Document:

Exhibit
4.01

 

[FACE OF NOTE]

 

Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.

 

REGISTERED                                                                                         CUSIP:
225434 AM 1

 

 

NO. 1                                                                                                                                    PRINCIPAL
AMOUNT: $4,197,000

 

CREDIT SUISSE (USA), INC.

Reverse Convertible Securities Linked to the Performance of Briggs &
Stratton Corp.

due March 30, 2007

 

CREDIT SUISSE (USA), INC., a Delaware corporation
(the “Company”, which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co., or registered assigns, at the office or agency of the
Company in New York, New York, the Redemption Amount (as defined on the reverse
hereof) on the Maturity Date (as defined on the reverse hereof), in the coin or
currency of the United States and to pay a coupon of
12.75% per annum on the principal amount from March 31, 2006. The coupon
payment will be payable quarterly in arrears on June 30, 2006, September 29,
2006, December 29, 2006, and March 30, 2007.

 

Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

 

This Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee under the Indenture referred to on the reverse
hereof.

 

F-1

 

IN WITNESS WHEREOF, the Company has caused this Note
to be duly executed under its corporate seal.

 

	
   

  	
  CREDIT SUISSE (USA), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
  By:

  	
     /s/ Peter Feeney

  	
   

  
	
   

  	
   

  	
  Name: Peter Feeney

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE (USA), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Simon Yates

  	
   

  
	
   

  	
   

  	
  Name: Simon Yates

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

 

Dated:  March 31,
2006

 

	
   

  	
  JPMORGAN CHASE, N.A.,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By: 

  	
       /s/ Ignazio Tamburello

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  

 

F-2

 

[REVERSE OF NOTE]

 

CREDIT SUISSE
(USA), INC.

Reverse Convertible Securities Linked to the Briggs & Stratton Corp.

due March 30, 2007

 

This Note is one of a
duly authorized issue of debentures, notes, bonds or other evidences of
indebtedness of the Company (the “Securities”) of the series hereinafter
specified, all issued or to be issued under and pursuant to a senior indenture,
dated as of June 1, 2001 (the “Indenture”), between the Company and JPMorgan
Chase Bank, as trustee (the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company, and the Holders of the Securities. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any), may be subject to different sinking, purchase or analogous funds (if
any) and may otherwise vary as provided in the Indenture. This Note is one of a
series designated as the Reverse Convertible Securities Linked to the
Performance of Briggs & Stratton Corp., due March 30, 2007 (the “Note”).

 

A coupon will be payable on this Note of
12.75% per annum on the principal amount from March 31, 2006. The coupon
payment will be payable quarterly in arrears on June 30, 2006, September 29,
2006, December 29, 2006, and March 30, 2007. 

 

This Note is payable in the manner, with the effect
and subject to the conditions provided in the Indenture.

 

If a payment date is not a business day as defined in
the Indenture at a place of payment, payment may be made at that place on the
next succeeding day that is a business day, and no interest shall accrue for
the intervening period.

 

The Indenture provides that, without prior notice to
any Holders, the Company and the Trustee may amend the Indenture and the
Securities of any series with the written consent of the Holders of a majority
in principal amount of the outstanding Securities of all series affected by
such amendment (all such series voting as one class), and the Holders of a
majority in principal amount of the outstanding Securities of all series
affected thereby (all such series voting as one class) may waive future
compliance by the Company with any provision of the Indenture or the Securities
of such series by written notice to the Trustee; provided that, without the
consent of each Holder of the Securities of each series affected thereby, an
amendment or waiver, including a waiver of past defaults, may not: (i) extend
the stated maturity of the Principal of, or any sinking fund obligation or any
installment of interest on, such Holder’s Security, or reduce the principal
amount thereof or the rate of interest thereon (including any amount in respect
of original issue discount), or any premium payable with respect thereto, or
adversely affect the rights of such Holder under any mandatory redemption or
repurchase provision or any right of redemption or repurchase at the option of
such Holder, or reduce the amount of the Principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy, or

 

R-1

 

change any place of payment where, or the currency in which, any
Security of such series or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the due date therefor; (ii) reduce the percentage in principal amount
of outstanding Securities of the relevant series the consent of whose Holders
is required for any such supplemental indenture, for any waiver of compliance
with certain provisions of the Indenture or certain Defaults and their
consequences provided for in the Indenture; (iii) waive a Default in the
payment of Principal of or interest on any Security of such Holder; or (iv)
modify any of the provisions of the Indenture governing supplemental indentures
with the consent of Securityholders except to increase any such percentage or
to provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Security affected
thereby.

 

The Indenture provides that, subject to certain
conditions, the Holders of at least a majority in principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the
Principal as is then accelerable) of the outstanding Securities of all series
affected (voting as a single class), by notice to the Trustee, may waive an
existing Default or Event of Default with respect to the Securities of such
series and its consequences, except a Default in the payment of Principal of or
interest on any Security or in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the Holder
of each outstanding Security affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default with respect to the Securities of such
series arising therefrom shall be deemed to have been cured, for every purpose
of the Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereto.

 

The Indenture provides that a series of Securities may
include one or more tranches (each a “tranche”) of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including authentication dates and public
offering prices, but all the Securities within each such tranche shall have
identical terms, including authentication date and public offering price.
Notwithstanding any other provision of the Indenture, subject to certain
exceptions, with respect to sections of the Indenture concerning the execution,
authentication and terms of the Securities, redemption of the Securities,
Events of Default of the Securities, defeasance of the Securities and amendment
of the Indenture, if any series of Securities includes more than one tranche,
all provisions of such sections applicable to any series of Securities shall be
deemed equally applicable to each tranche of any series of Securities in the
same manner as though originally designated a series unless otherwise provided
with respect to such series or tranche pursuant to a board resolution or a
supplemental indenture establishing such series or tranche.

 

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Redemption Amount of
this Note in the manner, at the place, at the time and in the coin or currency
herein prescribed.

 

The Securities are issuable initially only in
registered form without coupons in denominations of $5,000 and any integral
multiples of $1,000 in excess of that amount at the office or agency of the
Company in the Borough of Manhattan, The City of New York, and in the manner
and subject to the limitations provided in the Indenture.

 

R-2

 

The Securities will not be redeemable at the option of
the Company prior to maturity.

 

The Company will not be required to pay any Additional
Amounts on the Securities.

 

Maturity Date

 

The Maturity Date of the Securities is March 30, 2007 (the “Maturity Date”);
however, if a market disruption event exists on the Valuation Date, as
determined by the Calculation Agent, the Maturity Date will be the later of
March 30, 2007, and the third business day following the date on which the closing
price for the reference shares is calculated.

 

Redemption Amount

 

The Company will redeem the Securities at maturity for
a redemption amount in cash that will be based on the performance of the
reference shares during the term of the Securities (the “redemption amount”):

 

(1)          If the closing price of
the reference shares on the New York Stock Exchange (the “relevant exchange”)
is not less than the knock-in level, which is 80% of the Initial Share Price,
on any day from but not including March 28, 2006, which is the initial setting
date, to and including March 26, 2007 (the “Valuation Date”), the redemption
amount will equal a cash payment equal to 100% of the principal amount of the
Securities.

 

(2)          If (i) the closing price
of the reference shares on the relevant exchange is less than the knock-in
level on any day from but not including March 28, 2006, which is the initial
setting date, to and including the Valuation Date and (ii) the closing price of
the reference shares on the relevant exchange on the Valuation Date, which we
refer to as the final share price, is greater than or equal to the Initial
Share Price, the redemption amount will equal a cash payment equal to 100% of
the principal amount of the Securities.

 

(3)          Otherwise, the
redemption amount will be the physical delivery amount. The physical delivery
amount will be the number of reference shares per $1,000 principal amount of
Securities equal to $1,000 divided by the Initial Share Price. The market value
of the physical delivery amount will be less than the principal amount of the
Securities and may be zero. 

 

The “Initial Share Price” is $35.20.

 

A “business day” means a day, other than a Saturday,
Sunday or a day on which banking institutions in New York, New York are
generally authorized or obligated by law, regulation or executive order to
close and that is also a Trading Day.

 

A “trading day” means any day, as determined by the
Calculation Agent, on which trading is generally conducted for reference shares
(or, but for the occurrence of a market disruption event, would have been
generally conducted) on the relevant exchange and for options

 

R-3

 

and
other derivative instruments on the reference shares on the Chicago Mercantile
Exchange and the Chicago Board Options Exchange, which we refer to collectively
as the related exchanges, other than a day on which the relevant exchange or
the related exchanges are scheduled to close prior to their regular weekday
closing time.

 

Market Disruption Events

 

If no final share price is available on the Valuation
Date because of a market disruption event, as determined by the Calculation
Agent in its sole discretion, the Calculation Agent may postpone the
calculation of the final share price until the earlier of the date such market
disruption event has ceased or three trading days after the Valuation Date, as
the case may be. On such third trading day, in the event there still exists a
market disruption event, the Calculation Agent will determine the final share price
using its good faith estimate of the value for the reference shares as of the
closing time on the relevant exchange on such date. If a market disruption
event exists on the Valuation Date, the Maturity Date of the Securities will be
the later of the original Maturity Date and the third business day following
the day on which the final share price is calculated. No interest will accrue
or other payment be payable because of any postponement of the Maturity Date.

 

A “market disruption event” means the occurrence or
existence of any suspension of or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by any relevant exchange or
market or otherwise) of, or the unavailability, through a recognized system of
public dissemination of transaction information, of accurate price, volume or
related information in respect of (a) the reference shares or (b) any options
or futures contracts, or any options on such futures contracts, relating to the
reference shares if, in each case, in the determination of the Calculation
Agent, in its sole discretion, any such suspension, limitation or
unavailability is material.

 

For purposes of determining whether a market
disruption event has occurred: (1) a limitation on the hours or number of days
of trading will not constitute a market disruption event if it results from an
announced change in the regular business hours of the relevant exchange; (2) a
decision permanently to discontinue trading in the relevant options or futures
contract will not constitute a market disruption event; (3) limitations
pursuant to New York Stock Exchange Rule 80A—Index Arbitrage Trading
Restrictions (or any applicable rule or regulation enacted or promulgated by
the New York Stock Exchange, any other self-regulatory organization or the SEC
of similar scope as determined by the Calculation Agent) on trading during
significant market fluctuations will constitute a market disruption event; (4)
a suspension of trading in an options contract on the reference shares by the
primary securities market trading in such options, if available, by reason of
(x) a price change exceeding limits set by such securities exchange or market,
(y) an imbalance of orders relating to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts will constitute a suspension or
material limitation of trading in options contracts related to the reference
shares notwithstanding that such suspension or material limitation is less than
two hours; (5) a suspension, absence or material limitation of trading on the
primary securities market on which options contracts related to the reference
shares are traded will not include any time when such securities market is
itself closed for trading under ordinary circumstances; and (6) a “suspension
or material limitation” on an exchange or in a market will include a suspension
or material limitation of trading by one class

 

R-4

 

of investors provided that such suspension continues for more than two
hours of trading or during the last one-half hour period preceding the close of
trading on the relevant exchange or market (but will not include limitations
imposed on certain types of trading under New York Stock Exchange Rule 80A or
any applicable rule or regulation enacted or promulgated by the New York Stock
Exchange, NASDAQ, any other self-regulatory organization or the SEC of a
similar scope or as a replacement for Rule 80A, as determined by the
Calculation Agent) and will not include any time when such exchange or market
is closed for trading as part of such exchange’s or market’s regularly
scheduled business hours.

 

Based on the information currently available to us, on
October 27, 1997, the New York Stock Exchange suspended all trading during the
one-half hour period preceding the close of trading pursuant to New York Stock
Exchange Rule 80B and, on each of September 11, 12, 13 and 14, 2001, the New
York Stock Exchange suspended all trading for the entire day due to certain
terrorist activity. If any such suspension of trading occurred during the term
of the Securities, it would constitute a market disruption event. The existence
or non-existence of these circumstances, however, is not necessarily indicative
of the likelihood of these circumstances arising or not arising in the future.

 

Antidilution Adjustments 

 

General

 

The Calculation Agent will
adjust the Initial Share Price and the physical delivery amount if certain
corporate actions and other events described below (each of which, an “adjustment
event”), occur, and the Calculation Agent determines that such adjustment event
has a diluting or concentrative effect on the theoretical value of the
reference shares. Set forth below are examples of how adjustment events may
lead to adjustments to the Initial Share Price and the physical delivery
amount.

 

Upon the occurrence of an
adjustment event that the Calculation Agent determines has a diluting or
concentrative effect on the theoretical value of the reference shares, for
purposes only of determining whether (i) the price of the reference shares is
less than or equal to the knock-in level and (ii) the final share price is less
than or equal to the Initial Share Price, the Calculation Agent will typically
adjust the Initial Share Price according to the following formula:

 

 

The physical delivery amount
will be adjusted by the Calculation Agent as set forth in the specific examples
below.

 

The adjustments described
below do not cover all events that could affect the value of the Securities.

 

R-5

 

Adjustments

 

If an adjustment event occurs and the Calculation Agent
determines that the event has a diluting or concentrative effect on the
theoretical value of the reference shares, the Calculation Agent will calculate
a corresponding adjustment to the Initial Share Price and the physical delivery
amount as the Calculation Agent determines appropriate to account for that
diluting or concentrative effect. The Calculation Agent will also determine the
effective date of that adjustment, and the replacement of the reference shares,
if applicable, in the event of consolidation or merger. Upon making any such
adjustment, the Calculation Agent will give notice as soon as practicable to
the Trustee, stating the adjustment of the Initial Share Price and physical
delivery amount.

 

If more than one adjustment event occurs, the Calculation
Agent will make an adjustment for each such adjustment event in the order in
which they occur, and on a cumulative basis. Accordingly, having adjusted the
Initial Share Price and the physical delivery amount for the first such
adjustment event, the Calculation Agent will adjust the Initial Share Price and
the physical delivery amount for the second adjustment event, applying the required
adjustment to the Initial Share Price and the physical delivery amount as
already adjusted for the first adjustment event, and so on for each subsequent
adjustment event.

 

The Calculation Agent will not have to adjust the Initial
Share Price and the physical delivery amount for any adjustment event unless the adjustment would result in a
change to the Initial Share Price or the physical delivery amount of at least
0.1% in the Initial Share Price or the physical delivery amount that would
apply without the adjustment. The Initial Share Price and the physical delivery
amount resulting from any adjustment would be rounded up or down, as
appropriate, to, in the case of the Initial Share Price, the nearest cent, and,
in the case of the physical delivery amount, the nearest thousandth, with
one-half cent and five ten-thousandths, respectively, being rounded upwards.

 

If an adjustment event requiring antidilution adjustment
occurs, the Calculation Agent will make any adjustments with a view to
offsetting, to the extent practical, any change in the Holders’ economic
position relative to the Securities that results solely from that event. The
Calculation Agent may, in its sole discretion, modify any antidilution
adjustments as necessary to ensure an equitable result.

 

The Calculation Agent has sole discretion in making all
determinations with respect to antidilution adjustments, including any
determination as to whether an adjustment event requiring an antidilution
adjustment has occurred, as to the nature of the adjustment required and how it
will be made. In the absence of manifest error, those determinations will be
conclusive for all purposes and will be binding on the Holders and the Company,
without any liability on the part of the Calculation Agent. Upon written
request, the Calculation Agent will provide information about any adjustments
it makes.

 

R-6

 

Events requiring an antidilution
adjustment

 

The following is a list of adjustment events that may
require an antidilution adjustment:

 

(a)                                  a subdivision, consolidation
or reclassification of the reference shares or a free distribution or dividend
of any reference shares to existing holders of reference shares by way of
bonus, capitalization or similar issue;

 

(b)                                 a dividend or other
distribution to existing holders of reference shares of (i) the reference
shares, (ii) other share capital or securities granting the right to payment of
dividends equally or proportionately with such payments to holders of the
reference shares or (iii) any other type of securities, rights or warrants in
any case for payment (in cash or otherwise) at less than the prevailing market
price as determined by the Calculation Agent;

 

(c)                                  the declaration by the
issuer of the reference shares of an extraordinary or special dividend or other
distribution whether in cash or reference shares or other assets;

 

(d)                                 a repurchase of its common
stock by the issuer of the reference shares whether out of profits or capital
and whether the consideration for such repurchase is cash, securities or
otherwise;

 

(e)                                  a consolidation of the
issuer of the reference shares with another company or merger of the issuer of
the reference shares with another company; and

 

(f)                                    any other similar event that
may have a diluting or concentrative effect on the theoretical value of the
reference shares.

 

Certain
adjustment events are discussed in greater detail below.

 

Stock splits

 

A stock split is an increase
in the number of a corporation’s outstanding shares of stock without any change
in its stockholders’ equity. As a result of a stock split, each outstanding
share will be worth less.

 

If the reference shares are subject to a stock split, the
Calculation Agent will adjust the physical delivery amount to equal the sum of
the prior physical delivery amount—i.e., the physical delivery amount before
that adjustment—and the product of (i) the number of additional shares issued
in the stock split with respect to each of the reference shares times (ii) the
prior physical delivery amount.

 

Reverse stock splits

 

A reverse stock split is a decrease in the number of a
corporation’s outstanding shares of stock without any change in its
stockholders’ equity. As a result of a reverse stock split, each outstanding
share will be worth more.

 

If the reference shares are subject to a reverse stock
split, the Calculation Agent will adjust the physical delivery amount to equal
the product of the prior physical delivery amount and the quotient of (i) the
number of reference shares outstanding immediately after the reverse

 

R-7

 

stock split becomes
effective divided by (ii) the number of reference shares outstanding
immediately before the reverse stock split becomes effective. 

 

Stock dividends

 

In a stock dividend, a corporation issues additional shares
of its stock to all holders of its outstanding stock in proportion to the
shares they own. As a result of a stock dividend, each outstanding share will
be worth less.

 

If the reference shares are subject to a stock dividend
payable in the reference shares, then the Calculation Agent will adjust the
physical delivery amount to equal the sum of the prior physical delivery amount
and the product of (i) the number of additional shares issued in the stock dividend
with respect to each of the reference shares times (ii) the prior physical
delivery amount.

 

Other dividends and distributions

 

If the issuer of the reference shares declares a dividend
to be distributed to holders of record of the reference shares as of a date
falling in the period that begins on the day immediately following the
Valuation Date and ends on the day immediately prior to the Maturity Date, any
such dividend will not be paid to Holders.

 

The physical delivery amount will not be adjusted to
reflect any dividends or distributions paid with respect to the reference
shares, other than (i) stock dividends described above; (ii) issuances of
transferable rights and warrants as described in “—Transferable rights and
warrants” below; and (iii) extraordinary dividends as described below.

 

A dividend or other distribution with respect to the
reference shares will be deemed to be an “extraordinary dividend” if its per
share value exceeds that of the immediately preceding non-extraordinary
dividend, if any, for the reference shares by an amount equal to at least
10.00% of the market price of the reference shares on the business day before
the extraordinary dividend date. The ex dividend date for any dividend or other
distribution is the first day on which the reference shares trade without the
right to receive that dividend or distribution. If an extraordinary dividend
occurs, the Calculation Agent will adjust the physical delivery amount to equal
the product of (1) the prior physical delivery amount times (2) a fraction, the
numerator of which is the market price of the reference shares on the business
day before the ex dividend date and the denominator of which is the amount by
which that market price exceeds the extraordinary dividend adjustment amount. The
“extraordinary dividend adjustment amount” with respect to an extraordinary
dividend for the reference shares equals: (i) for an extraordinary dividend
that is paid in lieu of a regular quarterly dividend, the amount of the
extraordinary dividend per share of the reference shares minus the amount per
share of the immediately preceding dividend, if any, that was not an
extraordinary dividend for the reference shares, or (ii) for an extraordinary
dividend that is not paid in lieu of a regular quarterly dividend, the amount
per share of the extraordinary dividend.

 

To the extent an extraordinary dividend is not paid in
cash, the value of the non-cash component will be determined by the Calculation
Agent. A distribution on the reference shares that is a dividend payable in the
reference shares, an issuance of rights or warrants or a spin-off

 

R-8

 

event and that is also an
extraordinary dividend will result in an adjustment to the physical delivery
amount only as described in “Stock dividends” above, “Transferable rights and
warrants” below or “Reorganization events” below, as the case may be, and not
as described here.

 

Transferable rights and warrants

 

If the issuer of the reference shares issues transferable rights
or warrants to all holders of the reference shares to subscribe for or purchase
the reference shares at an exercise price per share that is less than the
market price of the reference shares on the business day before the
extraordinary dividend date for the issuance, then the physical delivery amount
will be adjusted by multiplying the prior physical delivery amount by the
following fraction: (i) the numerator will be the sum of the number of
reference shares outstanding at the close of business on the day before that ex
dividend date and the total number of additional reference shares offered for
subscription or purchase under those transferable rights or warrants, and (ii)
the denominator will be the sum of the number of reference shares outstanding at
the close of business on the day before that ex dividend date and the product
of (1) the total number of additional reference shares offered for subscription
or purchase under the transferable rights or warrants times (2) the exercise
price of those transferable rights or warrants divided by the market price on
the business day before that extraordinary dividend date.

 

Reorganization events

 

Each of the following may be a reorganization event: (i)
the reference shares are reclassified or changed; (ii) the issuer of the
reference shares has been subject to a merger, consolidation or other
combination and either is not the surviving entity or is the surviving entity
but all outstanding reference shares are exchanged for or converted into other
property; (iii) a statutory share exchange involving outstanding reference
shares and the securities of another entity occurs, other than as part of an
event described above; (iv) the issuer of the reference shares effects a
spin-off (i.e., issues to all holders of reference shares common stock equity
securities of another issuer) other than as part of an event described above;
(v) the issuer of the reference shares sells or otherwise transfers its
property and assets as an entirety or substantially as an entirety to another
entity (each of the events in clauses (i) through (v) above, a “merger event”);
(vi) a takeover offer, tender offer, exchange offer, solicitation, proposal or
other event by any entity or person that results in such entity or person
purchasing, or otherwise obtaining or having the right to obtain, by conversion
or other means, not less than a majority of the outstanding voting reference
shares as determined by the Calculation Agent, based upon the making of filings
with governmental or self-regulatory agencies or such other information as the
Calculation Agent deems relevant, which we refer to as a tender offer; (vii)
the exchange on which the reference shares trade announces that pursuant to the
rules of such exchange, the reference shares cease (or will cease) to be
listed, traded or publicly quoted on it for any reason (other than a merger
event or tender offer) and are not immediately re-listed, re-traded or
re-quoted on another major U.S. exchange or quotation system (a “delisting
event”); and (viii) the issuer of the reference shares is liquidated, dissolved
or wound up or is subject to a proceeding under any applicable bankruptcy,
insolvency or other similar law (each, an “insolvency event”).

 

R-9

 

Adjustments for reorganization events

 

If a merger event occurs and a holder of the reference
shares that makes no election, vote or decision in connection with such merger
event would receive as full or partial consideration ordinary or common shares
of any person (other than the issuer of the reference shares) that are publicly
quoted, traded or listed on any major U.S. exchange or quotation system (the
“new shares”), then the
Calculation Agent will adjust the physical delivery amount so as to consist of
the amount and type of property distributed in the reorganization event in
respect of the prior physical delivery amount. In this instance, if more than
one type of property is distributed, the physical delivery amount will be
adjusted so as to consist of each type of property distributed, in a
proportionate amount, so that the value of each type of property comprising the
new physical delivery amount as a percentage of the total value of the new
physical delivery amount equals the value of that type of property as a
percentage of the total value of all of the property distributed in the
reorganization event.

 

If a tender offer occurs, and the holder of the reference
shares can elect to receive new shares as full or partial consideration in
respect of such tender offer, then the Calculation Agent will adjust the
physical delivery amount in accordance with the preceding paragraph.

 

If a merger event occurs, and the consideration in respect
of such event does not consist in full or in part of new shares (or in the case
of a tender offer, a holder of the reference shares would not be able to elect
to receive in full or in part any new shares as consideration in respect of
such tender offer), then the Calculation Agent will accelerate the Maturity
Date to the day which is four business days after the approval date (as defined
below). The amount payable at maturity will be determined as described below
under “Events of default and acceleration.” The approval date is the closing
date of a merger event or, in the case of a tender offer, the date on which the
person or entity making the tender offer acquires or acquires the right to
obtain the relevant percentage of reference shares. 

 

If a delisting event or an insolvency event occurs, the
Calculation Agent will accelerate the Maturity Date to the day which is four
business days after the announcement date (as defined below). On the Maturity
Date, the Company will pay to each Holder the physical delivery amount and for
the purposes of such calculation, the final share price will be deemed to be
the closing price of the reference shares on the business day immediately prior
to the announcement date. The announcement date means, in the case of a
delisting event, the day of the first public announcement by the relevant exchange
that the reference shares will cease to trade or be publicly quoted on such
exchange, or, in the case of an insolvency event, the day of the first public
announcement of the institution of a proceeding or presentation of a petition
or passing of a resolution (or other analogous procedure in any jurisdiction)
that leads to an insolvency event with respect to the issuer of the reference
shares.

 

If a merger event or tender offer occurs, coupon payment
amounts will accrue on the Securities through the approval date and be paid on
the accelerated Maturity Date. Such coupon payments will be calculated using a
360-day year comprised of twelve 30-day months. If a delisting event or an
insolvency event occurs, the Company will pay all remaining scheduled unpaid coupon
payments due to a Holder through the scheduled Maturity Date on the accelerated
Maturity Date.

 

R-10

 

For the purposes of making an adjustment required by a
reorganization event, the Calculation Agent will determine the value of each
type of property distributed in the distribution, in its sole discretion. For
any property distributed consisting of new shares, the Calculation Agent will
use the closing price of the new shares on the approval date. The Calculation
Agent may value other types of property in any manner it determines, in its
sole discretion, to be appropriate. If a holder of the common stock of the
issuer of the reference shares elects to receive different types or
combinations of types of property in the reorganization event, such property
will consist of the types and amounts of each type distributed to a holder that
makes no election, as determined by the Calculation Agent.

 

If a reorganization event occurs and the Calculation Agent
adjusts the physical delivery amount to consist of the property distributed in
the reorganization event as described above, the Calculation Agent will make
further antidilution adjustments for later events that affect such property, or
any component of such property, comprising the new physical delivery amount.
The Calculation Agent will do so to the same extent that it would make
adjustments if the common stock of the issuer of the reference shares was
outstanding and was affected by the same kinds of events. If a subsequent
reorganization event affects only a particular component of the physical
delivery amount, the required adjustment will be made with respect to that
component, as if it alone were the physical delivery amount. For example, if
the issuer of the reference shares merges into another company and each share
of its common stock is converted into the right to receive two new shares of
the surviving company and a specified amount of cash, the physical delivery
amount will be adjusted to consist of two new shares and the specified amount
of cash per reference share. The Calculation Agent will adjust the common share
component of the new physical delivery amount to reflect any later stock split
or other event, including any later reorganization event, that affects the new
shares, to the extent described in this section entitled “Antidilution
adjustments” as if the new shares were the common stock of the issuer of the
reference shares. In that event, the cash component will not be adjusted but
will continue to be a component of the physical delivery amount. Consequently,
Holders who receive reference shares at maturity will be entitled to receive,
for each $1,000 of the outstanding principal amount of the Securities being
exchanged, all components of the physical delivery amount in effect on the
exchange date, with each component having been adjusted on a sequential and
cumulative basis for all relevant events requiring adjustment on or before the
exchange date. 

 

If a reorganization event
occurs, the property distributed in the event will be substituted for the
common stock of the issuer of the reference shares as described above.
Consequently, references to the common stock of the issuer of the reference
shares mean any property that is distributed in a reorganization event and
comprises the adjusted physical delivery amount. Similarly, references to the
issuer of the reference shares mean any successor entity in a reorganization
event.

 

Events of Default and Acceleration

 

In case an Event of Default (as defined in the
Indenture) with respect to the Securities shall have occurred and be
continuing, the amount declared due and payable upon any acceleration of the
Securities (in accordance with the acceleration provisions set forth in the

 

R-11

 

prospectus) will be determined by the Calculation Agent and will equal,
for each security, the arithmetic average, as determined by the Calculation
Agent, of the fair market value of the Securities as determined by at least three
but not more than five broker-dealers (which may include Credit Suisse
Securities (USA) LLC or any of the Company’s other subsidiaries or affiliates)
as will make such fair market value determinations available to the Calculation
Agent.

 

The Company, the Trustee and any agent of the Company
or the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon) for the
purpose of receiving payment of, or on account of, the redemption amount
hereof, and for all other purposes, and neither the Company nor the Trustee nor
any agent of the Company or the Trustee shall be affected by any notice to the
contrary.

 

No recourse under or upon any obligation, covenant or
agreement contained in the Indenture or any indenture supplemental thereto or
in any Note, or because of any indebtedness evidenced thereby, shall be had
against any incorporator as such, or against any past, present or future
stockholder, officer, director or employee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.

 

The Calculation Agent for the Securities (the
“Calculation Agent”) is Credit Suisse International. The calculations and
determinations of the Calculation Agent will be final and binding upon all
parties (except in the case of manifest error). The Calculation Agent will have
no responsibility for good faith errors or omissions in its calculations and
determinations, whether caused by negligence or otherwise.

 

Terms used herein that are defined in the Indenture
and not otherwise defined herein shall have the respective meanings assigned
thereto in the Indenture.

 

The laws of the State of New York (without regard to
conflicts of laws principles thereof) shall govern this Note.

 

R-12

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

 

[PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]

 

 

[PLEASE PRINT OR TYPE
NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

 

the within Note and all
rights thereunder, hereby irrevocably constituting and appointing

 

                                                                                                                                                                                         Attorney
to transfer such Note on the books of the Issuer, with full power of
substitution in the premises.

 

	
   

  	
   

  	
   

  	
  Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:The signature to
  this assignment must correspond with the name as written upon the face of the
  within Note in every particular without alteration or enlargement or any
  change whatsoever.

  
						

 

R-13Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement made and entered into
this 14th day of February, 2006 (“Agreement”), by and between Natrol, Inc.,
a Delaware corporation (together with any successor or successors thereto, the “Company”)
and Wayne Bos (“Indemnitee”):

 

WHEREAS, it is essential to the Company that it be
able to retain and attract as directors the most capable persons available;

 

WHEREAS, increased corporate litigation has subjected
directors to litigation risks and expenses and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;

 

WHEREAS, its by-laws permit the Company to indemnify
its directors to the fullest extent permitted by law and permit the Company to
make other indemnification arrangements and agreements;

 

WHEREAS, the Company desires to provide Indemnitee
with specific contractual assurance of Indemnitee’s rights to full
indemnification against litigation risks and expenses (regardless, among other
things, of any amendment to or revocation of such by-laws or any change in the
ownership of the Company or the composition of its Board of Directors), which
indemnification is intended to be greater than that which is afforded by the
Company’s certificate of incorporation, by-laws and, to the extent insurance is
available, the coverage of Indemnitee under the Company’s directors and
officers liability insurance policies; and

 

WHEREAS, Indemnitee is relying upon the rights
afforded under this Agreement in continuing in Indemnitee’s position as a
director of the Company:

 

NOW, THEREFORE, in consideration of the premises and
the covenants contained herein, the Company and Indemnitee do hereby covenant
and agree as follows:

 

1.                                      Definitions.

 

(a)                                  “Corporate
Status” describes the status of a person who is serving or has served (i) as
a director of the Company, (ii) in any capacity with respect to any
employee benefit plan of the Company, or (iii) as a director, partner,
trustee, officer, employee, or agent of any other Entity at the request of the
Company.

 

(b)                                 “Entity”
shall mean any corporation, partnership, joint venture, trust, foundation,
association, organization or other legal entity and any group or division of
the Company or any of its subsidiaries.

 

(c)                                  “Expenses”
shall mean all reasonable fees, costs and expenses incurred in connection with
any Proceeding (as defined below), including, without limitation, attorneys’
fees, disbursements and retainers (including, without limitation, any such
fees, disbursements and retainers incurred by Indemnitee pursuant to Section 10
of this Agreement), fees and disbursements of expert witnesses, private
investigators and

 

 

professional advisors
(including, without limitation, accountants and investment bankers), court
costs, transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges, postage,
delivery services, secretarial services, and other disbursements and expenses.

 

(d)                                 “Indemnifiable
Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have
the meanings ascribed to those terms in Section 3(a) below.

 

(e)                                  “Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.

 

(f)                                    “Proceeding”
shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil,
criminal, administrative or investigative, whether formal or informal,
including a proceeding initiated by Indemnitee pursuant to Section 10 of
this Agreement to enforce Indemnitee’s rights hereunder.

 

2.                                      Services of Indemnitee. In consideration of the Company’s covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee’s service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

 

3.                                      Agreement to Indemnify. The Company agrees to indemnify Indemnitee as
follows:

 

(a)                                  Subject
to the exceptions contained in Section 4(a) below, if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding (other than
an action by or in the right of the Company) by reason of Indemnitee’s
Corporate Status, Indemnitee shall be indemnified by the Company against all
Expenses and Liabilities incurred or paid by Indemnitee in connection with such
Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable
Liabilities,” respectively, and collectively as “Indemnifiable Amounts”).

 

(b)                                 Subject
to the exceptions contained in Section 4(b) below, if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding by or in
the right of the Company to procure a judgment in its favor by reason of
Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company
against all Indemnifiable Expenses.

 

2

 

4.                                      Exceptions to Indemnification. Indemnitee shall be entitled to indemnification
under Sections 3(a) and 3(b) above in all circumstances other
than the following:

 

(a)                                  If
indemnification is requested under Section 3(a) and it has been
adjudicated finally by a court of competent jurisdiction that, in connection
with the subject of the Proceeding out of which the claim for indemnification
has arisen, Indemnitee failed to act in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal action or proceeding, Indemnitee had
reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee
shall not be entitled to payment of Indemnifiable Amounts hereunder.

 

(b)                                 If
indemnification is requested under Section 3(b) and

 

(i)                                     it
has been adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder; or

 

(ii)                                  it
has been adjudicated finally by a court of competent jurisdiction that
Indemnitee is liable to the Company with respect to any claim, issue or matter
involved in the Proceeding out of which the claim for indemnification has
arisen, including, without limitation, a claim that Indemnitee received an
improper personal benefit, no Indemnifiable Expenses shall be paid with respect
to such claim, issue or matter unless the Court of Chancery or another court in
which such Proceeding was brought shall determine upon application that,
despite the adjudication of liability, but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity for such
Indemnifiable Expenses which such court shall deem proper.

 

5.                                      Procedure for Payment of
Indemnifiable Amounts. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within twenty (20) calendar days of receipt of the request. At the request of
the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee
is entitled to indemnification hereunder.

 

6.                                      Indemnification for Expenses of a
Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such

 

3

 

Proceeding, the Company shall indemnify Indemnitee
against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Agreement, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such claim, issue or matter.

 

7.                                      Effect of Certain Resolutions. Neither the settlement or termination of any
Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal action or proceeding, had reasonable
cause to believe that Indemnitee’s action was unlawful.

 

8.                                      Agreement to Advance Interim
Expenses; Conditions. The Company
shall pay to Indemnitee all Indemnifiable Expenses incurred by Indemnitee in
connection with any Proceeding, including a Proceeding by or in the right of
the Company, in advance of the final disposition of such Proceeding, if
Indemnitee furnishes the Company with a written undertaking to repay the amount
of such Indemnifiable Expenses advanced to Indemnitee if it is finally
determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification with respect to such Expenses. Such
undertaking shall be an unlimited general obligation of Indemnitee, shall be
accepted by the Company without regard to the financial ability of Indemnitee
to make repayment, and in no event shall be required to be secured.

 

9.                                      Procedure for Payment of Interim
Expenses. Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Expenses for
which Indemnitee seeks an advancement under Section 8 of this Agreement,
together with documentation evidencing that Indemnitee has incurred such
Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8
shall be made no later than twenty (20) calendar days after the Company’s
receipt of such request and the undertaking required by Section 8.

 

10.                               Remedies of Indemnitee.

 

(a)                                  Right
to Petition Court. In the event that Indemnitee makes a request for payment
of Indemnifiable Amounts under Sections 3 and 5 above or a request for an
advancement of Indemnifiable Expenses under Sections 8 and 9 above and the
Company fails to make such payment or advancement in a timely manner pursuant
to the terms of this Agreement, Indemnitee may petition the appropriate
judicial authority to enforce the Company’s obligations under this Agreement.

 

(b)                                 Burden
of Proof. In any judicial proceeding brought under Section 10(a) above,
the Company shall have the burden of proving that Indemnitee is not entitled to
payment of Indemnifiable Amounts hereunder.

 

4

 

(c)                                  Expenses.
The Company agrees to reimburse Indemnitee in full for any Expenses incurred by
Indemnitee in connection with investigating, preparing for, litigating,
defending or settling any action brought by Indemnitee under Section 10(a) above,
or in connection with any claim or counterclaim brought by the Company in
connection therewith.

 

(d)                                 Validity
of Agreement. The Company shall be precluded from asserting in any
Proceeding, including, without limitation, an action under Section 10(a) above,
that the provisions of this Agreement are not valid, binding and enforceable or
that there is insufficient consideration for this Agreement and shall stipulate
in court that the Company is bound by all the provisions of this Agreement.

 

(e)                                  Failure
to Act Not a Defense. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel, or stockholders)
to make a determination concerning the permissibility of the payment of
Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this
Agreement shall not be a defense in any action brought under Section 10(a) above,
and shall not create a presumption that such payment or advancement is not
permissible.

 

11.                               Representations and Warranties of
the Company. The Company hereby
represents and warrants to Indemnitee as follows:

 

(a)                                  Authority.
The Company has all necessary power and authority to enter into, and be bound
by the terms of, this Agreement, and the execution, delivery and performance of
the undertakings contemplated by this Agreement have been duly authorized by
the Company.

 

(b)                                 Enforceability.
This Agreement, when executed and delivered by the Company in accordance with
the provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors’ rights generally.

 

12.                               Insurance. The Company will use its commercially reasonable
efforts to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the Indemnitee with coverage for losses from
wrongful acts, and to ensure the Company’s performance of its indemnification
obligations under this Agreement. In all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee at least the same rights and benefits as are accorded
to the most favorably insured of the Company’s officers and directors. Notwithstanding
the foregoing, if the Company, after employing commercially reasonable efforts
as provided in this section, determines in good faith that such insurance is
not reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, or if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit the Company shall use its commercially reasonable efforts
to obtain and maintain a policy or

 

5

 

policies of insurance with coverage having
features as similar as practicable to those described above.

 

13.                               Contract Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and
advancement of Indemnifiable Expenses provided by this Agreement shall be in
addition to, but not exclusive of, any other rights which Indemnitee may have
at any time under applicable law, the Company’s by-laws or certificate of
incorporation, or any other agreement, vote of stockholders or directors, or
otherwise, both as to action in Indemnitee’s official capacity and as to action
in any other capacity as a result of Indemnitee’s serving as a director of the
Company.

 

14.                               Successors. This Agreement shall be (a) binding upon all
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee. This
Agreement shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.

 

15.                               Subrogation. In the event of any payment of Indemnifiable
Amounts under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of contribution or recovery of Indemnitee
against other persons, and Indemnitee shall take, at the request of the
Company, all reasonable action necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

16.                               Change in Law. To the extent that a change in applicable law
(whether by statute or judicial decision) shall permit broader indemnification
than is provided under the terms of the by-laws of the Company and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
this Agreement shall be deemed to be amended to such extent.

 

17.                               Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement, or any clause
thereof, shall be determined by a court of competent jurisdiction to be
illegal, invalid or unenforceable, in whole or in part, such provision or
clause shall be limited or modified in its application to the minimum extent
necessary to make such provision or clause valid, legal and enforceable, and
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.

 

18.                               Indemnitee as Plaintiff. Except as provided in Section 10(c) of
this Agreement and in the next sentence, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with
respect to any Proceeding brought by Indemnitee against the Company, any Entity
which it controls, any director or officer thereof, or any third party, unless
the Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.

 

6

 

19.                               Joint and Several Liability. The obligations of the Company hereunder shall be
joint and several.

 

20.                               Modifications and Waiver. Except as provided in Section 16 above with
respect to changes in applicable law which broaden the right of Indemnitee to
be indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.

 

21.                               General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by
facsimile and receipt is acknowledged, or (c) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

 

(i)                                     If
to Indemnitee, to:

 

Wayne Bos

c/o
Natrol, Inc.

21411
Prairie Street

Chatsworth,
CA 91311

 

(ii)                                  If
to the Company, to:

 

Natrol, Inc.

21411
Prairie Street

Chatsworth,
CA 91311

Attention:  General Counsel

 

or to such other address
as may have been furnished in the same manner by any party to the others.

 

22.                               Governing Law. This Agreement shall be governed by and construed
and enforced under the laws of the State of Delaware without giving effect to
the provisions thereof relating to conflicts of law. Indemnitee shall have the
right to petition the Court of Chancery upon any failure by the Company to perform under
this Agreement.

 

23.                               Consent to Jurisdiction. The Company hereby irrevocably and unconditionally
consents to the jurisdiction of the courts of the State of Delaware and the
United States District Court in the State of Delaware. The Company hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Proceeding arising out of or relating to this Agreement in the courts of
the State of Delaware or the United States District Court in the State of
Delaware, and hereby irrevocably and unconditionally waives and agrees not to
plead or claim that any such Proceeding brought in any such court has been
brought in an inconvenient forum.

 

7

 

24.                               Agreement Governs. This Agreement is to be deemed consistent wherever
possible with relevant provisions of the Company’s by-laws and certificate of
incorporation; however, in the event of a conflict between this Agreement and
such provisions, the provisions of this Agreement shall control.

 

8

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

	
   

  	
  NATROL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elliott Balbert

  	
   

  
	
   

  	
  Name: Elliott Balbert

  
	
   

  	
  Title: Executive Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/WayneBos

  	
   

  
	
   

  	
  Wayne Bos

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