CATALYTICA ENERGY SYSTEMS INC
AMENDMENT NO. 1 TO COLLABORATIVE COMMERCIALIZATION AND LICENSE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>3
<FILENAME>dex1030.txt
<DESCRIPTION>AMENDMENT NO. 1 TO COLLABORATIVE COMMERCIALIZATION AND LICENSE AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.30

                        Confidential Treatment Requested

[*]  indicates deletion of confidential portions.


                                 AMENDMENT NO. 1

                                       To

              Collaborative Commercialization and License Agreement

                                     Between

                       Catalytica Combustion Systems, Inc.

                                       And

                          Genxon Power Systems, L.L.C.

                                       And

                            General Electric Company

--------------------------------------------------------------------------------

     This Amendment No. 1 is entered into as of this 3 day of January, 2002 by
and between General Electric Company, a corporation organized and existing under
the laws of New York, having offices at 1 River Road, Schenectady, New York
(hereinafter "GE"), and Catalytica Energy Systems, Inc., a corporation organized
and existing under the laws of Delaware, having offices at 430 Ferguson Drive,
Mountain View, California (hereinafter "CESI"), including its affiliate, Genxon
Power Systems L.L.C., a Delaware limited liability company, also with offices at
430 Ferguson Drive, Mountain View, California (hereinafter "GPS").

     This Amendment No. 1 includes the following Exhibits: Exhibit A - Program
Schedule and Milestones; and Exhibit D - Exceptions to the Exclusive Rights of
Section 6.2.1.

     WHEREAS, GE and GPS and Catalytica Combustion Systems, Inc., a corporation
organized and existing under the laws of Delaware, having offices at 430
Ferguson Drive, Mountain View, California (hereinafter "CCSI") entered into a
Collaborative Commercialization and License Agreement ("CCLA") dated November
19, 1998 under which they have cooperated in the area of catalytic combustion
systems for gas turbines; and

     WHEREAS, Catalytica Combustion Systems, Inc. (CCSI) was renamed Catalytica
Energy Systems, Inc. (CESI) in October, 2000; and

     WHEREAS, GPS, a joint venture between CESI and Woodward Governor Company
("Woodward"), will be dissolved pursuant to a "Genxon Membership Transfer and
Settlement Agreement," dated December 19, 2001 (hereinafter "Genxon Settlement
Agreement") wherein all GPS rights and properties are transferred to CESI; and

<PAGE>

     WHEREAS, GE, GPS and CESI desire to update certain terms of the CCLA to
reflect the parties' ongoing objectives with respect to developing and
commercializing catalytic combustion systems for gas turbines; and

     WHEREAS, GE, GPS and CESI each represents that it is fully authorized to
deal generally with and to make this Amendment respecting the subject matter
hereof.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree to amend the CCLA as follows:

Each occurrence of "Catalytica Combustion Systems, Inc." and "CCSI" is hereby
revised to read "Catalytica Energy Systems, Inc." and "CESI", respectively. Each
occurrence of "XONON" is hereby revised to read "Xonon".


                             Article 1 - Definitions

          Section 1.1 is hereby revised to read as follows:

1.1       "Additional Period" shall mean the time period commencing upon the
          -------------------
          date of expiration or earlier termination of the Incentive Term (as
          such Incentive Term may be modified pursuant to Sections 6.2.2, 7.3,
          or 7.5 below), and ending on the fifth (5th) anniversary of such
          expiration date.

          Section 1.9 is hereby revised to read as follows:

1.9       "Commercialization Plan" shall mean a plan for the Commercialization
          ------------------------
          of the Products in a particular Market Segment during the
          Commercialization Phase, including estimated funding amounts and dates
          for certain milestones, as such plan may be modified pursuant to the
          provisions of Section 5.1.3 below.

          Section 1.13 is hereby revised to read as follows:

1.13      "Development Funds" shall mean any amounts raised or expended by the
          -------------------
          parties under Article 4 below.

          Section 1.14 is hereby revised to read as follows:

1.14      "Development Workplan" shall mean the detailed work plan for the
          ----------------------
          technological development of the Products in a particular Market
          Segment during the Technology Development Phase, which shall (i) be
          based on the tollgate milestones identified in Exhibit A, (ii) include
          a tollgate milestone schedule to be agreed upon by the parties, and
          (iii) be modified or updated by the parties on at least an annual
          basis by mutual agreement.

          Section 1.17 is hereby revised to read as follows:

1.17      "Gas Turbine(s)" shall mean gas turbines rated at [*] for industrial
          ----------------
          and power generation applications.

                                      -2-

<PAGE>

          Section 1.20 is hereby revised to read as follows:

1.20      "Incentive Term" shall mean:
          ----------------

          (1)  with respect to the Small Gas Turbine Market Segment, the term
               beginning on the Effective Date (November 19, 1998) and ending on
               the earlier of (a) three (3) years after the date that the first
               Small Gas Turbine is shipped with a Xonon Combustion System, or
               (b) three years after the date that the first Small Gas Turbine
               is retrofit with a Xonon Combustion System;

          (2)  with respect to the Large Gas Turbine Market Segment, the term
               beginning on the Effective Date (November 19, 1998) and ending on
               December 31, 2003; or, if a Market Segment Agreement is mutually
               agreed upon, the term beginning on the Effective Date and ending
               on the earlier of (a) three (3) years after the date that the
               first Large Gas Turbine is shipped with a Xonon Combustion
               System, or (b) three years after the date that the first Large
               Gas Turbine is retrofit with a Xonon Combustion System;

          (3)  with respect to the Syntroleum Market Segment, the period
               commencing on the Effective Date (November 19, 1998) and ending
               December 31, 2001;

          (4)  with respect to all other Market Segments, the term beginning on
               the date of execution of a Market Segment Agreement and ending on
               the earlier of (a) three years after the date that the first Gas
               Turbine in that Market Segment is shipped with a Xonon Combustion
               System, or (b) three years after the date that the first Gas
               Turbine in that Market Segment is retrofit with a Xonon
               Combustion System.

          The Incentive Term for any Market Segment is subject to extension and
          reduction as provided in Sections 6.2.2, 7.3, and 7.5.

          Section 1.23 is hereby revised to read as follows:

1.23      "Market Segment" shall mean any one of the following: the Large Gas
          ----------------
          Turbine Market Segment, the Small Gas Turbine Market Segment, the
          Syntroleum Market Segment, and any other mutually agreed upon market
          segment as defined in a subsequent Market Segment Agreement.

          Section 1.29 is hereby revised to read as follows:

1.29      "Program Schedule and Milestones" shall mean a schedule for achieving
          ---------------------------------
          the development milestones ("GE Tollgates") identified in Exhibit A
          leading up to and including the first Gas Turbine firing date at a
          customer site for each Market Segment.

                                       -3-

<PAGE>

          The following Sections are hereby deleted:

          1.21 (Initial Term)
          1.24 (Maximum GE Required Expenditures)
          1.30 (7E Market Segment)
          1.31 (7F Market Segment)
          1.35 (Target Funding Amount)

          The following Sections are hereby added:

1.45      "Large Gas Turbine Market Segment" shall mean the worldwide market for
          ----------------------------------
          the Products for Gas Turbines having outputs at ISO conditions of [*],
          including without limitation the GE Frame 7E and 7F Gas Turbines.

1.46      "Small Gas Turbine Market Segment" shall mean the worldwide market for
          ----------------------------------
          the Products for Gas Turbines having outputs at ISO conditions of [*],
          excluding aeroderivative Gas Turbines.


                   Article 2 - Representations and Warranties

          The following Sections 2.2.12, 2.3, 2.4, and 2.5 are hereby added:

2.2.12    CESI has obtained, by assignment from Woodward, U.S. Patent No.
          6,095,793 to Greeb and all foreign counterparts thereof, including
          without limitation the worldwide right to grant licenses to make, use,
          sell, offer for sale, and import products and to practice methods
          covered by U.S. Patent No. 6,095,793 and foreign counterparts thereof.

2.3       CESI hereby represents and warrants that, pursuant to the Genxon
          Settlement Agreement, CESI has obtained sufficient rights to permit
          CESI to perform all of its obligations under this Agreement, including
          any and all licenses or grants of intellectual property rights to GE.

2.4       CESI hereby represents and warrants that CESI (as opposed to Woodward)
          has acquired all of the rights and obligations of GPS with respect to
          the CCLA as a result of the Genxon Settlement Agreement.

2.5       CESI hereby represents and warrants that CESI has the legal power to
          extend the rights granted to GE in Section 6.2.1 and that it has not
          made any commitments to others except as defined in Exhibit D,
          concerning catalytic combustion systems for gas turbines rated [*] in
          derogation of such rights.


                      Article 3 - Commercialization Program

          The following Section 3.0 is added to the beginning of Article 3,
          before Section 3.1:

3.0       The parties, by a written agreement ("Market Segment Agreement"), may
          enter into a Commercialization Program for a particular Market
          Segment. The Market Segment

                                      -4-

<PAGE>

          Agreement will include (a) with respect to the Technology Development
          Phase, a Program Schedule and Milestones, a development funding plan,
          a Development Workplan to be updated annually, and Yearly Development
          Budgets; (b) with respect to the Commercialization Phase, a
          Commercialization Plan; and (c) with respect to a Market Segment not
          defined in this Agreement, a definition of the Market Segment. The
          Market Segment Agreement will define the scope of any and all
          exceptions to the exclusive rights granted to GE in Section 6.2.1 for
          the relevant Market Segment, and any and all exceptions to GE's
          ability to purchase all of its requirements for catalytic combustion
          systems for Gas Turbines in the relevant Market Segment from CESI
          during the Incentive Term. If there are no such exceptions, GE and/or
          CESI, as the case may be, will represent and warrant the same in the
          Market Segment Agreement.

          Section 3.1 is hereby revised to read as follows (subsections 3.1.1
          through 3.1.5 remain unchanged):

3.1       "Technology Development Phase". The first phase of the
          ------------------------------
          Commercialization Program shall be the Technology Development Phase,
          during which GE and CESI will pursue the technological development of
          the Products so as to enable their Commercialization. GE and CESI will
          conduct their respective development efforts in accordance with the
          Program Schedule and Milestones, the Development Workplan, and the
          Yearly Development Budgets approved by the Management Committee, as
          such Development Workplan and Yearly Development Budgets may be
          modified by the Management Committee under Section 5.1.3 below.

          Section 3.2 is hereby revised to read as follows:

3.2       "Commercialization Phase". The second phase of the Commercialization
          -------------------------
          Program shall be the Commercialization Phase, during which GE and CESI
          will jointly pursue the Commercialization of the Products as developed
          during the Technology Development Phase. GE and CESI will conduct
          their respective efforts in accordance with the Commercialization
          Plan, as such Commercialization Plan may be modified by the Management
          Committee under Section 5.1.3 below, Article 7, and any other relevant
          terms of this Agreement.


             Article 4 - Funding of the Technology Development Phase

          Replace Section 4.1 with the following:

          Funding for the Technology Development Phase for a Market Segment
          defined subsequent to the execution of Amendment No. 1 to the CCLA
          shall be agreed upon by the parties pursuant to the relevant Market
          Segment Agreement during Tollgate 1 as depicted in Exhibit A. Funding
          sources may include customer funding, government funding, funding by
          GE and/or CESI, or a combination of the above.

                                      -5-

<PAGE>

          The following Sections are hereby deleted:

          4.2 (GE Required Expenditures)
          4.3 (Failure to Obtain Target Funding)
          4.4 (Funding Contributions by Customers of GE)


            Article 6 - Contribution of Technology and License Rights

          Section 6.1 is hereby revised to read as follows:

6.1       Technology Transfer. Promptly following the Effective Date and
          -------------------
          thereafter as such information becomes available, GE and CESI each
          shall disclose to the other party all Technical Information in its
          possession that is relevant to the Commercialization Program, to the
          extent deemed necessary by the disclosing party, in its reasonable
          discretion, to enable the other party to perform its obligations and
          to conduct its activities contemplated by this Agreement. GE shall not
          be obligated to disclose any information to CESI concerning, without
          limitation, the fuel/air mixer package or the preburner. CESI shall
          not be obligated to disclose any Technical Information to GE
          concerning the Xonon Module.

          Section 6.2.1 is hereby revised to read as follows:

6.2.1     License under CESI Technology. As partial consideration for GE's
          -----------------------------
          contribution to the Commercialization Program, CESI hereby grants to
          GE for the term of this Agreement a paid up, worldwide license under
          all CESI Technology:

          (a)  to purchase and import the Products from CESI for application to
               Gas Turbines and the Syntroleum Mod 2 Process, and

          (b)  to use, sell, offer to sell, and import the Products for Gas
               Turbines and the Syntroleum Mod 2 Process.

          The license granted in this Section 6.2.1 shall be exclusive with
          respect to a Market Segment during the Incentive Term of such Market
          Segment and subject to (i) CESI's reservation, during the Incentive
          Term, of the right and license under the CESI Technology only to
          conduct Pre-Commercial Activities with Third Parties relating to
          catalytic combustion equipment for Third Party Gas Turbines, (ii) with
          respect to exclusivity, GE purchasing all of its requirements for
          catalytic combustion systems for Gas Turbines in a particular Market
          Segment from CESI during the Incentive Term of any license rights
          granted under this Section 6.2.1, and (iii) with respect to
          exclusivity, those exceptions to the exclusive rights granted to GE in
          this Section 6.2.1 which are defined in a Market Segment Agreement or
          in Exhibit D to this Agreement (for the Small Gas Turbine, Large Gas
          Turbine, and Syntroleum Market Segments). As used in this Agreement,
          the term "catalytic combustion system" means a gas turbine combustion
          system that employs a catalyst upstream of the turbine inlet and
          integrated with the combustion process and shall not include SCR,
          SNCR, SCONOx or other catalytic devices employed in pollution
          clean-up.

                                      -6-

<PAGE>

          Section 6.2.2 is hereby revised to read as follows:

6.2.2     For all periods other than the Incentive Term, the license granted in
          section 6.2.1 shall be exclusive only with respect to GE-designed Gas
          Turbines so that CESI can, itself or through its licensees, sell and
          offer to sell the Products to Third Parties for non GE-designed Gas
          Turbine applications under the CESI Technology.

          GE may, in its sole discretion (after giving due regard to CESI's
          concerns), elect to terminate the Incentive Term for a particular
          Market Segment prior to its expiration date by written notice to CESI
          setting forth such expiration date, and in such event, the length of
          the Additional Period shall be increased on an equivalent basis to
          compensate GE for any such reduction in the Incentive Term (such that
          the Additional Period shall commence on the date of termination of the
          Incentive Term and expire on the same date it would have expired if
          the Incentive Term (including any modifications pursuant to Sections
          7.3 and 7.5) had not been terminated early). In addition, in a timely
          fashion after the Effective Date, or from time to time thereafter as
          appropriate, CESI and GE shall consider in good faith other
          modifications of the Incentive Term, including elimination of all or
          any part of the Incentive Term in exchange for appropriate
          compensating expansions of the Additional Period and a reconsideration
          of the continuing existence or structure of Section 8.1 hereof.

          As partial consideration for the rights being granted back to CESI
          under this Section 6.2.2., GE shall receive either (a) a fixed payment
          in an amount to be mutually agreed upon by CESI and GE or (b) the
          right during the Additional Period to purchase the Products from CESI
          or its licensees [*]. CESI shall, at its sole option, elect which
          consideration GE shall receive, either (a) or (b) specified above, at
          least 60 days prior to the end of the Incentive Term for a particular
          Market Segment and, if CESI elects option (a) and the parties agree on
          the amount of the payment, shall pay GE the mutually agreed upon
          amount in full by wire transfer upon the expiration of the Incentive
          Term; otherwise, CESI shall elect option (b). The grant back of rights
          to CESI shall not be effective until payment under option (a) is
          received by GE or until CESI notifies GE in writing that it elects to
          compensate GE under option (b) set forth in this Section 6.2.2.

          If there is no [*] at any time after the Incentive Term has terminated
          (due to the lack of any sales by CESI or a CESI licensee to a Third
          Party), [*], as defined in Section 7.2.1, shall apply.

          The following Section 6.2.6 is hereby added:

6.2.6     CESI hereby grants to GE a nonexclusive, worldwide, royalty-free
          license to make, use, sell, offer for sale, and import products and to
          practice methods covered by CESI's U.S. Patent 6,095,793 and foreign
          counterparts thereof in connection with Gas Turbines rated at [*] MW
          at ISO conditions and Gas Turbines rated at [*] at ISO conditions
          including without limitation the GE 10 Gas Turbine. CESI agrees to
          grant GE a royalty free license under the aforementioned U.S. Patent
          6,095,793 and foreign counterparts thereof for any Market Segment
          which is the subject of a Commercialization Program between GE and
          CESI.

                                      -7-

<PAGE>

                         Article 7 - Commercialization

          The first sentence in Article 7 is hereby revised to read as follows:

          The Commercialization of the Products for a particular Market Segment
          shall be subject to the Commercialization Plan for that Market Segment
          and the provisions of this Article 7.

          Section 7.1 is hereby revised to read as follows:

7.1       Supply Agreement. For a particular Market Segment, during the
          ----------------
          Incentive Term, CESI shall supply all of GE's requirements for the
          Products for incorporation into Gas Turbines, provided that CESI can
          meet GE's quality, quantity and schedule requirements, pursuant to the
          Purchase Terms and Conditions set forth in Exhibit C. During this
          period, GE reserves the right to engage in activities with Third
          Parties regarding catalytic combustion systems for use on any GE gas
          turbine, provided CESI shall have the right to treat any sale, field
          test, or accepted written offer to sell by GE of Third Party catalytic
          combustion systems for Gas Turbines during the Incentive Term as a
          material breach of this Agreement with respect to the relevant Market
          Segment, triggering CESI's rights under Sections 8.1, 13.1.3, and 13.3
          hereof. The purchase or otherwise obtaining of catalyst modules by GE
          from Third Parties for the purpose of evaluation and testing (other
          than field testing) shall not be a breach of this Agreement. The sale
          by GE of a Third Party catalytic combustion system in a particular
          Market Segment outside of the Incentive Term or for a gas turbine not
          included in a Market Segment shall not be a breach of this Agreement.

          Section 7.2.2 is hereby revised to read as follows:

7.2.2     In any event and as further consideration for GE's contribution to the
          Commercialization Program, to the extent GE procures all of its
          requirements for Gas Turbine catalytic combustion systems in a
          particular Market Segment from CESI, GE may purchase the Products at
          [*], with the exception of GE procurement during the Additional Period
          during which period Article 6 shall control pricing.

          Section 7.3 is hereby revised to read as follows:

7.3       Extension of the Incentive Term. In the event that the Target
          -------------------------------
          Percentage (defined below) or more of the Gas Turbines shipped or in
          production by GE in the last year of the Incentive Term in a
          particular Market Segment include a Xonon Module, or have associated
          therewith an order for a Xonon Module, or result in an order for a
          Xonon Module, then the Incentive Term shall be extended by one (1)
          year. The Target Percentage shall be [*] for the first extension, [*]
          for the second extension, [*] for the third extension, [*] for the
          fourth extension, [*] for the fifth extension, and [*] for the sixth
          and all subsequent extensions. In calculating such percentages, the
          total number of Gas Turbines shipped or in production during such time
          period (i.e., the last year of the Incentive Term) shall not include
          Gas Turbines for which the customer does not require a NOx reduction
          system, such as a Selective Catalyst Reduction Unit (SCR) or a Xonon
          Combustion System or an equivalent NOx reduction system. For the
          purpose of this Section 7.3 only, a Gas Turbine

                                      -8-

<PAGE>

          shall be considered "shipped" when it leaves the factory and "in
          production" from the date of the order definition meeting (in which
          the scope of supply is defined with the customer) until the date of
          shipment. For the purpose of this Section 7.3 only, an "order" for a
          Xonon Module means a commitment in writing to purchase a Xonon Module.

          With respect to each Market Segment in the Incentive Term, GE shall
          use its best efforts to keep books and records accurately showing all
          shipment and production by GE of Gas Turbines which include a Xonon
          module, or have associated therewith a Xonon module, or result in an
          order for a Xonon module in such manner as to enable GE to determine
          whether GE is entitled to an extension of the Incentive Term as set
          forth in this Section 7.3. Such books and records shall be subject to
          inspection by an independent auditor acceptable to GE at reasonable
          times, but not more frequently than once every twelve months, for the
          purpose of verifying GE's entitlement to an extension of the Incentive
          Term. The fees and expenses of the auditor performing such an
          examination shall be borne by CESI. GE shall notify CESI in writing of
          GE's entitlement to an extension of the Incentive Term at least 14
          days prior to the beginning of such extension.

          Section 7.4 is hereby deleted.

          Section 7.5 is hereby revised to read as follows:

7.5       Reduction of the Incentive Term.
          -------------------------------

7.5.1     If GE fails, through no fault of CESI, to meet the target date for
          first shipment or retrofit of a Gas Turbine in a particular Market
          Segment as set forth in Sections 7.5.2 or 7.5.3 of this Agreement or
          in a Market Segment Agreement, then the Incentive Term for that Market
          Segment shall be reduced as follows:
<TABLE>
<CAPTION>

               Delay in Meeting
                 Target Date              Reduction in Incentive Term
          ----------------------------    ---------------------------
          <S>                             <C>
          1 - 182 Days                    One day reduction for each day that GE is late
                                          in meeting the target date.

          183 - 365 Days                  1 year reduction plus one day reduction for each
                                          day that GE is late in meeting target date + 182
                                          Days.

          Over 365 Days                   2 year reduction plus one day reduction for each
                                          day that GE is late in meeting the target date +
                                          365 Days.
</TABLE>

7.5.2     The target date for first shipment or retrofit for the Small Gas
          Turbine Market Segment is [*], which date can be modified only by
          mutual agreement of the parties.

                                      -9-

<PAGE>

7.5.3     The target date for first shipment or retrofit for the Large Gas
          Turbine Market Segment is [*], which date can be modified only by
          mutual agreement of the parties.

          Example: GE's first shipment of a Small Gas Turbine occurs June 30,
          2003, [*] days after the target date of [*]. The Incentive Term is
          defined in Section 1.20(1) to end June 30, 2006, three years after
          actual shipment. The Incentive Term is reduced by 1 year plus 1 day
          for each day after May 31, 2003 (target date + 182 Days), i.e., a
          reduction of 1 year + 30 days. The reduced Incentive Term therefore
          ends May 31, 2005.

          If the target dates for first shipment or retrofit are not met because
          of CESI's fault, or if CESI is unable to commit to the deliveries
          contemplated by Section 7.3 in quantities that would extend the
          Incentive Term due to Xonon Module technical, quality or delivery
          reasons, then GE and CESI will consider in good faith a revised
          schedule for extension of the Incentive Term that would provide GE
          with the benefits contemplated in Section 7.3.

          Section 7.6 is hereby deleted.

          The following Section 7.8 is hereby added:

7.8       CESI guarantees that all Xonon Modules sold to GE will perform
          satisfactorily in accordance with the Xonon Module product
          specifications for at least 8000 operating hours. Xonon Modules which
          fail to operate satisfactorily for at least 8000 operating hours will
          be replaced by CESI on a pro-rata basis, including freight.


                              Article 8 - Royalties

          Section 8.1 is hereby revised to read as follows:

8.1       Royalties Upon Certain Terminations. In the event of a termination of
          -----------------------------------
          this Agreement by CESI under Section 13.1 or 13.2, including, in each
          case, any termination by individual Market Segment under Section 13.6,
          and subject to any surviving terms of this Agreement, if GE elects
          thereafter to continue to sell and offer to sell Products to
          customers, with respect to any such Market Segment, then CESI shall
          grant to GE a non-exclusive, royalty-bearing, irrevocable, worldwide
          license under CESI's Commercialization Program Technology, CESI's
          Background Technology, the Xonon Control Algorithms, and CESI's U.S.
          Patent 6,095,793 and foreign counterparts thereof to sell and offer to
          sell Products and to sublicense Xonon Control Algorithms, and GE shall
          pay to CESI fees and royalties with respect to such Market Segment,
          payable in the form of (a) a one-time fee in the amount set forth
          below or set forth in a subsequent Market Segment Agreement, payable
          upon the first sale of a gas turbine incorporating such Product in
          such Market Segment; and (b) a royalty in the amount set forth below
          or set forth in a subsequent Market Segment Agreement for each
          subsequent sale of a gas turbine incorporating such Product until the
          Royalty Cap is achieved, at which time GE's License shall be fully
          paid up, irrevocable, perpetual and worldwide. The royalties set forth
          in Sections 6.2.4 and 6.2.5 are payable only for sales of

                                      -10-

<PAGE>

          Gas Turbines made during the life of this Agreement and, after
          termination, are not payable in addition to the royalties set forth in
          this Section 8.1.
<TABLE>
<CAPTION>
<S>                                <C>                    <C>                      <C>
          ------------------------ ---------------------- ------------------------ ----------------------
          Market Segment           Royalty Cap            One-Time Fee             Royalty Per Sale
          ------------------------ ---------------------- ------------------------ ----------------------
          Large Gas Turbine        [*]                    [*]                      [*]
          ------------------------ ---------------------- ------------------------ ----------------------
          Syntroleum               [*]                    [*]                      [*]
          ------------------------ ---------------------- ------------------------ ----------------------
          Small Gas Turbine        [*]                    [*]                      [*]
          ------------------------ ---------------------- ------------------------ ----------------------
</TABLE>


                                    Article 10 - Confidentiality

          The following Section 10.4 is hereby added:

10.4      CESI shall not disassemble, measure, analyze, or otherwise reverse
          engineer any fuel/air mixer package or preburner which is designed,
          modified, or manufactured in whole or in part by or on behalf of GE
          for GE designed gas turbines. CESI shall not modify its fuel/air mixer
          package or preburner design based on the design of a fuel/air mixer
          package or preburner which is designed, modified, or manufactured in
          whole or in part by or on behalf of GE for GE designed gas turbines.
          CESI retains the right to independently develop, modify, or improve
          the fuel/air mixer package or pre-burner provided that such
          developments, modifications, and improvements are based on CESI
          Technology.


                    Article 12 - Technology and Patent Rights

          Section 12.3.1 is hereby revised to read as follows:

12.3.1    GE License. In the event GE exchanges Technical Information comprising
          ----------
          improvements and/or modifications to the Xonon Module during the
          period of ten (10) years following the Effective Date of this
          Agreement and/or if GE conceives, by means of GE employees who had
          access to CESI Technology, any invention comprising an improvement or
          modification to the Xonon Module, then GE shall grant to CESI a
          non-exclusive royalty-free, perpetual, world-wide, irrevocable license
          (with unrestricted rights to sublicense) to make, have made, use,
          sell, lease, and/or export Products under both the aforesaid Technical
          Information and any Patents which result from the aforesaid
          inventions; said non-exclusive license being restricted in
          field-of-use to Products for gas turbines employing catalytic
          combustion, other than aircraft gas turbines. GE is not obligated to
          grant any license to CESI under any GE Patents or Technical
          Information relating to the fuel/air mixer package, the preburner, or
          any combustor hardware components (other than the Xonon Module as set
          forth in this Section 12.3.1).


                            Article 13 - Termination

          Section 13.2 is hereby revised to read as follows:

13.2      Termination Without Cause. Either party shall have the unilateral
          -------------------------
          right to terminate this Agreement by giving written notice to the
          other party, upon the terminating party's written

                                      -11-

<PAGE>

          notice to the other party of significant technical issues which
          indicate that the technical objectives of the Commercialization
          Program are not achievable or cannot be achieved within the timetable
          established in the Development Workplan or any extension thereof
          agreed to by the parties; with GE having the right to terminate only
          if the technical issues relate to the Xonon Module or Xonon
          Components, and CESI having the right to terminate only if the
          technical issues relate to the GE Components.

          Section 13.3 is hereby revised to read as follows:

13.3      Consequences of Termination -- CESI Not in Default. In the event this
          --------------------------------------------------
          Agreement is terminated by GE under section 13.2, or by CESI under
          Section 13.1: (a) CESI shall have no obligation to make improvements
          to the Xonon Combustion System available to GE beyond those developed
          in the Commercialization Program prior to such termination; (b) GE's
          exclusive licenses under CESI Technology pursuant to Section 6.2.1
          shall be limited to GE-designed Gas Turbines, (c) GE's right to [*]
          under Article 6 shall be extinguished, (d) GE's rights to [*], rights
          to purchase and sole distribution rights under Article 7 shall all
          terminate, and (e) if GE elects to pursue its options under Section
          8.1, GE shall pay CESI the predetermined royalty or fee as provided
          therein.

          Sub-Section (a) of Section 13.4 is hereby revised to read as follows:

          (a) GE's licenses pursuant to Article 6 shall continue in effect and
          CESI shall promptly arrange with GE for a Third Party source of supply
          (as a vendor to CESI) of the Xonon Combustion System using the
          procedure set forth in Section 7.7 above which assures GE of a
          continuing and uninterrupted source of supply for the Xonon Modules
          and/or Xonon Components, and

          Section 13.5 is hereby revised to read as follows:

13.5      Effect of Termination. Termination of this Agreement shall not relieve
          ---------------------
          the parties of any obligation accruing prior to such termination. The
          provisions of Sections 6.2.6, 7.8, 9.1, 9.2 and this 13.5, and
          Articles 10 [Confidentiality], 11 [Publication], 12 [Technology and
          Patent Rights] and 14 [Indemnity], in addition to those rights and
          obligations specifically noted in Section 13.3 or 13.4, to the extent
          applicable, shall survive the termination of this Agreement. Each
          party shall bear its own termination costs. There will be no
          liquidated damages.

Except as provided above, all other provisions of the CCLA remain unchanged and
said CCLA as amended by this Amendment No. 1 constitutes the entire
understanding between GE, CESI, and GPS with respect to the subject matter
thereof and supersedes all previous negotiations, commitments and writings with
respect thereto.

                                      -12-

<PAGE>

IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to be
executed in three (3) original copies by its duly authorized officers or
representatives and to become effective upon the last date of signature below.


General Electric Company                Catalytica Energy Systems, Inc.
GE Power Systems

By                                      By
        -----------------------------           --------------------------------


Title                                   Title
        -----------------------------           --------------------------------


Witness                                 Witness
        -----------------------------           --------------------------------


Date                                    Date
        -----------------------------           --------------------------------



                                        Genxon Power Systems LLC


                                        By
                                                --------------------------------


                                        Title
                                                --------------------------------


                                        Witness
                                                --------------------------------


                                        Date
                                                --------------------------------

                                      -13-

<PAGE>

                     EXHIBIT A [replaces Exhibit A in CCLA]
                         Program Schedule and Milestones

                  NPI Tollgate Completion Status and NPI Risk
<TABLE>
<CAPTION>

       Tollgate 1                      Tollgate 2                         Tollgate 3                        Tollgate 4
    PRODUCT OPTIONS                 REQUIREMENT &                         CONCEPTUAL
     IDENTIFICATION                    RESOURCES                            DESIGN                      PRELIMINARY DESIGN
<S>                             <C>                               <C>                               <C>
-------------------------       ---------------------------       ---------------------------       ----------------------------
  Define Market Driver          Factor SI Feedback In Plan             Launch Program                   Expand POS to Feature
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       000                     *       200                       *       300                       *       400
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
  Define Program Team            Define Funct/Tech Req'ts          Initiate Eng/Prod Process          Perform Program Reviews
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       100                     *       210a                      *       310                       *       405
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
Define Cust. Expectations         Define Services Req'ts             Perform DFSS Studies             Define/Record Interfaces
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       120                     *       210b                      *       320                       *       410
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
Establish Business Goals          Generate Prel. Approach         Establish Detailed Schedule           Perform Risk Reviews
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       130                     *       220                       *       330                       *       415
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
Develop Product Concepts          Conduct Patent Search            Hold Concept Risk Review           Define Block Introduction
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       131                     *       225                       *       340                       *       420
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
   Assess Technology              Perform Product Assess.          Conduct Interface Reviews          DFSS Projects Identified
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       132                     *       230                       *       350                       *       430
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
Evaluate Business Impact          Revalidate Customer QPD           Perform Legal Reviews             Create Test Plan Req'ts
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       140                     *       240                       *       360                       *       440
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
  Perform Risk Review              Finalize Best Option              Prepare Design Review             Perform Concept Demo's
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       145                     *       245                       *       370                       *       445
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
  Scope Project Req'ts           Establish Resource Req'ts            Hold Design Review              Develop Schedule & Budget
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       150                     *       250                       *       380                       *       450
-------------------------       ---------------------------       ---------------------------       ----------------------------


-------------------------       ---------------------------       ---------------------------       ----------------------------
   Hold Pre-SI Review              Set Subsystem CTQ's            Define Prod. Quoting Limits            Hold Design Review
-------------------------       ---------------------------       ---------------------------       ----------------------------
  *       199                     *       260                       *       385                       *       460
-------------------------       ---------------------------       ---------------------------       ----------------------------


                                ---------------------------       ---------------------------       ----------------------------
                                   Finalize Product Spec             Finalize Cycle Deck              Hold Product Spec Review
                                ---------------------------       ---------------------------       ----------------------------
                                  *       265                       *       387                       *       470
                                ---------------------------       ---------------------------       ----------------------------


                                ---------------------------       ---------------------------       ----------------------------
                                   Hold Pre-SII Review               Hold Tollgate Review             Develop Introduction Plan
                                ---------------------------       ---------------------------       ----------------------------
                                  *       270                       *       390                       *       480
                                ---------------------------       ---------------------------       ----------------------------


                                ---------------------------       ---------------------------       ----------------------------
                                   Finalize Program Plans         Decision to Develop Product       Hold Prelim. Tollgate Review
                                ---------------------------       ---------------------------       ----------------------------



<CAPTION>



        Tollgate 5                       Tollgate 6                          Tollgate 7
                                        PRODUCTION &
      DETAILED DESIGN                DESIGN VALIDATION                     POST SHIPMENT
<C>                               <C>                                <C>
---------------------------       ----------------------------       ----------------------------
   Update Program Plan               Refine Teams, Schedules             Update Program Status
---------------------------       ----------------------------       ----------------------------
  *       500                       *       600                        *       700
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
  Complete Component Test           Procure/Manufact H'dware                Ship Units(s)
---------------------------       ----------------------------       ----------------------------
  *       510                       *       610a                       *       705
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
Complete Design Activities          Build/Validate Subassy            Perform Pre-Install Review
---------------------------       ----------------------------       ----------------------------
  *       520                       *       510b                       *       710
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
  Complete Documentation          Build, Test & Validate Unit        Perform Post-Install Review
---------------------------       ----------------------------       ----------------------------
  *       530                       *       620                        *       720
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
 Develop System Test Plan         Complete Product Validation          Document Lessons Learned
---------------------------       ----------------------------       ----------------------------
  *       540                       *       630a                       *       730
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
 Complete Production Plan           Conduct Problem Reviews              Conduct Product Test
---------------------------       ----------------------------       ----------------------------
  *       550                       *       630b                       *       740
---------------------------       ----------------------------       ----------------------------


---------------------------       ----------------------------       ----------------------------
 Hold Final Design Review         Verify Status for Field Ship       Complete Product Validation
---------------------------       ----------------------------       ----------------------------
  *       560                       *       640                       *       750
---------------------------       ----------------------------      ----------------------------


---------------------------       ----------------------------      ----------------------------
 Conduct Final Patent Revw         Prepare for Customer Test          Conduct Problem Reviews
---------------------------       ----------------------------      ----------------------------
  *       570                       *       650                       *       760
---------------------------       ----------------------------      ----------------------------


---------------------------       ----------------------------      ----------------------------
 Predict Design Performance          Hold Tollgate 6 Review            Update Business Plans
---------------------------       ----------------------------      ----------------------------
  *       580                       *       699                       *       770
---------------------------       ----------------------------      ----------------------------


---------------------------                                         ----------------------------
   Update Risk Review                                               Conduct Post-Install Review
---------------------------       ----------------------------      ----------------------------
  *       590                       Completion Status Key             *       780
---------------------------       ----------------------------      ----------------------------
                                  /   Done

---------------------------       +   Partially Complete            ----------------------------
 Update Introduction Plan                                            Integrate Lessons Learned
---------------------------       *   No Progress                   ----------------------------
  *       585                     ----------------------------        *       790
---------------------------                                         ----------------------------
                                  X   Change Since Last Review

---------------------------       ----------------------------      ----------------------------
  Hold Tollgate 5 Review                NPI Risk Key                   Hold Tollgate 7 Review
---------------------------                                         ----------------------------
  *       599                                                         *       799
---------------------------                                         ----------------------------

</TABLE>

                                      -14-

<PAGE>

                                    Exhibit B
                             Commercialization Plan

Exhibit B is hereby deleted.

                                      -15-

<PAGE>

                                    Exhibit D
                 Exceptions to Exclusive Rights of Section 6.2.1

[*]

                                      -16-

</TEXT>
</DOCUMENT>
