Document:

<PAGE>

                                                                    EXHIBIT 10.2

                                PROMISSORY NOTE
                                ---------------
                                      and
                                      ---
                                   AGREEMENT
                                   ---------

$300,000.00
-----------
                                                       Mountain View, California

     FOR VALUE RECEIVED, Dennis A. Orwig ("Orwig") promise(s) to pay to
Catalytica Combustion Systems, Inc. ("CCSI") or order, at 430 Ferguson Drive,
Mountain View, California the sum of Three Hundred Thousand and 00/100 dollars
($300,000.00), with interest at a rate of seven percent (7%) per annum from
the date(s) CCSI transfers the funds. Principal shall be payable on the
earlier of (1) five (5) years from the date of last signature below or (2)
when Orwig should sell, convey, or alienate his interest in the property
located at 11715 Skyline Boulevard, Los Gates, California 95033-9515 or any
part thereof, or shall be divested of his title or any interest therein any
manner or way, whether voluntarily or involuntarily; or (3) when Orwig ceases
to be an employee of CCSI or its affiliates.

     Orwig agrees, at the request of CCSI, to cause this note to be recorded by
the County Recorder's Office as a lien on the property described above and to
execute such other documents as CCSI deems necessary to secure a security
interest in the above-described property.  The purpose of this note is to allow
Orwig to purchase and refurbish the above-described property.

     In exchange for Orwig's promise to pay the principle plus interest as set
forth above and Orwig's granting to CCSI of the security interest in the above
described property, CCSI shall loan Orwig the $300,000.00 sum set forth above
which Orwig may obtain as a lump sum or in portions thereof by giving CCSI ten
(10) days written notice setting forth a request for withdrawal and the amount
required.  The incremental withdrawals may be made between the date(s) of last
signature below and July 30, 1998 at which time CCSI shall pay Orwig any
remaining balance not previously withdrawn.

<PAGE>

     CCSI agrees to execute a subordination agreement in the event the
undersigned refinances the mortgage on the property described above.

     The principal and accrued interest payable to CCSI shall be reduced by
twenty percent (20%) of its original value for every year (twelve month
period) that Orwig continues to be an employee of CCSI or its affiliates
beginning with the date on which this agreement is last signed below.
Accordingly, assuming Orwig remains as an employee of CCSI or its affiliates
for the entire five (5) year term of this agreement, the principle and accrued
interest shall be reduced to zero and this Promissory Note shall become null
and void. In such a case, CCSI shall take all actions necessary to remove the
lien on the property described above.

     Should this note or any portion thereof be referred to any attorney for
collection, a reasonable attorney's fee shall be owed by the undersigned.
Principal shall be payable in lawful money of the United States of America.

Agreed to by                             Agreed to by
Catalytica Combustion Systems Inc.       Dennis A. Orwig

/s/ Ricardo B. Levy                          /s/ Dennis A. Orwig
----------------------------------           ----------------------------------
                         Signature                                    Signature

CEO, Catalytica, Inc.                        20 Jan. 1998
----------------------------------           ----------------------------------
                             Title                                         Date
1/20/98
----------------------------------
                              Date

                                       2
<PAGE>

                                PROMISSORY NOTE
                                ---------------
                                      and
                                      ---
                                   AGREEMENT
                                   ---------

$400,000.00
-----------
                                                       Mountain View, California

         FOR VALUE RECEIVED, Dennis A. Orwig ("Orwig") promise(s) to pay to
Catalytica Combustion Systems, Inc. ("CCSI") or order, at 430 Ferguson Drive,
Mountain View, California the sum of Four Hundred Thousand and 00/100 dollars
($400,000.00), with interest at a rate of seven percent (7%) per annum beginning
on the date(s) the funds are transferred hereunder. Principal shall be payable
on the earlier of (1) five (5) years from the date of last signature below or
(2) when the undersigned should sell, convey, or alienate his interest in the
property located at 11715 Skyline Boulevard, Los Gates, California 95033-9515 or
any part thereof, or shall be divested of his title or any interest therein any
manner or way, whether voluntarily or involuntarily; or (3) when Orwig ceases to
be an employee of Catalytica, Inc.

         Orwig agrees, at the request of CCSI, to cause this note to be recorded
by the County Recorder's Office as a lien on the property described above and to
execute such other documents as CCSI deems necessary to secure a security
interest in the above-described property. The purpose of this note is to allow
Orwig to purchase and refurbish the above-described property.

         In exchange for Orwig's promise to pay the principle plus interest as
set forth above and Orwig's granting to CCSI of the security interest in the
above described property, CCSI shall loan Orwig the $400,000.00 sum set forth
above which Orwig may obtain as a lump sum or in portions thereof by giving CCSI
ten (10) days written notice setting forth a request for withdrawal and the
amount required. The incremental withdrawals may be made between the date(s) of
last signature below and July 30, 1998 at which time CCSI shall pay Orwig any
remaining balance not previously withdrawn.

         As additional security for this Promissory Note, the undersigned also
pledges any and all vested and invested stock options in Catalytica, Inc.,
("Catalytica") and it's affiliate, CCSI, which the undersigned may hold or
acquire during the term of this Promissory Note. In this regard, the undersigned
agrees that he will not encumber the aforesaid stock options or underlying
shares in anyway without the prior written consent of Catalytica, Inc. and that,
if Catalytica so requests, the undersigned will execute a security agreement of
form suitable to Catalytica, Inc. to formalize this security interest. The loan
is expected to be repaid from appreciation in the stock of Catalytica (above
$10.00 per share) and in the stock of CCSI, and the corresponding increase in
the value of Orwig's employee stock options. Orwig may choose to exercise his
options at any time after they become vested and apply the gain (market price
less exercise price) to
<PAGE>

reduction of the principal amount of the loan. (In the case of CCSI options the
market price shall be the fair market value, assuming full conversion of all
outstanding convertible securities of the CCSI. The spread between the fair
market value and the exercise price may be offset against the second loan
through a notice by Orwig of his desire to do so and cancellation of the related
options). However, in any event on the fifth anniversary of the loan the
outstanding principal is due. Orwig may either: a) exercise his vested options
and pay the full balance of the loan, b) exercise his options, pay a portion of
the loan and pay the balance in cash from a refinancing or other sources or c)
pay the balance due in cash from a refinancing or other sources.

         Catalytica agrees to execute a subordination agreement in the event the
undersigned refinances the mortgage on the property described above.

         Should this note or any portion thereof be referred to any attorney for
collection, a reasonable attorney's fee shall be owed by the undersigned.
Principal shall be payable in lawful money of the United States of America.

Agreed to by                                    Agreed to by
Catalytica Combustion Systems Inc.              Dennis A. Orwig

/s/ Ricardo B. Levy                             /s/ Dennis A. Orwig
-----------------------------                   --------------------------------
                    Signature                                          Signature

CEO, CATALYTICA, INC.                           20 Jan. 1998
-----------------------------                   --------------------------------
                        Title                                               Date

1/20/98
-----------------------------
                         Date

                                       2
<PAGE>

                                 MORTGAGE NOTE
                                 =============

THIS Mortgage Note is made on March 29, 1996

   BETWEEN the borrower(s), DENNIS A. ORWIG and F. BRIDGETTE ORWIG, husband and
wife whose address is R.D. 5, Box 66, Ligonier, Pennsylvania 15658 referred to
as "I,"

   AND the Lender, CATALYTICA COMBUSTION SYSTEMS, INC. whose address is 430
Ferguson Drive, Mountain View, California 94043-5272 referred to as the
"Lender." If more than one Borrower signs this Note, the word "I" shall mean
each Borrower named above. The word "Lender" means the original Lender and
anyone else who takes this Note by transfer.

Borrower's Promise to Pay Principal and Interest.  In return for a loan that I
received, I promise to pay $280,000.00 (called "principal"), plus interest to
the order of the Lender.  Interest, at a yearly rate of 7.0% will be charged on
that part of the principal which has not been paid from January 1, 1997 until
the earlier of December 31, 1997 or the date of the sale and closing of title to
the property located at 149 Cokebury Toad (sic), Califon, New Jersey or
termination of employment of Dennis A. Orwig from Catalytica Combustion Systems
INC.

* This loan is interest free through December 31, 1996.

Payments.  I will pay principal and interest in one lump sum upon the maturity
date of this loan, which is defined as the date of the sale and closing of title
to the real estate commonly known as 149 Cokesbury Road, Califon, New Jersey or
December 31, 1997, or the date of termination of employment of Dennis A. Orwig
from Catalytica Combustion Systems, Inc. whichever occurs first.  The maturity
date may be extended by mutual agreement of the parties in writing and signed by
both parties.  All payments will be made to the Lender at the address shown
above or to a different place if required by the Lender.

Early Payments.  I have the right to make payments at any time before they are
due.  There shall be no penalty for partial or full payments made before the
maturity date of this Note.

Late Charge for Overdue Payments.  If the Lender has not received any payment
within 30 days after its due date, I will pay the Lender a late charge of five
(5)% of the payment.  This charge will be paid with the late payment.

Third Party Purchaser.  Notwithstanding anything in this Mortgage Note to the
contrary, it is expressly agreed that if the property at 149 Cokesbury Road,
Califon, New Jersey has not been sold by December 31, 1997, then the Lender
shall have the right to engage a third party home purchaser that will acquire
the property at an appraised value minus a discount.  Any discount will be
shared on an equal basis between the Borrower and the Lender herein, up to a
total discount of $ 100,000.00.

Mortgage to Secure Payment.  The Lender has been given a Mortgage dated March
29, 1996, to protect the Lender if the promises made in this Note are not kept.
I agree to keep all promises made in the Mortgage covering property I own
located at 149 Cokesbury Road in the Township of Lebanon in the County of
Hunterdon and State of New Jersey.  All terms of the Mortgage are made part of
this Note.

Default.  If I fail to make payment required by this Note within 60 days after
its due date, or if I fail to keep any other promise I make in this Note or in
the Mortgage, the Lender may declare that I am in default on the Mortgage and
this Note.  Upon default, I must immediately pay the full amount of all unpaid
principal, interest, other amounts due on the Mortgage and this Note and the
Lender's costs of collection and reasonable attorney fees.

Waivers.  I give up my right to require that the Lender do the following:  (a)
to demand payment ("called presentment"); (b) to notify me of nonpayments
(called "notice of dishonor"); and (c) to obtain an official certified statement
showing a nonpayment (called a "protest").  The Lender may exercise any right
under this Note, the Mortgage or under any law, even if Lender has delayed in
exercising that right or has agreed in an earlier instance not to exercise that
right.  Lender does not waive its right to declare that I am in default by
making payments or incurring expenses on my behalf.

Each Person Liable.  The Lender may enforce any of the provisions of this Note
against any one or more of the Borrowers who sign this Note.

No Oral Charges.  This Note can only be changed by an agreement in writing
signed by both the Borrower(s) and the Lender.

Situs.  This Note and the Mortgage that secures it shall be governed by the laws
of the State of New Jersey.

Signatures.  I agree to the terms of this Note.  If the Borrower is a
corporation, its proper corporate officers sign and its corporate seal is
affixed.

Witnessed by:                      /s/ Dennis A. Orwig                   (Seal)
                                   -------------------------------------
                                   Dennis A. Orwig

/s/ Christine A. Smith             /s/ F. Bridgette Orwig                (Seal)
--------------------------------   -------------------------------------
                                   F. Bridgette Orwig<PAGE>

                                                                    EXHIBIT 10.3

GENXON
------
POWER SYSTEMS

                                PROMISSORY NOTE
                                ---------------
                                      and
                                      ---
                                   AGREEMENT
                                   ---------

$150,000.00
-----------

                                                       Mountain View, California

     FOR VALUE RECEIVED, Patrick T. Conroy ("Conroy") promise(s) to pay to
GENXON Power Systems, Inc. ("GENXON") or order, at 430 Ferguson Drive, Mountain
View, California the sum of One Hundred and Fifty Thousand and 00/100 dollars
($150,000), without interest. Principal shall be payable on the earlier of (1)
October 1, 2002; or (2) when Conroy should sell, convey, or alienate his
interest in the property located at 18453 Las Cumbres Road, Los Gatos,
California, 95030 or any part thereof, or shall be divested of his title or any
interest therein in any manner or way, whether voluntarily or involuntarily; or
(3) when Conroy ceases to be an employee of GENXON or its affiliates.

     Conroy agrees to cause this note to be recorded by the County Recorder's
Office as a lien on the property described above.

     GENXON agrees to execute a subordination agreement in the event the
undersigned refinances the mortgage on the property described above.

     The principal payable to GENXON shall be reduced by twenty percent (20%) of
its original value for every year (twelve month period) that Conroy continues to
be an employee of GENXON or its affiliates beginning with the date Conroy became
an employee of GENXON (October 1, 1997). Accordingly, assuming Conroy remains as
an employee of GENXON or its affiliates for the entire five (5) year term of
this agreement the principal shall be reduced as follows:
<PAGE>

          Employee as                    Remaining
          of (Date)                      Principal of Note
          -----------                    -----------------
          October 1, 1998                $120,000

          October 1, 1999                $ 90,000

          October 1, 2000                $ 60,000

          October 1, 2001                $ 30,000

          October 1, 2002                $ -0-

     Therefore, if Conroy remains as an employee of GENXON or its affiliates
until October 1, 2002 this Promissory Note shall become null and void and GENXON
shall take any and all actions necessary to remove the lien on the property
described above.

     Should this note or any portion thereof be referred to any attorney for
collection, a reasonable attorney's fee shall be owned by Conroy. Principal
shall be payable in lawful money of the United States of America.

Agreed to by                          Agreed to by
GENXON Power Systems, Inc.            Patrick T. Conroy

/s/ Lawrence W. Briscoe               /s/ Patrick T. Conroy
--------------------------            --------------------------
                                              Patrick T. Conroy

Member of the Board of Members        Nov. 18, 1997
------------------------------        --------------------------
                   Title                                  Date

November 18, 1997
--------------------------
                    Date

                                       2

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