<PAGE>
EXHIBIT 10.4
PROMISSORY NOTE
AND
AGREEMENT
$150,000.00
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Mountain View, California
FOR VALUE RECEIVED, Peter B. Evans ("Evans") promise(s) to pay to
Catalytica Combustion Systems, Inc. ("CCSI") or order, at 430 Ferguson Drive,
Mountain View, California the sum of One Hundred and Fifty Thousand and 00/100
dollars ($150,000.00), with interest at a rate of six percent (6%) per annum
from the date(s) CCSI transfers the funds. Principal shall be due and payable
in four (4) equal annual (every 12 months) installments beginning at the end of
the fourth year from the funding date (or on June 3, 2003) with the accumulated
interest being due and payable in a lump sum at the time the last principal
installment becomes due and payable (or on June 3, 2006), unless Evans should
(1) sell, convey, or alienate his interest in the property located at 25259 La
Loma Drive, Los Altos Hills, California 94022 or any part thereof, or shall be
divested of his title or any interest therein any manner or way, whether
voluntarily or involuntarily; or (2) cease to be an employee of CCSI or its
affiliates, in either of which case the principal and accumulated interest shall
become immediately due and payable.
Evans 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
Evans to purchase the above-described property.
In exchange for Evans' promise to pay the principal plus interest as set
forth above and Evans' granting to CCSI of the security interest in the above
described property, CCSI shall loan Evans the $150,000.00 sum set forth above
which Evans may obtain as a lump sum or in portions thereof by giving CCSI
reasonable written notice setting forth a request for withdrawal and the amount
required.
CCSI agrees to execute a subordination agreement in the event Evans
refinances the mortgage on the property described above.
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Should this note or any portion thereof be referred to any attorney for
collection, a reasonable attorney's fee shall be owned by Evans. Principal shall
be payable in lawful money of the United States of American
Agreed to by Agreed to by
Catalytica Combustion Systems, Inc. Peter B. Evans
/s/ Dennis A. Orwig /s/ Peter B. Evans
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Signature Signature
C.E.O. July 20, 1999
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Title Title
18 Aug. '99
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Date
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PROMISSORY NOTE
and
AGREEMENT
$100,000.00
-----------
Mountain View, California
FOR VALUE RECEIVED, Peter B. Evans ("Evans") promise(s) to pay to
Catalytica Combustion Systems, Inc. ("CCSI") or order, at 430 Ferguson Drive,
Mountain View, California the sum of One Hundred Thousand and 00/100 dollars
($100,000.00), with interest at a rate of six percent (6%) per annum from the
date(s) CCSI transfers the funds. Unless forgiven as set forth below, the
principal and interest shall be payable (1) when Evans should sell, convey, or
alienate his interest in the property located at 25259 La Loma Drive, Los Altos
Hills, California 94022 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 (2) when Evans ceases to be an employee of CCSI or its
affiliates.
Evans 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
Evans to purchase the above-described property.
In exchange for Evans' promise to pay the principal plus interest as set
forth above and Evans' granting to CCSI of the security interest in the above
described property, CCSI shall loan Evans the $100,000.00 sum set forth above
which Evans may obtain as a lump sum or in portions thereof by giving CCSI
reasonable written notice setting forth a request for withdrawal and the amount
required.
CCSI agrees to execute a subordination agreement in the event Evans
refinances the mortgage on the property described above.
Beginning at the end of the second year or twelve month period after the
date of full loan funding (June 14, 1999), the principal payable to CCSI shall
be reduced or forgiven by twenty-five percent (25%) of its original value for
every year (twelve month period) that Evans continues to be an employee of CCSI
or its affiliates. Further, at the end of the fifth twelve month or year period
(June 14, 2004), the accumulated interest shall also be forgiven. Accordingly,
assuming Evans remains as an employee of CCSI or its affiliates for the entire
five (5) year term after loan funding, of this Agreement, the principal and
accrued interest shall be reduced to zero and this Promissory Note shall
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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 Evans. Principal shall
be payable in lawful money of the United States of America.
Agreed to by Agreed to by
Catalytica Combustion Systems, Inc. Peter B. Evans
/s/ Dennis A. Orwig /s/ Peter B. Evans
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Signature Signature
C.E.O. July 20, 1999
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Title Date
18 Aug. '99
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Date
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