Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

AGREEMENT made as of the 25th day of April, 2006 by
and between eAcceleration Corp., a Delaware corporation (the “Company”) and
David Nason, an individual with an address at 6577 Monte Vista Place NE,
Bainbridge Island, WA 98110 (hereinafter called the “Employee”).

 

W I T N E S S E T H:

 

WHEREAS,
this Agreement is intended to supersede and replace all prior agreements,
understandings and arrangements between or among the Company and the Employee
relating to the employment of the Employee.

 

NOW,
THEREFORE, it is agreed as follows:

 

1.             Retention
of Services.  The Company hereby
retains the services of Employee, and Employee agrees to furnish such services,
upon the terms and conditions hereinafter set forth.

 

2.             Term.  Subject to earlier termination on the terms
and conditions hereinafter provided, and further subject to certain provisions
hereof which survive the term hereof, the term of this Agreement (the “Term”)
shall be comprised of a five (5) year period of employment commencing on April 25,
2006, and shall be extended thereafter for additional one-year periods unless
or until the Company or the Employee provides sixty (60) days’ notice to the
other party of the termination of this Agreement.

 

3.             Duties
and Extent of Services During Period of Employment.

 

(a)           During
the term of employment, Employee shall be employed by the Company as Chief
Technical Officer or in such other equivalent positions with the Company and
its affiliates, as may be determined by the Board of Directors of the
Company.  In such capacity, Employee
agrees that he shall devote Employee’s full time business efforts to serving
the Company and its affiliates under the direction of the Board of Directors of
the Company, shall perform all duties incident to Employee’s position on behalf
of the Company to the best of Employee’s ability and shall perform such other
duties as may from time to time be assigned to him by the Board of Directors of
the Company. 

 

(b)           The
Company and Employee agree that Employee shall perform Employee’s basic
responsibilities and duties hereunder at the office of the Company in Kitsap
County, Washington; subject, however, to the travel requirements of Employee’s
position to visit certain customers of the Company, in connection with the
Company acquiring the rights or license to market and sell certain products or
otherwise in connection with the business and investor relations of the
Company.

 

4.             Remuneration.  During the period of employment, Employee
shall be entitled to receive the following compensation for Employee’s
services:

 

1

 

(a)           The
Company shall pay to Employee a salary at the rate of $104,000 per annum,
payable in equal bi-weekly installments, or in such other manner as shall be
consistent with the Company’s payroll practices. 

 

(b)           In
addition to the salary provided in clause (a) above, not later than one
hundred ten (110) days after the end of each fiscal year of the Company, the
Company shall pay to Employee, as incentive compensation, an amount equal to
one percent (1.0%) of the Company’s Cash Flow (as defined below) for such
fiscal year. For all quarterly periods during the Term, beginning with the
first quarter of the Company’s 2006 fiscal year, the Company, not later than
sixty (60) days after the end of each such quarterly period, shall pay to
Employee an amount equal to one percent (1.0%) of the Company’s Cash Flow for
such quarterly period; provided, however, that for the fourth quarter of each
fiscal year, such amounts are required to be paid not later than one hundred
ten (110) days after the end of such quarterly period. For purposes of this
Agreement, “Cash Flow” shall mean, for the period for which the bonus is
calculated, an amount equal to the net income of the Company, before taxes,
depreciation, amortization, and extraordinary items, in each case computed in
accordance with United States generally accepted accounting principles,
consistently applied, plus (i) an amount equal to the Company’s non-cash
expenses less its non-cash gains or income (other than those removed from the
calculation of net income as set forth above), plus (ii) an amount equal
to the Company’s deferred revenues less its deferred expenses, in each case as
reflected on the Company’s statement of cash flows with respect to operating
activities.  In the event that this
Agreement is terminated other than pursuant to Section 9(a), the Employee
shall be entitled to receive the amount which would be payable under this
clause (b) for each fiscal quarter of any fiscal year in which Employee
was employed by the Company at the date of such termination.

 

5.             Employee
Benefits; Expenses.

 

(a)           During
the term of this Agreement, the Company shall provide to the Employee the right
to participate in the Company’s then existing medical and dental insurance and
other employee benefit plans and policies on the same terms as are then
generally available to the Company’s executive and managerial employees. 

 

(b)           Employee
shall be entitled to paid vacation each year during the term of this Agreement
at the rate of four (4) weeks per annum. Vacation shall be taken each year
and, if not taken, shall be carried over for one (1) year and, if not
taken during such carry-over period, shall be forfeited.  

 

(c)           The
Company shall reimburse Employee, in accordance with the practice followed from
time to time for other executive and managerial officers of the Company, for
all reasonable and necessary business and traveling expenses, and other
disbursements incurred by Employee for or on behalf of the Corporation in the
performance of Employee’s duties hereunder, upon presentation by Employee to
the Company of an appropriate accounting or documentation of such.

 

6.             Disability.  If Employee, during the period of employment,
becomes unable for any 120 days in any twelve-month period due to ill health or
other physical or mental incapacity, to perform Employee’s services hereunder,
the Company may thereafter, upon at least 100 days’ written notice to Employee,
place him on disability status.  After
such action by the Company,

 

2

 

Employee shall no longer
be entitled to receive any compensation hereunder until the Employee returns to
full-time status.

 

7.             Confidential
Information.

 

(a)           In
the course of Employee’s employment by the Company, Employee will have access
to and possession of valuable and important confidential or proprietary data or
information of the Company and its operations. 
Employee will not during Employee’s employment by the Company or at any
time for a period of five (5) years thereafter divulge or communicate to
any person nor shall Employee direct any employee, representative or agent of
the Company or its affiliates to divulge or communicate to any person or entity
(other than to a person or entity bound by confidentiality obligations similar
to those contained herein and other than as necessary in performing Employee’s
duties hereunder) or use to the detriment of the Company or for the benefit of
any other person or entity, including without limitation any competitor,
supplier, licensor, licensee or customer of the Company, any of such
confidential or proprietary data or information or make or remove any copies
thereof, whether or not marked or otherwise identified as “confidential” or “secret.”  Employee shall take all reasonable
precautions in handling the confidential or proprietary data or information
within the Company to a strict need-to-know basis and shall comply with any and
all security systems and measures adopted from time to time by the Company to
protect the confidentiality of confidential or proprietary data or information.

 

(b)           The
term “confidential or proprietary data or information” as used in this
Agreement shall mean information not generally available to the public,
including, without limitation, all database information, personnel information,
financial information, customer lists, account lists or other account
information, names, telephone numbers or addresses, supplier lists, trade
secrets, patented or proprietary information, forms, information regarding
products, operations, systems, methods, financing, services, know how, computer
and any other processed or collated data, computer programs, pricing,
marketing, media and advertising data.

 

(c)           Employee
will at all times promptly disclose to the Company in such form and manner as
the Company may reasonably require, any inventions, improvements or procedural
or methodological innovations, including without limitation relating to
programs, methods, forms, systems, services, designs, marketing ideas, products
or processes (whether or not capable of being trademarked, copyrighted or
patented) conceived or developed or created by Employee during or in connection
with Employee’s employment hereunder and which relate to the business of the
Company (“Intellectual Property”). 
Employee agrees that all such Intellectual Property shall be the sole
property of the Company.  Employee
further agrees that Employee will execute such instruments and perform such
acts as may reasonably be requested by the Company to transfer to and perfect
in the Company all legally protectable rights in such Intellectual Property.

 

(d)           In
accordance with RCW 49.44.140, any assignment of inventions required by this
Agreement does not apply to an invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was
developed entirely on the Employee’s own time, unless (a) the invention
relates (i) directly to the business of the

 

3

 

Company or (ii) to
the Company’s actual or demonstrably anticipated research or development or (b) the
invention results from any work performed by the Employee for the Company.

 

(e)           As
a matter of record Employee attaches hereto as Exhibit A a complete
list of all inventions (including patent applications and patents) relevant to
the subject matter of Employee’s engagement pursuant to this Agreement which
have been made, conceived, developed or first reduced to practice by Employee,
alone or jointly with others, prior to Employee’s engagement with Company
pursuant to this Agreement that Employee desires to remove from the operation
of this Agreement, and Employee covenants that such list is complete.  If no such list is attached to this
Agreement, Employee represents that it has no such inventions at the time of
signing this Agreement.

 

(f)            All
written materials, books, records and documents made by Employee or coming into
Employee’s possession during Employee’s employment by the Company concerning
any products, processes or equipment manufactured, used, developed,
investigated, purchased, sold or considered by the Company or otherwise
concerning the business or affairs of the Company, including without limitation
any files, customer records such as names, telephone numbers and addresses,
lists, firm records, brochures and literature, shall be the sole property of
the Company, shall not be removed from the Company’s premises by the Employee,
and upon termination of Employee’s employment by the Company, or upon request
of the Company during Employee’s employment by the Company, Employee shall
promptly deliver the same to the Company. 
In addition, upon termination of Employee’s employment by the Company,
Employee will deliver to the Company all other Company property in Employee’s
possession or under Employee’s control, including, but not limited to,
financial statements, marketing and sales data, customer and supplier lists,
account lists and other account information, database information and other
documents, and any Company credit cards.

 

(g)           The
Employee acknowledges that the covenants contained in this Section 7 are
fair and reasonable in order to protect the Company’s business and were a
material and necessary inducement for the Company to agree to the terms of this
Agreement.  The Employee further
acknowledges that any remedy at law for any breach or threatened or attempted
breach of the covenants contained in this Section 7 may be inadequate and
that the violation of any of the covenants contained in this Section 7
will cause irreparable and continuing damage to the Company. Accordingly, the
Company shall be entitled to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its rights hereunder,
including without limitation an order restraining any further violation of such
covenants, or any other relief a court might award, without the necessity of
showing any actual damage or irreparable harm or the posting of any bond or
furnishing of other security, and that such injunctive relief shall be
cumulative and in addition to any other rights or remedies to which the Company
may be entitled. The covenants in this Section 7 shall run in favor of the
Company and its successors and assigns. 
In addition, to the extent the Company is successful on the merits in
any proceeding to enforce the terms of this Section 7, the Employee agrees
to pay the Company the costs it incurs, including reasonable attorneys’ fees
and expenses, in bringing and prosecuting any such proceeding. 

 

(h)           The
provisions of this Section 7 shall survive the termination of this
Employment Agreement.

 

4

 

8.             Non-Competition.

 

(a)           During
the term of this Agreement and for one year thereafter (the “Restricted Period”),
the Employee shall not, without the written consent of the Company, directly or
indirectly,

 

(i)            become
associated with, render services to, invest in, represent, advise or otherwise
participate in as an officer, employee, director, stockholder, partner,
promoter, agent of, consultant for or otherwise, any business which is
conducted in any of the jurisdictions in which the Company’s business is
conducted and which is competitive with the business conducted by the Company;
provided, that this Section 8(a)(i) shall not prohibit the Employee
from purchasing or owning up to one percent (1%) of the outstanding capital
stock of a company which is listed or authorized for trading on any national
securities exchange, Nasdaq or the OTC Electronic Bulletin Board or is a
company with a class of securities registered under Section 12 of the
Securities Act of 1934, as amended;

 

(ii)           for
the Employee’s own account or for the account of any other person or entity (A) interfere
with the Company’s relationship with any of its suppliers, customers, accounts,
brokers, representatives or agents or (B) contact, telephone, meet,
solicit or transact any business with any material customer, account or
supplier of the Company who or which transacts or has transacted business with
the Company at any time during the term of this Agreement; or

 

(iii)          employ
or otherwise engage, or solicit, entice or induce on behalf of the Employee or
any other person or entity, the services, retention or employment of any person
who has been an employee, principal, partner, stockholder, sales
representative, trainee, consultant to or agent of the Company within one year
of the date of such offer or solicitation.

 

(b)           Nothing
herein contained shall be construed as prohibiting the Company from pursuing
any other remedies available to it for such violation, including but not
limited to any injunctive or other equitable relief or the recovery of damages
from the Employee.

 

(c)           The
Employee acknowledges that the covenants contained in this Section 8 are
fair and reasonable in order to protect the Company’s business and were a
material and necessary inducement for the Company to agree to the terms of this
Agreement.  The Employee further
acknowledges that any remedy at law for any breach or threatened or attempted
breach of the covenants contained in this Section 8 may be inadequate and
that the violation of any of the covenants contained in this Section 8
will cause irreparable and continuing damage to the Company. Accordingly, the
Company shall be entitled to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its rights hereunder,
including without limitation an order restraining any further violation of such
covenants, or any other relief a court might award, without the necessity of
showing any actual damage or irreparable harm or the posting of any bond or
furnishing of other security, and that such injunctive relief shall be
cumulative and in addition to any other rights or remedies to which the Company
may be entitled. The covenants in this Section 8 shall run in favor of the
Company and its successors and assigns. 
In addition, to the extent the Company is successful on the merits in
any proceeding to enforce the terms of this Section 8, the Employee agrees
to pay the Company the costs it incurs,

 

5

 

including reasonable
attorneys’ fees and expenses, in bringing and prosecuting any such proceeding. 

 

(d)           In
case any one or more of the terms or provisions contained in this Section 8
shall for any reason be held invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other terms or
provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification
or deletion shall not affect the validity of the other terms or provisions of
this Section 8. In addition, if any one or more of the restrictions
contained in this Section 8 shall for any reason be held to be
unreasonable with regard to time, duration, geographic scope or activity, the
parties contemplate and hereby agree that such restriction shall be modified
and shall be enforced to the full extent compatible with applicable law.  The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants
for each country, state, county and city. 
If, in any judicial proceeding, a court shall refuse to enforce all the
separate covenants deemed included in this Section 8 because, taken
together, they cover too extensive a geographic area, the parties intend that
those of such covenants (taken in order of the cities, counties, states and
countries therein which are lease populous) which if eliminated would permit
the remaining separate covenants to be enforced in such proceeding shall, for
the purpose of such proceeding, be deemed eliminated from the provisions of
this Section 8.

 

(e)           The
provisions of this Section 8 shall survive the termination of this
Employment Agreement.

 

9.             Termination.

 

(a)           The
Company may terminate the Employee’s services hereunder “for cause” by
delivering to Employee not less than ten (10) days prior to the date on
which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the
cause.  For the purposes of this
agreement, “for cause” shall mean;  (i) any
act of fraud or embezzlement which materially adversely affects the financial
or market interests of the Company or any affiliate thereof, (ii) in the
event of a conviction of the Employee for any violent felony or other serious
crime or any knowing violation of any federal or state securities law or
regulation, (iii) repeated failure to perform Employee’s duties hereunder
after notice and opportunity to cure, (iv) any material breach by the
Employee of this Agreement, or (v) the death of the Employee. 

 

(b)           If
the Company terminates Employee’s employment hereunder for any reason other
than “for cause” as set forth in Section 9(a) hereof, the Company
shall pay to the Employee compensation pursuant to Sections 4(a) and 4(b) hereof
at the time and in the manner provided for herein, and no other compensation
payable hereunder shall be payable to the Employee. If the Company terminates
Employee’s employment hereunder “for cause” as set forth in Section 9(a) hereof
or if Employee resigns voluntarily from Employee’s employment by the Company,
Employee shall be paid the compensation pursuant to Sections 4(a) and 4(b) hereof
through the date of such termination but shall not be entitled to receive any
further compensation hereunder.  Employee
and the Company acknowledge that the foregoing provisions of this paragraph 9(b) are
reasonable and are based upon the facts and circumstances of the parties at the
time of entering into this Agreement, and with due regard to future
expectations.

 

6

 

10.           Notices.  Any notice to be given to the Company
hereunder shall be deemed sufficient if addressed to the Company in writing and
delivered or mailed by certified or registered mail to it at 1050 NE Hostmark
Street, Suite 100B, Poulsbo, Washington 98730, Attention: President, or to
such other address as the Company may hereafter designate, and a copy to Joel
N. Bodansky, Hillis Clark Martin & Peterson, P.S., 500 Galland
Building, 1221 Second Avenue, Seattle, Washington  98101-2925. 
Any notice to be given to Employee hereunder shall be delivered or
mailed by certified or registered mail to him at the address set forth at the
head of this Agreement or such other address as he may hereafter designate.

 

11.           Change
of Control.

 

(a)           In
the event that at any time after any securities of the Company are publicly
traded there shall be a change in the control of the Company, as hereinafter
defined, or in any person directly or indirectly presently controlling the
Company, as hereinafter defined, Employee shall have the option, exercisable
within six (6) months of Employee’s becoming aware of such event, to
terminate Employee’s employment by the Company pursuant to this Employment
Agreement forthwith.  Upon such
termination, Employee shall have the right to immediately receive as a lump sum
payment an amount equal to three (3) times the average of the total annual
compensation paid by the Company to Employee, with respect to the five fiscal
years of the Company prior to the change of control, minus $1.00.

 

(b)           For
purposes of this Agreement, a change in control of the Company, or in any
person directly or indirectly controlling the Company, shall mean:

 

(i)            a
change in control as such term is presently defined in Regulation 240.12b-2
under the Securities Exchange Act of 1934 (“Exchange Act”); or

 

(ii)           if
any “person” (as such term is used in Section 13(d) and 14(d) of
the Exchange Act) other than the Company or any “person” who on the date of
this Agreement is a director or officer of the Company, becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) of
the voting power of the Company’s then outstanding securities, unless such
person becomes such a beneficial owner as a result of a transaction approved by
a majority of the board of directors of the Company; or

 

(iii)          if
during any period of two (2) consecutive years during the term of this
Agreement, individuals who at the beginning of such period constitute the Board
of Directors cease for any reason to constitute at least a majority thereof,
unless the election of each director who is not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors then in office who were directors at the
beginning of the period.  

 

12.           Successors
and Assigns; Third Party Beneficiaries. 
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company, and unless clearly inapplicable, all
references herein to the Company shall be deemed to include any such
successor.  In addition, this Agreement
shall be binding upon and inure to the benefit of the Employee and Employee’s
heirs, executors, legal representatives and assigns; provided, however, that
the obligations of Employee hereunder may not be delegated without the prior
written approval of the Board of Directors of the Company.  In the event of any consolidation or merger

 

7

 

of the Company into or
with any other corporation during the term of this Agreement, or the sale of
all or substantially all of the assets of the Company to another corporation,
person or entity during the term of this Agreement, such successor corporation
shall assume this Agreement and become obligated to perform all of the terms
and provisions hereof applicable to the Company, and Employee’s obligations
hereunder shall continue in favor of such successor corporation.

 

13.           Amendments.  This Agreement may not be altered, modified,
amended or terminated except by a written instrument signed by each of the
parties hereto.

 

14.           Prior
Agreements Superseded.  This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof and supersedes any other agreements, oral or written, entered
into between Employee and the Company prior to the date of this Agreement
relating thereto.

 

15.           Applicable
Law.  This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
Washington, without regard to conflicts of laws.

 

16.           Severability.  If any provision of this Agreement shall be
held by a court of competent jurisdiction to be contrary to law or public
policy, the remaining provisions shall remain in full force and effect.

 

17.           Waiver.  No term or provision hereof shall be deemed
waived and no breach consented to or excused, unless such waiver, consent or
excuse shall be in writing and signed by the party claimed to have waived,
consented or excused. A consent, waiver or excuse of any breach shall not
constitute a consent to, waiver of, or excuse of any other or subsequent breach
whether or not of the same kind of the original breach.

 

18.           Counterparts.  This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.

 

19.           Acknowledgment.  Employee acknowledges that he has carefully
read this Agreement, has had an opportunity to consult counsel regarding this
Agreement and hereby represents and warrants to the Company that Employee’s
entering into this Agreement, and the obligations and duties undertaken by
Employee hereunder, will not conflict with, constitute a breach of or otherwise
violate the terms of any other agreement to which Employee is a party and that
Employee is not required to obtain the consent of any person, firm, corporation
or other entity in order to enter into and perform Employee’s obligations under
this Agreement.

 

(signature
page follows)

 

8

 

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

 

 

	
   

  	
  eAcceleration
  Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clinton L.
  Ballard

  	
   

  
	
   

  	
   

  	
  Name: Clinton L.
  Ballard

  
	
   

  	
   

  	
  Title: President &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David Nason

  	
   

  
	
   

  	
   

  	
  David Nason

  

 

9

 

EXHIBIT A

 

	
  Patent

  	
   

  	
  Issue

  	
   

  	
   

  
	
  Number

  	
   

  	
  Date

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6892359

  	
   

  	
  5/10/2005

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6827991

  	
   

  	
  12/7/2004

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6727918

  	
   

  	
  4/27/2004

  	
   

  	
  System and
  method for software operation outside operating system control

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6717596

  	
   

  	
  4/6/2004

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6686936

  	
   

  	
  2/3/2004

  	
   

  	
  Alternate
  display content controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6678007

  	
   

  	
  1/14/2004

  	
   

  	
  Alternate
  display content controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6677964

  	
   

  	
  1/13/2004

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6661435

  	
   

  	
  12/9/2003

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6639613

  	
   

  	
  10/28/2003

  	
   

  	
  Alternate
  display content controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6630943

  	
   

  	
  10/7/2003

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6593945

  	
   

  	
  7/15/2003

  	
   

  	
  Parallel
  graphical user interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6590592

  	
   

  	
  7/8/2003

  	
   

  	
  Parallel
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6437809

  	
   

  	
  8/20/2002

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6433799

  	
   

  	
  8/13/2002

  	
   

  	
  Method and
  system for displaying data in a second display area

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6426762

  	
   

  	
  7/30/2002

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6337717

  	
   

  	
  1/8/2002

  	
   

  	
  Alternate
  display content controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6330010

  	
   

  	
  12/11/2001

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6310603

  	
   

  	
  10/30/2001

  	
   

  	
  Overscan user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 6018332

  	
   

  	
  1/25/2000

  	
   

  	
  Overscan user
  interface

  

 

 

	
  US 5731813

  	
   

  	
  3/24/1998

  	
   

  	
  Graphical user
  interface for graphically representing, organizing, and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 5349658

  	
   

  	
  9/20/1994

  	
   

  	
  Graphical user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AU 0772369

  	
   

  	
  4/22/2004

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AU 0736654

  	
   

  	
  8/2/2001

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CA 2310759

  	
   

  	
  2/3/2004

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CN 1130683

  	
   

  	
  10/12/2003

  	
   

  	
  Display method
  for controlling auxiliary user interface and corresponding display controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EP 1031127

  	
   

  	
  9/9/2005

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 222019

  	
   

  	
  10/11/2004

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 490652

  	
   

  	
  6/11/2002

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 490645

  	
   

  	
  6/11/2002

  	
   

  	
  Alternate
  display content controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US 5349658

  	
   

  	
  9/20/1994

  	
   

  	
  Graphical user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AU 0772369

  	
   

  	
  4/22/2004

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AU 0736654

  	
   

  	
  8/2/2001

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CA 2310759

  	
   

  	
  2/3/2004

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CN 1130683

  	
   

  	
  10/12/2003

  	
   

  	
  Display method
  for controlling auxiliary user interface and corresponding display controller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EP 1031127

  	
   

  	
  9/9/2005

  	
   

  	
  Secondary user
  interface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 222019

  	
   

  	
  10/11/2004

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 490652

  	
   

  	
  6/11/2002

  	
   

  	
  Method and
  system for controlling a complementary user interface on a display surface

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TW 490645

  	
   

  	
  6/11/2002

  	
   

  	
  Alternate display
  content controller

  

 

 

	
   

  	
  eAcceleration
  Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clinton L.
  Ballard

  	
   

  
	
   

  	
   

  	
  Name: Clinton L.
  Ballard

  
	
   

  	
   

  	
  Title: President &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David Nason

  	
   

  
	
   

  	
   

  	
  David NasonExhibit 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:  225434AU3

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL AMOUNT: $ 258,000

  
	
  NO. 1 

  	
   

  

 

CREDIT SUISSE
(USA), INC.

Reverse Convertible Securities Linked to the Performance of Monsanto Co.

due April 27, 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 8.25% per annum on the
principal amount from April 28, 2006. The coupon payment will be payable
quarterly in arrears on July 31, 2006, October 31, 2006, January 31, 2007, and
April 27, 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/ Grace Koo

  	
   

  
	
   

  	
   

  	
  Name: Grace Koo

  
	
   

  	
   

  	
  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: April 28, 2006

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE, N.A.,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Ignazio Tamburello

  	
   

  
	
   

  	
   

  	
    Name: Ignazio
  Tamburello

  
	
   

  	
   

  	
    Title:  Authorized
  Signatory

  

 

F-2

 

[REVERSE OF NOTE]

 

CREDIT SUISSE
(USA), INC.

Reverse Convertible Securities Linked to the Performance of Monsanto Co.

due April 27, 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
Monsanto Co., due April 27, 2007 (the “Note”).

 

A coupon will be payable on this Note of
8.25% per annum on the principal amount from April 28, 2006. The coupon payment
will be payable quarterly in arrears on July 31, 2006, October 31, 2006,
January 31, 2007, and April 27, 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 $1,000 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 April 27, 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
April 27, 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 April 25, 2006, which is the initial setting
date, to and including April 23, 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 April 25, 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.

 

(4)          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 $86.52.

 

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:

 

	
  adjusted
  initial share price = initial share price X

  	
  prior physical delivery amount

  	
   

  
	
  adjusted physical delivery amount

  	
   

  

 

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-13

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