
enforce any of its other rights or remedies under any documents securing this
Note relating to the Property; (b) to recover from Maker and/or any officer,
shareholder, member, or limited or general partner of Maker any funds, damages
or costs incurred as a result of fraud, intentional misrepresentation or waste
by Maker and/or any officer, shareholder, member, or limited or general partner
of Maker; (c) to recover any damage due to waste occurring subsequent to a
five-day written notice to Maker of an event of default by or on behalf of the
Maker from and after the date hereof; (d) to recover from Maker

                                      -5-

<PAGE>

and/or any officer, shareholder, member, or limited or general partner of Maker
any condemnation or insurance proceeds, or other funds or payments attributable
to the Property misappropriated by Maker and/or any officer, shareholder,
member, or limited or general partner of Maker or any affiliate of Maker; (e) to
recover any real property taxes owed at the time Holder obtains title to the
Property; (f) after the occurrence of a default and upon 5-days' written notice
to Maker, to recover any tenant security deposits, prepaid rents or other
similar sums paid to, received by Maker in connection with the operation of the
Property subsequent to the default; (g) after the occurrence of a default and
upon 5-days' written notice to Maker, to recover any gross revenue, income or
profit from the Property received subsequent to the occurrence of a default
hereunder sufficient to pay any portion of the indebtedness secured by the Deed
of Trust securing this Note, operating and maintenance expenses of the Property,
Insurance premiums for the Property, deposits required to be made into a reserve
account for replacement or other sums required by the documents securing this
Note to be paid or deposited, to the extent such sums were not paid or deposited
during such period; (h) subject to the provisions below, to recover from Maker
costs, including those of investigation and clean-up, incurred in connection
with the presence, use or release on, under or about the Property of hazardous
or toxic substances; or (i) to collect from Borrower, and, under subsections
(b), (d), (f) and (g) only, from any officer, shareholder, member, or general
partner of Borrower, reasonable attorneys' fees incurred in collecting any of
the foregoing. Any amounts owed pursuant to the foregoing shall be payable upon
demand by Holder and shall bear interest from the date of demand at the Default
Interest Rate.

     With regard to (h) above nothing contained herein shall be construed to
limit the right of Maker: (i) at its option, to be exercised within ten (10)
days following Maker's receipt of the notice from Holder described below, to
elect to take steps which may be required to contest, satisfy or discharge any
such liability, in which event Holder shall permit Maker to take such steps for
so long as Maker shall be acting diligently and in accordance with the
applicable environmental laws, provided Maker shall post any bond or other
security required by the applicable environmental laws or as reasonable required
by Holder, (ii) to perform or pay for any clean-up of hazardous materials or
(iii) to pursue its legal remedies against any person or entity who may be
responsible for the payment or discharge of such liabilities or the costs
thereof. Holder shall give Maker prompt notice in writing of any violation of
any environmental law or lien or charge against the Property with respect to the
release or presence of any hazardous material at the Property.

                                      -6-

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     IN WITNESS WHEREOF, this Note has been executed the date first above
written.

                               CATALYTICA ENERGY SYSTEMS, INC.
                                a Delaware corporation

                               By:  /s/  Craig N. Kitchen
                                    -----------------------------
                                    Craig N. Kitchen
                                    Its President

                          Address:  Attn: Craig N. Kitchen
                                    430 Ferguson Drive
                                    Mountain View, CA 94030

                                      -7-

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                            AUTHORIZATION TO COMPLETE

                                 PROMISSORY NOTE

To:  Arizona State Compensation Fund

     c/o Bank One Trust Company, N.A.
     Trust Real Estate Department
     P.O. Box 71
     Phoenix, Arizona 85001-0071

     Attached to this Authorization is a copy of a Promissory Note, the original
executed version of which is being delivered concurrently herewith to you. The
undersigned, the makers of the Promissory Note, authorize Teresa Reichwein, to
complete the Promissory Note to filling in the due date for the first
installment payment due thereafter, which shall be the first day of the second
month after the month in which the proceeds of the loan evidenced by the
Promissory Note are disbursed to or for the account of the undersigned; the
maturity date(s) of the Promissory Note, which maturity date(s) shall be five
(5) years after the Commencement Date (as Commencement Date is defined in the
Note); and any other dates left blank in the Promissory Note.

         DATED: March 18, 2002.
                      --

                                         CATALYTICA ENERGY SYSTEMS, INC.
                                          a Delaware corporation

                                         By:  /s/  Craig N. Kitchen
                                              -------------------------------
                                              Craig N. Kitchen
                                              Its President

4180493 / 500-0885

                                      -8-<PAGE>

                                                                   EXHIBIT 10.24
                              EMPLOYMENT AGREEMENT

     This Agreement is made on September 25, 2001 (the "Effective Date") by and
     between InterTrust Technologies Corporation, a Delaware corporation, with
     places of business at 5511 Staples Mill Road, Richmond, Virginia and 4750
     Patrick Henry Drive, Santa Clara, CA 95054 ("Company") and David Lockwood
     an individual residing at 2798 Broadway San Francisco, CA 94115
     ("Employee")

                                   WITNESSETH:

     WHEREAS Employee and Company desire to effect an employment arrangement
under the terms and conditions in this Agreement;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises made herein and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, Company and Employee
agree as follows:

1.   Employment. As of September 25, 2001, Company employs Employee as Executive
Vice Chairman, reporting to the Chairman. Employee accepts such employment.
Company and Employee hereby revoke, terminate and void all prior written or oral
employment agreements or employment arrangements previously made.

2.   Term.

     2.1 Employee's employment with Company will continue for an indefinite term
unless and until it is terminated in accordance with the provisions of this
Agreement. The employment relationship will be "at will". Either party may
terminate this Agreement at any time and for any reason, with or without cause,
by giving the other party two (2) weeks written notice. At its option, Company
may provide Employee with two (2) weeks pay in lieu of notice.

     2.2 During the first ninety (90) days of Employee's employment, two (2)
weeks notice of termination need not be given, and either party may terminate
this Agreement immediately, with or without cause, by giving the other party
written notice of termination.

3.   Compensation.

     For all services rendered under this Employment Agreement by Employee,
Company shall pay Employee a basic gross salary of $200,000 per year, payable in
periodic installments which shall be approximately equal in amount, in a manner
consistent with the accounting practices adopted by Company, and in no event
less frequently than once per month. .

     3.1 Company acknowledges and agrees to pay Employee his/her full basic
salary during the term of this Agreement, so long as s/he is willing and able to
perform his/her duties and obligations and has not defaulted under this
Agreement.

4.   Duties and Responsibilities of Employee. Employee shall devote
substantially all his/her business time and attention to the practice of his/her
profession for Company. The expenditure of reasonable time for teaching,
personal or outside business, charitable and professional activities shall not
constitute a breach of this Agreement if such activities do not materially
interfere with Employee's performance of his/her duties and obligations.
Employee specifically agrees to place his/her duties to Company above all other
activities and will abandon or curtail outside activities if so directed by
Company if in its opinion there exists a conflict or other reasonable grounds
for abandoning or curtailing such activities.

5.   Authority and Powers of Company. Subject to the provisions of paragraph
1, Company shall have the power to direct, control and supervise Employee's
duties and the manner of and time for performing said duties.

6.   Expenses. In accordance with general corporate policies, Employee shall
be reimbursed for reasonable, authorized expenses related to the performance of
his/her duties including (but not limited to): automobile and transportation
expenses; entertainment expenses; and all other items of authorized, reasonable
and necessary professional expenses incurred by Employee in the performance of
his/her duties as a Corporate employee.

                                       1

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7.   Fringe Benefits. Employee shall be entitled to participate in any
Corporate plans or agreements, as applicable, regarding retirement, health, life
insurance and other related fringe benefits, in accordance with the terms and
conditions of each.

8.   Vacations and Other Time-Off. Employee shall be entitled to fifteen (15)
days annual vacation, with full Basic Salary, and at times approved by Company,
in addition to sick leave and holidays, in accordance with general corporate
policies.

9.   Miscellaneous.

     9.1 This Agreement may be amended, altered or changed only through a
written document signed by Employee and Company.

     9.2 This Agreement and the agreements executed concurrently herewith
entitled Non-Competition Agreement and Employee Confidentiality and Invention
Agreement constitute the entire understanding between the parties with respect
to the employment by Company of Employee, the termination of Employee's
employment, and the other subject covered. It supersedes any and all prior
discussions, agreements and understandings between Employee and Company. While
Company's personnel policies and fringe benefit programs may be changed from
time to time, the "at will" termination provisions of this Agreement may not be
changed except by means of a written agreement specifically entered into for
such purpose, as provided above in paragraph 9.1.

     9.3 All provisions of this Agreement are severable and no provision hereof
shall be affected by the invalidity of any other such provisions.

10.  The rights and obligations under this Agreement shall in all respects
be governed by the laws of the Commonwealth of Virginia, and venue in any legal
action shall exist exclusively in the United States District Court, for the
Eastern District of Virginia (Alexandria Division) and/or, as relevant, the
Commonwealth courts in such location. Employee hereby agrees to the jurisdiction
of such United States District Court and agrees not to assert any objection to
the jurisdiction or venue of such Court.

IN WITNESS WHEREOF, the Parties hereto have set their hands.

         InterTrust Technologies Corporation

     By: /s/ Victor Shear
         ----------------------
         Victor Shear

         /s/David Lockwood
         ----------------------
         David Lockwood

                                       2

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                            NON-COMPETITION AGREEMENT

     This Agreement is made on September 25, 2001 (the "Effective Date") by and
     between InterTrust Technologies Corporation, a Delaware corporation, with
     places of business at 5511 Staples Mill Road, Richmond, Virginia and 4750
     Patrick Henry Drive, Santa Clara, CA 95054 ("Company") and David Lockwood
     an individual residing at 2798 Broadway San Francisco, CA 94115
     ("Employee")

WHEREAS, the Company wishes to employ Employee in the position of Executive Vice
Chairman, and Employee is willing to accept such position; and

WHEREAS Company wishes to assure itself that Employee will keep in confidence
and not disclose any information disclosed to Employee by the Company during the
term of Employee's employment; and

WHEREAS Company further wishes to assure itself that Employee will not compete
with the Company after the termination of Employee's employment; and

WHEREAS Employee is willing to agree not to so compete with the Company;

NOW THEREFORE, in consideration of the promises set forth herein and intending
to be legally bound, the parties hereto agree as follows:

1.   Employee shall not, while an employee of the Company and for a period of
three (3) years thereafter, without the prior written consent of the Chief
Executive Officer of the Company, either directly or indirectly operate or
perform any advisory or consulting services for, invest in, or otherwise operate
or become associated with (collectively "Associate With"), in any capacity, any
company, partnership, organization, proprietorship, or other entity which
manufactures, buys, sells, or distributes products or performs services which
compete with the digital rights management products or services provided by the
Company within the states of Maryland, Virginia and California and such other
areas in which the Company does business directly or indirectly (a "Competitive
Entity"); except that, notwithstanding the foregoing, Employee shall be entitled
to Associate With an investment fund, provided that (a) such fund does not
invest a substantial portion of its portfolio in a Competitive Entity; and (b)
Employee agrees not to be involved in any analysis or evaluation relating to, or
facilitation of, any investment by such fund in a Competitive Entity.

Employee hereby agrees to not, at any time, without prior written consent of the
Company, directly or indirectly induce or attempt to induce any employee, agent
or other representative or associate of the Company to terminate its
relationship with the Company, or in any way directly or indirectly interfere
with such a relationship or a relationship between the Company and any of its
suppliers, customers or employees.

2.   Employee acknowledges and agrees that compliance with the agreements set
forth in this document is necessary to protect the Company, and that a breach of
any of these agreements will result in irreparable and continuing damage to the
Company for which there will be no adequate remedy at law. Employee hereby
agrees that in the event of any such breach of any of said agreements, the
Company, and its successors and assigns, shall be entitled to injunctive relief
and to such other and further relief as is proper under the circumstances.

                                       3

<PAGE>

3.   The rights and obligations under this Agreement shall in all respects be
governed by the laws of the Commonwealth of Virginia, except as relates to
conflict of laws principles, and in any disputes arising under this Agreement,
jurisdiction and venue shall exist exclusively in the United States District
Court for the Eastern District of Virginia, (Alexandria Division), or the
Commonwealth courts, as appropriate, and Employee hereby agrees to the
jurisdiction of such courts and agrees not to assert any objection to the
jurisdiction or venue of such court. If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to time, duration, scope, activity or subject, by a court
of competent jurisdiction, such court shall exercise discretion in reforming the
provisions of this Agreement to the end that Employee shall be subject to
provisions and restrictions which are enforceable under the circumstances and
closest to the covenants set forth herein.

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands.

     InterTrust Technologies Corporation           Employee Signature

     By: /s/ Victor Shear                          /s/David Lockwood
         -----------------------------             -----------------------------
         Victor Shear                              David Lockwood

                                       4

<PAGE>

                EMPLOYEE CONFIDENTIALITY AND INVENTION AGREEMENT

     This Agreement is made on September 25, 2001 (the "Effective Date") by and
     between InterTrust Technologies Corporation, a Delaware corporation, with
     places of business at 5511 Staples Mill Road, Richmond, Virginia and 4750
     Patrick Henry Drive, Santa Clara, CA 95054 ("Company") and David Lockwood
     an individual residing at 2798 Broadway San Francisco, CA 94115
     ("Employee")

WHEREAS, the Company now employs or intends, as Executive Vice Chairman, to
employ Employee and Employee wishes to continue in or accept such employment;
and
WHEREAS, it is likely that Employee may have access to or contribute to the
development of Confidential Information and may be involved in the discovery or
the development of ideas or Inventions; and
WHEREAS, the Company requires that Employee execute this Agreement in order to
protect valuable trade secrets and other valuable intellectual property of
Company and Employee is willing to execute this Agreement.
NOW THEREFORE, in consideration of the promises contained herein the parties
agree as follows:

1.   Definitions. For purposes of this Agreement:

     (a) "Confidential Information" means information disclosed to or known by
Employee as a consequence of, or through employment by, Company (including
information conceived, originated, discovered, or developed by Employee), which
is not generally known to the public and which relates to research, development,
trade secrets, know-how, Inventions, technical data, manufacturing techniques,
engineering, marketing, merchandising and/or selling of Company products or
processes; and also includes information entrusted to the Company by third
parties under restrictions relating to Confidentiality which are disclosed to,
or become known by, Employee.

     (b) "Inventions" means discoveries, concepts, ideas and/or improvements to
existing technology, whether or not patentable or copyrightable, and all other
subject matter as is ordinarily comprehended by the term "invention", reasonably
related to any activities of Company, which includes, but is not limited to,
processes, machines, products, compositions of matter, formulas, computer
programs and techniques, software and software developments, as well as
improvements thereof and expressions thereof. The term Invention: (i) includes
(a) any discoveries, concepts, ideas and/or improvements which are related to
demonstrably anticipated research and/or development of Company, or (b) any
discoveries, concepts, ideas and/or improvements developed, discovered, or
originated in connection with employee's employment with Company; but (ii) shall
not include any discoveries, concepts, ideas, and/or improvements developed by
the Employee otherwise than in connection with his/her employment and not using
Confidential Information or any resources, facilities, or assets of the Company.

2.   Employee agrees that s/he shall promptly, in such form and detail as is
prescribed by Company, record and keep a complete and permanent written record
of information relating to the conception, origination, discovery or development
of Confidential Information and/or Inventions.

3.   Employee agrees that, during the term of Employee's employment by
Company, and for a period of one (1) year after such term, s/he shall:

     (a) Inform Company promptly and fully of any and all Inventions by a
written report describing in detail each such Invention;

     (b) Apply, at Company's request and expense, for United States and foreign
letters patent either in Employee's name or as Company shall otherwise direct;

     (c) Assign to Company all of Employee's rights, title and interest in and
to any Inventions, and to applications for United States and foreign letters
patent granted upon Inventions, and all right, title and interest in and to all
Confidential Information related thereto, and hereby agrees that Company and/or
its authorized agent shall have full control over all such patent applications,
including without limitation the right to amend or abandon the same; and

     (d) Sign and deliver promptly to Company such written documents,
certificates or other instruments, testify in any legal proceedings, and do such
other acts, things, or deeds as may be necessary in the opinion of Company or
its agents to secure, obtain and maintain for Company exclusive rights in, and
United States and foreign letters patent and/or copyrights for, any and all such
Inventions or other matters relating to the Confidential Information.

4.   The Company shall have the right, without additional or further payment
or consideration to Employee, to make and use in its business, and to make, use
and sell processes, machines, products, compositions of matter, designs,
software, and services derived from any discoveries, concepts, ideas, and
improvements to existing technology, whether or not patentable or copyrightable,
which are

                                       5

<PAGE>

not within the scope of Inventions as herein above defined but which are
conceived of or made by Employee during the hours in which s/he is employed by
the Company or with the use or assistance of the Company facilities, materials,
or personnel.

5.   Except as required in Employee's duties to Company, Employee shall never
directly or indirectly use, disseminate, lecture upon, publish articles
concerning, or otherwise disclose ("Disclose" or "Disclosure") to anyone not
confidentially bound to the Company without first obtaining the prior written
consent of Company and in no event shall said direct or indirect use and/or
Disclosure occur except in strictest accordance with the rules established by
the Company concerning the handling of Confidential Information, said rules
having been provided to the Employee (via concerning under what circumstances
direct or indirect use and/or Disclosure may be made, said rules being expanded
or otherwise modified from time to time by the Company in its sole discretion,
e-mail communication, printed notices, or any other reasonable means of notice).
Employee agrees that if s/he is served with any subpoena or other compulsory
judicial or administrative process calling for production of Confidential
Information, s/he will immediately notify Company in order that it may take such
action as it deems necessary to protect its interest.

6.   Prior to undertaking any other engagement, consulting assignment or
employment with or for any person, firm, corporation, association, partnership
or any other third person during the term of Employee's employment by Company
which utilizes or involves subject matter related to activities of the type in
which Company is involved or engaged, Employee shall first fully disclose the
nature of such proposed engagement, assignment or employment to Company and
obtain Company's written consent.

7.   Upon termination of Employee's employment with Company, Employee shall
deliver to and leave with Company any and all objects, materials, devices, or
substances, including without limitation all documents, records, notebooks,
recordings, drawings, prototypes, models, schematic diagrams, computer programs
(regardless of the media on which they are stored) and similar repositories of,
or objects which describe, depict, contain constitute, reflect or record
Confidential Information, and all copies thereof, then in Employee's possession
or under his/her control, whether or not prepared by Employee. Employee hereby
agrees that the Company may notify any future employer of the existence of this
Agreement and/or agreements executed concurrently herewith.

8.   The parties agree that of a breach by Employee of paragraph 5 of this
Agreement will cause Company to suffer irreparable harm and that remedies at law
will not adequately compensate Company for such breach. Therefore, and in
addition to any legal remedies available to it, Company shall be entitled to
obtain injunctive or other equitable relief against Employee.

9.   Employee hereby acknowledges and agrees that this Agreement shall not in
any manner be construed as an employment agreement, and that Employee's
continued employment with Company shall be subject to termination or renewal in
accordance with the Employment Agreement between the Employee and the Company of
the same date as this Employee Confidentiality and Invention Agreement.

10.  In any litigation rising out of this Agreement, the prevailing party
will be entitled to recovery of all reasonable costs and attorney's fees,
including costs and fees on appeal. The rights and obligations under this
Agreement shall in all respects be governed by the laws of the Commonwealth of
Virginia and venue in any legal action shall exist exclusively in the United
States District Court for the Eastern District of Virginia (Alexandria Division)
or the Commonwealth courts as appropriate Employee hereby agrees to the
jurisdiction of such United States District Court and agrees not to assert any
objection to the jurisdiction or venue of such Courts. The provisions of this
Agreement shall not be construed as limiting any rights or remedies that the
Company may otherwise have under applicable law. In case any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to time, duration, scope, activity or subject, by a court
of competent jurisdiction, such court shall exercise discretion in

                                       6

<PAGE>

11.  reforming the provisions of this Agreement to the end that Employee
shall be subject to provisions and restrictions which are enforceable under the
circumstances and closest to the covenants set forth herein.

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands.

     InterTrust Technologies Corporation            Employee Signature

     By: /s/ Victor Shear                           /s/David Lockwood
         ------------------                         ----------------------------
         Victor Shear                               David Lockwood

                                                    September 25, 2001
                                                    ----------------------------
                                                    Date

                                       7

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