**Exhibit14.1**

 

**CATALYTICAENERGY SYSTEMS, INC.**

and wholly-owned subsidiaries (the“Company”)

 

**CODE OFCONDUCT AND ETHICS**

 

**Introduction**

 

This Code of Conduct and Ethics (this “Code”)covers a wide range of business practices and procedures.  It does not cover every issue that may arise,but it sets out basic principles to guide the directors, officers and employeesof the Company, including our wholly-owned subsidiaries.  The Code incorporates and builds upon anumber of current practices of the Company. However, the Code is intended to supplement, not replace, the Company’semployee handbook and other policies and procedures, and you should continue tobe familiar with these policies.  All ofthe directors, officers and employees of the Company should conduct themselvesaccordingly and seek to avoid even the appearance of improper behavior in anyway relating to the Company. In appropriate circumstances, this Code shouldalso be provided to and followed by the Company’s agents and representatives,including consultants.

 

Senior executive officers and seniorfinancial officers, including the Chief Financial Officer, should be especiallycognizant of the requirements for corporate disclosures set forth herein.  All directors, officers and employees shouldbe particularly aware of the Company’s disclosure obligations with theSecurities and Exchange Commission (the “SEC”) and should assist the seniorexecutive officers with utmost diligence in this regard.

 

Any director or officer who has any questionsabout this Code should consult with the Chief Executive Officer or legalcounsel as appropriate in the circumstances. If an employee has any questions about this Code, the employee should seekguidance from his or her supervisor.

 

**1.****                                      Scopeof Code**

 

This Code is intended to deter wrongdoing andto promote the following:

 

(1)          honest and ethicalconduct, including the ethical handling of actual or apparent conflicts ofinterest between personal and professional relationships;

 

(2)          full, fair, accurate,timely and understandable disclosure in reports and documents the Company fileswith, or submits to, the SEC and in other public communications made by theCompany;

 

(3)          compliance withapplicable governmental laws, rules and regulations;

 

(4)          the prompt internalreporting of violations of this Code to the appropriate person or personsidentified in this Code;

 

(5)          accountability foradherence to this Code; and

 

(6)          adherence to a highstandard of business conduct and ethics.

 

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**2.****                                      Compliancewith Laws, Rules and Regulations**

 

Obeying the law, both in letter and in spirit,is the foundation on which the Company’s ethical standards are built.  All directors, officers and employees shouldrespect and obey all laws, rules and regulations applicable to the business andoperations of the Company.  Althoughdirectors, officers and employees are not expected to know all of the detailsof these laws, rules and regulations, it is important to know enough todetermine when to seek advice from supervisors, managers, officers or other appropriateCompany personnel, including legal counsel.

 

**3.****                                      Conflictsof Interest**

 

A “conflict of interest” exists when anindividual’s private interest interferes in any way – or even appears toconflict – with the interests of the Company. A conflict of interest situation can arise when a director, officer oremployee takes actions or has an interest that may make it difficult to performhis or her work on behalf of the Company in an objective and effectivemanner.  Conflicts of interest may alsoarise when a director, officer or employee, or a member of his or her family,receives improper personal benefits as a result of his or her position with theCompany.  Loans to, or guarantees ofobligations of, employees and their family members may create conflicts ofinterest.

 

Service to the Company should never besubordinated to personal gain or advantage. Conflicts of interest, whenever possible, should be avoided.  In particular, clear conflict of interestsituations involving directors, officers and employees who occupy supervisorypositions or who have discretionary authority in dealing with any third partymay include the following:

 

(1)                                  anysignificant ownership interest in any customer, supplier or competitor;

 

(2)                                  aconsulting or employment relationship with any customer, supplier orcompetitor;

 

(3)                                  anyoutside business activity that detracts from an individual’s ability to devoteappropriate time and attention to his or her responsibilities to the Company;

 

(4)                                  thereceipt of excessive gifts or entertainment from any organization with whichthe Company has current or prospective business dealings; and

 

(5)                                  beingin the position of supervising, reviewing or having any influence on the jobevaluation, pay or benefit of any family member.

 

It is almost always a conflict of interestfor a Company officer or employee to work simultaneously for a competitor,customer or supplier.  No officer oremployee may work for a competitor as a consultant or board member.  The best policy is to avoid any direct orindirect business connection with the Company’s customers, suppliers, andcompetitors, except on the Company’s behalf.

 

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Officers or employees serving on the board ofdirectors or a similar body for an outside company or government agency afterthe effective date of this Code requires the advance approval of the ChiefExecutive Officer or the Chief Financial Officer.

 

No employee of the Company may make anypolitical contribution for the Company or use the Company’s name, funds,property, equipment or services for the support of political parties,initiatives, committees or candidates.** **Additionally, lobbying activitiesor government contacts on behalf of the Company, other than sales activities,should be coordinated with legal counsel.

 

Directors, officers and employees areprohibited from taking for themselves personally, or directing to a third party,any opportunity that is discovered through the use of corporate property,information or the individual’s position, without the consent of the Board ofDirectors.  No director, officer oremployee may use corporate property, information or position for improperpersonal gain, and no director, officer or employee may compete with theCompany directly, or indirectly. Directors, officers and employees owe a duty to the Company to advanceits legitimate interest when the opportunity to do so arises.

 

Conflicts of interest are prohibited as amatter of Company policy, except under guidelines approved by the Board of Directors.  Conflicts of interest may not always beclear-cut and further review and discussions may be appropriate.  Any director or officer who becomes aware ofa conflict or potential conflict should bring it to the attention of the ChiefExecutive Officer, the Chief Financial Officer or legal counsel as appropriatein the circumstances.  Any employee whobecomes aware of a conflict or potential conflict should bring it to theattention of a supervisor, manager or other appropriate personnel.

 

**4.****                                      Loansby the Company**

 

Loans from the Company to directors andexecutive officers are prohibited.  Loansfrom the Company to other employees must be approved in advance by the Board ofDirectors.

 

**5.****                                      InsiderTrading**

 

Directors, officers and employees who haveaccess to confidential information relating to the Company or any otherpublicly traded company are not permitted to use or share that information forstock trading purposes or for any other purpose except the conduct of theCompany’s business.  All non-public informationabout the Company or any other company should be considered confidentialinformation.   To use non-publicinformation for personal financial benefit or to “tip” others who might make aninvestment decision on the basis of this information is not only unethical andagainst Company policy but is also illegal. Directors, officers and employees also should comply with insidertrading standards and procedures adopted by the Company.  If a question arises, the director, officeror employee should consult with the Company’s Chief Financial Officer or legalcounsel.

 

**6.****                                      Competitionand Fair Dealing**

 

The Company seeks to compete in a fair andhonest manner.  The Company seekscompetitive advantages through superior performance rather than through unethicalor illegal business practices.  Stealingproprietary information, possessing trade secret information that 

 

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was obtained without the owner’s consent or inducing such disclosuresby past or present employees of other companies is prohibited.  Each director, officer and employee shouldendeavor to respect the rights of and deal fairly with the Company’s customers,suppliers, service providers, competitors and employees.  No director, officer or employee should takeunfair advantage of anyone relating to the Company’s business or operationsthrough manipulation, concealment, or abuse or privileged information,misrepresentation of material facts or any unfair dealing practice.

 

To maintain the Company’s valuablereputation, compliance with the Company’s quality processes and safetyrequirements is essential.  Allinspection and testing documents must be handled in accordance with allapplicable regulations and safety procedures established by the Company.

 

The purpose of business entertainment andgifts in a commercial setting is to create good will and sound workingrelationships, not to gain unfair advantage with customers.  No gift or entertainment should ever be offered,given, provided or accepted by a director, officer or employee, family memberof a director, officer or employee, or any agent relating to the individual’sposition with the Company unless it is (1) not a cash gift, (2) consistent withcustomary business practices, (3) not excessive in value, (4) cannot beconstrued as a bribe or payoff, and (5) does not violate any laws, rules orregulations.  Further, a gift should notbe exchanged if a reasonable person would conclude that public disclosure ofsuch gift would likely embarrass either the Company, employee, director orofficer.  A director or officer shoulddiscuss with the Chief Executive Officer or Chief Financial Officer, and aemployee should discuss with his or her supervisor, any gifts or proposed giftsthat the individual is not certain are appropriate.

 

**7.****                                      Discriminationand Harassment**

 

The Company is firmly committed to providingequal opportunity in all aspects of employment and will not tolerate anyillegal discrimination or harassment of any kind.

 

Employment decisions including hiring andpromotions are made based upon an individual’s qualifications without regard torace, religion, color, sex, sexual orientation, marital status, genderidentity, national origin, age, disability or veteran status.

 

Abusive, harassing or offensive conduct isunacceptable, whether verbal, physical or visual, and will not be tolerated.****Examples include derogatory comments based on racial orethnic characteristics, unwelcome sexual advances or intimidating personalbehaviors.

 

**8.****                                      Health,Safety and the Environment**

 

The Company strives to provide each employeewith a safe and healthful work environment. Each officer and employee has responsibility for maintaining a safe andhealthy workplace for all employees by following safety and health rules and practicesand reporting accidents, injuries, and unsafe equipment, practices orconditions.

 

Violence and threatening behavior are notpermitted.  Officers and employees shouldreport to work in a condition to perform their duties, free from the influenceof illegal drugs or alcohol.  The use ofillegal drugs in the workplace will not be tolerated.

 

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**9.****                                      Compliancewith Rules, Controls and Procedures**

 

It isimportant that all transactions are properly recorded, classified andsummarized in our financial statements, books and records in accordance withour policies, controls and procedures, as well as all generally acceptedaccounting principles, standards, laws, rules and regulations for accountingand financial reporting.  If you haveresponsibility for or any involvement in financial reporting or accounting, youshould have an appropriate understanding of, and you should seek in good faithto adhere to, relevant accounting and financial reporting principles, standards,laws, rules and regulations and the Company’s financial and accountingpolicies, controls and procedures.  Ifyou are a senior officer, you should seek to ensure that the internal controlsand procedures in your business area are in place, understood and followed.

 

**10.****                               Accuracyof Records and Reports**

 

It isimportant that those who rely on records and reports—managers and otherdecision makers, creditors, customers and auditors—have complete, accurate andtimely information.  False, misleading orincomplete information undermines the Company’s ability to make good decisionsabout resources, employees and programs and may, in some cases, result inviolations of law.  Anyone involved inpreparing financial or accounting records or reports, including financialstatements and schedules, must be diligent in assuring that those records andreports are complete, accurate and timely.  Anyone representing or certifying as to theaccuracy of such records and reports should make an inquiry or review adequateto establish a good faith belief in their accuracy.

 

Even if youare not directly involved in financial reporting or accounting, you are likelyinvolved with financial records or reports of some kind—a voucher, time sheet,invoice or expense report.  In addition,most employees have involvement with product, marketing or administrativeactivities, or performance evaluations, which can affect our reported financialcondition or results.  Therefore, the Companyexpects you, regardless of whether you are otherwise required to be familiarwith finance or accounting matters, to use all reasonable efforts to ensurethat every business record or report with which you deal is accurate, completeand reliable.

 

**11.****                               Record-Keeping**

 

The Company requires honest and accuraterecording and reporting of information in order to make responsible businessdecisions.

 

All of the Company’s books, records, accountsand financial statements must be maintained in reasonable detail, mustappropriately reflect the Company’s transactions, and must conform both toapplicable legal requirements and to the Company’s system of internalcontrols.  Unrecorded or “off the books”funds or assets should not be maintained.

 

Business records and communications oftenbecome public, and the Company and its officers and employees in their capacitywith the Company should avoid exaggeration, derogatory remarks, guesswork orinappropriate characterizations of people and companies that 

 

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could be misunderstood. This applies equally to e-mail, internal memosand formal reports.    In accordance withthose policies, in the event of litigation or governmental investigation,directors, officers and employees should consult with the Company’s ChiefFinancial Officer or legal counsel before taking any action because it iscritical that any impropriety or possible appearance of impropriety be avoided.

 

Many officers and employees regularly usebusiness expense accounts, which must be documented and recorded accurately.  If an officer or employee is not sure whethera certain expense is appropriate, the employee should ask his or her supervisoror the Chief Financial Officer.  Rulesand guidelines are available from the Finance Department.

 

You should immediately consult with the legalcounsel regarding the retention of records in the case of actual or threatenedlitigation or government investigation.

 

**12.****                               IntentionalMisconduct**

 

You may not intentionally misrepresent the Company’sfinancial performance or otherwise intentionally compromise the integrity ofthe Company’s reports, records, policies and procedures.  For example, you may not:

 

•                  reportinformation or enter information in the Company’s books, records or reportsthat fraudulently or intentionally hides, misrepresents or disguises the truenature of any financial or non-financial transaction or result;

 

•                  establishany undisclosed or unrecorded fund, account, asset or liability for anyimproper purpose;

 

•                  enterinto any transaction or agreement that accelerates, postpones or otherwisemanipulates the accurate and timely recording of revenues or expenses;

 

•                  intentionallymisclassify transactions as to accounts, business units or accounting periods;

 

•                  intentionallyfalsify technical, safety or performance data; or

 

•                  knowinglyassist others in any of the above.

 

**13.****                               Workingwith External Auditors**

 

Our external auditorshave a duty to review our records in a fair and accurate manner. You areexpected to cooperate with independent and internal auditors in good faith andin accordance with law.  In addition, youmust not fraudulently induce or influence, coerce, manipulate or mislead ourindependent or internal auditors regarding financial records, processes,controls or procedures or other matters relevant to their engagement.  You may not engage, directly or indirectly,any outside auditors to perform any audit, audit-related, tax or otherservices, including consulting, without written approval from the ChiefFinancial Officer and the Audit Committee of the Board of Directors.

 

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**14.****                               Obligationto Investigate and Report Potential Violations**

 

You should make appropriate inquiries in theevent you may see, for example:

 

•                  financialresults that seem inconsistent with underlying business performance;

 

•                  inaccuratefinancial records, including travel and expense reports, time sheets orinvoices;

 

•                  thecircumventing of mandated review and approval procedures;

 

•                  theabsence or weakness of processes or controls; or

 

•                  personswithin the Company seeking to improperly influence the work of our financial oraccounting personnel, or our external or internal auditors.

 

Dishonest or inaccurate reporting can lead tocivil or even criminal liability for you and the Company and can lead to a lossof public faith in the Company.  You arerequired to promptly report any case of suspected financial or operationalmisrepresentation or impropriety.

 

**15.****                               Informingthe Audit Committee**

 

The Audit Committee plays an important rolein ensuring the integrity of our public reports.  If you believe that questionable accounting orauditing conduct or practices have occurred or are occurring, you should notifythe Audit Committee of the Board of Directors.  If you are uncertain as to how to contact theAudit Committee directly, feel free to ask your supervisor, the Chief ExecutiveOfficer, the Chief Financial Officer or in-house legal counsel.  Further, the Company will provide amechanism, in compliance with SEC regulations, to allow for confidential and anonymoussubmissions directly to the Audit Committee. In particular, the Chief Executive Officer and senior financial officerssuch as the Chief Financial Officer and the Controller should promptly bring tothe attention of the Audit Committee any information of which he or she maybecome aware concerning, for example:

 

•                  theaccuracy of material disclosures made by the Company in its public filings;

 

•                  significantdeficiencies in the design or operation of internal controls or procedures thatcould adversely affect the Company’s ability to record, process, summarize orreport financial data;

 

•                  anyevidence of fraud that involves an employee who has a significant role in the Company’sfinancial reporting, disclosures or internal controls or procedures; or

 

•                  anyevidence of a material violation of the policies in this Code regardingfinancial reporting.

 

**16.****                               Requestsby Regulatory Authorities**

 

You must cooperate with appropriategovernment inquiries and investigations in accordance with law.  It is important, however, to protect the legalrights of the Company with respect to its nonpublic information.  All government requests for Companyinformation, documents or investigative interviews should be referred to the ChiefFinancial Officer or legal counsel. You should work with the Chief FinancialOfficer or legal counsel in responding to 

 

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requests by regulatory authorities to ensure adequate and completeresponses and to avoid improper disclosure of attorney-client privilegedmaterials, trade secret information or other nonpublic information. This policyshould not be construed to prevent an employee from disclosing information to agovernment or law enforcement agency, where the employee has reasonable causeto believe that the information discloses a violation of, or noncompliancewith, a state or federal statute or regulation.

 

**17.****                               CorporateDisclosures**

 

All directors, officers and employees shouldsupport the Company’s goal to have full, fair, accurate, timely andunderstandable disclosure in the periodic reports required to be filed by theCompany with the SEC.  The ChiefExecutive Officer and all senior financial officers are responsible for full,fair, accurate, timely and understandable disclosure in the periodic reportsrequired to be filed by the Company with the SEC.  Accordingly, it is the responsibility of theChief Executive Officer and each senior financial officer promptly to bring tothe attention of the Disclosure Committee, if applicable, and to the AuditCommittee any material information of which he or she may become aware thataffects the disclosures made by the Company in its public filings or otherwiseassist the Disclosure Committee, if applicable, and the Audit Committee in fulfillingtheir responsibilities.

 

Although most employees hold positions thatare removed from the Company’s required filings with the SEC, each director,officer and employee should promptly bring to the attention of the ChiefExecutive Officer, the Chief Financial Officer, the Company’s DisclosureCommittee, or the Audit Committee, as appropriate in the circumstances, any ofthe following:

 

(1)          Any material informationto which such individual may become aware that affects the disclosures made bythe Company in its public filings or would otherwise assist the Chief ExecutiveOfficer, the Chief Financial Officer, the Disclosure Committee, and the AuditCommittee in fulfilling their responsibilities with respect to such publicfilings;

 

(2)          Any information theindividual may have concerning (a) significant deficiencies in the design oroperation of internal controls that could adversely affect the Company’sability to record, process, summarize, and report financial data or (b) anyfraud, whether or not material, that involves the Company, its directors,officers or employees, including especially those officers and employees whohave a significant role in the Company’s financial reporting, disclosures orinternal controls;

 

(3)          Any information theindividual may have concerning any violation of this Code, including any actualor apparent conflicts of interest between personal and professionalrelationships, involving any management or other employees who have asignificant role in the Company’s financial reporting, disclosures, or internalcontrols; and

 

(4)          Any information theindividual may have concerning evidence of a material violation of thesecurities or other laws, rules or regulations applicable to the Company andthe operation of its business, by the Company or any agent thereof, or ofviolation of this Code.

 

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**18.****                               PublicCommunications by Employees**

 

You may not communicate externally on behalfof the Company unless you are authorized to do so.  The Company has established specific policiesregarding who may communicate information to the public, the press, marketprofessionals (such as securities analysts, institutional investors, investmentadvisors, brokers and dealers) and security holders on behalf of the Company:

 

•                  OurPresident, Chief Financial Officer and investor relations personnel, and theirauthorized designees, are our official spokespeople for financial matters.

 

•                  OurPresident and corporate communications personnel, and their authorized designees,are our official spokespeople for public comment, press, marketing, technicaland other such information.

 

You should refer all calls or other inquiriesfrom the press, market professionals or security holders to the InvestorRelations Department, which will see that the inquiry is directed to theappropriate persons within the Company.

 

All communications made to public audienceson behalf of the Company, including formal communications and presentationsmade to investors, customers or the press, require prior approval of the ChiefExecutive Officer or the Chief Financial Officer.

 

**19.****                               Protectionand Proper Use of Company Assets**

 

All directors, officers and employees shouldendeavor to protect the Company’s assets and ensure their efficient use.  Theft, carelessness and waste have a directimpact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reportedfor investigation.  Company assets shouldbe used for legitimate business purposes and should not be used for non-Companybusiness.

 

The obligation to protect the Company’sassets includes its proprietary information. Proprietary information includes intellectual property, such as tradesecrets, patents, trademarks, and copyrights, as well as business, marketingand service plans, engineering and manufacturing ideas, designs, databases,records, salary information, and any unpublished financial data andreports.  Unauthorized use ordistribution of this information would violate Company policy.  It could also be illegal and result in civilor even criminal penalties.

 

**20.****                               Paymentsto Government Personnel**

 

The U.S. Foreign Corrupt Practices Actprohibits giving anything of value, directly or indirectly, to officials offoreign governments or foreign political candidates in order to obtain orretain business.  It is strictlyprohibited to make illegal payments to government officials of any country.

 

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In addition, the U.S. government has a numberof laws and regulations regarding business gratuities that may be accepted byU.S. government personnel.  The promise,offer, or delivery to an official or employee of the U.S. government of a gift,favor or other gratuity in violation of these rules would not only violate Companypolicy but could also be a criminal offense. State and local governments, as well as foreign governments, may havesimilar rules.

 

**21.****                               Reportingany Illegal or Unethical Behavior**

 

Directors and officers are encouraged to talkto the Chief Executive Officer, the Chief Financial Officer or legal counsel,and employees are encouraged to talk to supervisors, managers, or otherappropriate personnel, when in doubt about the best course of action in aparticular situation.  Directors,officers and employees should report any observed illegal or unethical behaviorand any perceived violations of laws, rules, regulations or this Code toappropriate personnel.  It is the policyof the Company not to allow retaliation for reports of misconduct by others madein good faith.  Directors, officers andemployees are expected to cooperate in internal investigations of misconduct.

 

**22.****                               Confidentiality**

 

Directors, officers and employees mustmaintain the confidentiality of confidential information entrusted to them bythe Company or its customers, suppliers, joint venture partners or others withwhom the Company is considering a business or other transaction except whendisclosure is authorized by an executive officer or required or mandated bylaws or regulations.  Confidentialinformation includes all non-public information that might be useful or helpfulto competitors or harmful to the Company or its customers and suppliers, ifdisclosed. The obligation to preserve confidential information continues evenafter your employment ends.

 

**23.****                               Waiversof the Code of Conduct and Ethics**

 

Any waiver of this Code for directors orexecutive officers may be made only by the Board of Directors or a committee ofthe Board and will be promptly disclosed to stockholders as required byapplicable laws, rules, and regulations, including the rules of the SEC and Nasdaq.  Any such waiver also must be disclosed in aForm 8-K filed with the SEC.  Any requestfor a waiver of this Code by any other employees must first originate with thatemployee’s supervisor, who will seek guidance from senior management.

 

**24.****                               PubliclyAvailable**

 

This Code shall be posted on the Company’swebsite.

 

**25.****                               Enforcement**

 

The Board of Directors shall determine, ordesignate appropriate persons to determine, appropriate actions to be taken inthe even to of violations of this Code. Such actions shall be reasonably designed to deter wrongdoing and topromote accountability for adherence to this Code and to these additional procedures,and may include written notices to the individual involved that the Board hasdetermined that there has been a violation, censure by the Board, demotion orre-assignment of the individual involved, suspension with or without pay orbenefits (as determined by the Board) and termination of the individual’semployment or position.  In 

 

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determining the appropriate action in a particular case, the Board ofDirectors or such designee shall take into account all relevant information,including the nature and severity of the violation, whether the violation was asingle occurrence or repeated occurrences, whether the violation appears tohave been intentional or inadvertent, whether the individual in question hadbeen advised prior to the violation as to the proper course of action, andwhether or not the individual in question had committed other violations in thepast.

 

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**Catalytica Energy Systems, Inc.**

and wholly-owned subsidiaries

 

**Acknowledgment of**

**Code of Conduct and Ethics**

 

 

I have received and read the Code of Conduct andEthics.  I understand the policies setforth in the Code of Conduct and Ethics and agree to abide by the terms andguidelines set forth.  I understand thata violation of the policies, terms and guidelines set forth in the Code ofConduct and Ethics may result in severe consequences, including termination ofmy employment.

 

 
| Employees Signature:    |   |   | Date:  |   |   |
|-------------------------|--------|--------|--------|--------|--------|
|                    |   |   |   |
| Employee’s Printed |   |   |   |
| Name:                   |   |   |   |

 

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