Document:

EXHIBIT
10.1

OFFICE LEASE AGREEMENT

 

CATALYTICA
ENERGY SYSTEMS, INC.

WARNER COURTYARDS

301 WEST WARNER RD.

SUITE # 132

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE  
  1.

  	
   

  	
  SUMMARY AND DEFINITION OF CERTAIN LEASE
  PROVISIONS AND EXHIBITS

  	
   

  	
  1

  	
   

  
	
  ARTICLE  
  2.

  	
   

  	
  PREMISES/RIGHT TO USE COMMON AREAS

  	
   

  	
  1

  	
   

  
	
  ARTICLE  
  3.

  	
   

  	
  TERM

  	
   

  	
  2

  	
   

  
	
  ARTICLE  
  4.

  	
   

  	
  MINIMUM MONTHLY RENT

  	
   

  	
  2

  	
   

  
	
  ARTICLE  
  5.

  	
   

  	
  ADDITIONAL RENT/EXPENSE STOP

  	
   

  	
  2

  	
   

  
	
  ARTICLE  
  6.

  	
   

  	
  PARKING

  	
   

  	
  2

  	
   

  
	
  ARTICLE  
  7.

  	
   

  	
  RENT TAX AND PERSONAL PROPERTY TAXES

  	
   

  	
  3

  	
   

  
	
  ARTICLE  
  8.

  	
   

  	
  PAYMENT OF RENT/LATE CHARGES

  	
   

  	
  3

  	
   

  
	
  ARTICLE  
  9.

  	
   

  	
  SECURITY DEPOSIT

  	
   

  	
  3

  	
   

  
	
  ARTICLE 10.

  	
   

  	
  CONSTRUCTION OF THE PREMISES

  	
   

  	
  3

  	
   

  
	
  ARTICLE 11.

  	
   

  	
  ALTERATIONS

  	
   

  	
  3

  	
   

  
	
  ARTICLE 12.

  	
   

  	
  PERSONAL PROPERTY/SURRENDER OF PREMISES

  	
   

  	
  3

  	
   

  
	
  ARTICLE 13.

  	
   

  	
  LIENS

  	
   

  	
  3

  	
   

  
	
  ARTICLE 14.

  	
   

  	
  USE OF PREMISES/RULES AND REGULATIONS

  	
   

  	
  3

  	
   

  
	
  ARTICLE 15.

  	
   

  	
  RIGHTS RESERVED BY LANDLORD

  	
   

  	
  4

  	
   

  
	
  ARTICLE 16.

  	
   

  	
  QUIET ENJOYMENT

  	
   

  	
  4

  	
   

  
	
  ARTICLE 17.

  	
   

  	
  MAINTENANCE AND REPAIR

  	
   

  	
  4

  	
   

  
	
  ARTICLE 18.

  	
   

  	
  UTILITIES AND JANITORIAL SERVICES

  	
   

  	
  4

  	
   

  
	
  ARTICLE 19.

  	
   

  	
  ENTRY AND INSPECTION

  	
   

  	
  4

  	
   

  
	
  ARTICLE 20.

  	
   

  	
  ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE

  	
   

  	
  4

  	
   

  
	
  ARTICLE 21.

  	
   

  	
  CASUALTY INSURANCE

  	
   

  	
  5

  	
   

  
	
  ARTICLE 22.

  	
   

  	
  DAMAGE AND DESTRUCTION OF PREMISES

  	
   

  	
  5

  	
   

  
	
  ARTICLE 23.

  	
   

  	
  EMINENT DOMAIN

  	
   

  	
  5

  	
   

  
	
  ARTICLE 24.

  	
   

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  	
  5

  	
   

  
	
  ARTICLE 25.

  	
   

  	
  SALE OF PREMISES BY LANDLORD

  	
   

  	
  5

  	
   

  
	
  ARTICLE 26.

  	
   

  	
  SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT

  	
   

  	
  5

  	
   

  
	
  ARTICLE 27.

  	
   

  	
  LANDLORD’S DEFAULT AND RIGHT TO CURE

  	
   

  	
  6

  	
   

  
	
  ARTICLE 28.

  	
   

  	
  ESTOPPEL CERTIFICATES

  	
   

  	
  6

  	
   

  
	
  ARTICLE 29.

  	
   

  	
  TENANT’S DEFAULT AND LANDLORD’S REMEDIES

  	
   

  	
  6

  	
   

  
	
  ARTICLE 30.

  	
   

  	
  TENANT’S RECOURSE

  	
   

  	
  6

  	
   

  
	
  ARTICLE 31.

  	
   

  	
  HOLDING OVER

  	
   

  	
  6

  	
   

  
	
  ARTICLE 32.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  	
  6

  	
   

  
	
  ARTICLE 33.

  	
   

  	
  NOTICES

  	
   

  	
  7

  	
   

  
	
  ARTICLE 34.

  	
   

  	
  BROKER’S COMMISSIONS

  	
   

  	
  7

  	
   

  
	
  ARTICLE 35.

  	
   

  	
  INDEMNIFICATION/WAIVER OF SUBROGATION

  	
   

  	
  7

  	
   

  
	
  ARTICLE 36.

  	
   

  	
  ADDENDUM

  	
   

  	
  ADDENDUM-1

  	
   

  

 

	
  EXHIBITS:

  	
   

  	
   

  
	
  (A)

  	
   

  	
  PREMISES

  
	
  (B)

  	
   

  	
  RULES AND REGULATIONS

  
	
  (C)

  	
   

  	
  PARKING RULES AND REGULATIONS

  

 

Landlord:    CH

Tenant:     RZ

 

 

OFFICE LEASE
AGREEMENT

CATALYTICA ENERGY SYSTEMS, INC.

THIS
OFFICE LEASE AGREEMENT, dated August 28, 2006 is made and
entered into by WARNER COURTYARDS, LLC, an Arizona Limited
Liability Company, PARK 3020, LLC, an Arizona Limited Liability Company,  PARK 3030, LLC, an Arizona Limited Liability
Company, and METZGER WARNER COURTYARDS, LLC, a Delaware Limited Liability Company,
(Collectively the “Landlord”) and CATALYTICA ENERGY SYSTEMS,
INC., a Delaware Corporation (the “Tenant”).  In consideration of the mutual promises and
representations set forth in this Lease, Landlord and Tenant agree as follows:

ARTICLE
1.  SUMMARY AND DEFINITION OF CERTAIN
LEASE PROVISIONS AND EXHIBITS

1.1                               The
following terms and provisions of this Lease, as modified by other terms and
provisions hereof, are included in this Section 1.1 for summary and
definitional purposes only.  If there is
any conflict or inconsistency between any term or provision in this Section
1.1 and any other term or provision of this Lease, the other term or
provision of this Lease shall control:

	
  (a)

  	
   

  	
  Landlord:

  	
   

  	
  Warner Courtyards, LLC

  
	
   

  	
   

  	
   

  	
   

  	
  Park 3020, LLC

  
	
   

  	
   

  	
   

  	
   

  	
  Park 3030, LLC

  
	
   

  	
   

  	
   

  	
   

  	
  Metzger Warner Courtyards, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Address of Landlord for Notices:

  	
   

  	
  c/o Hannay Investment Properties, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  2999 N. 44th Street

  
	
   

  	
   

  	
   

  	
   

  	
  Suite 400

  
	
   

  	
   

  	
   

  	
   

  	
  Phoenix, Arizona  
  85018

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Tenant:

  	
   

  	
  Catalytica Energy Systems, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Address of Tenant for Notices:

  	
   

  	
  Catalytica Energy Systems, Inc.

  
	
   

  	
   

  	
  (Include Main/Hdq. Address)

  	
   

  	
  301 West Warner Rd. 
  Suite # 132

  
	
   

  	
   

  	
   

  	
   

  	
  Tempe, Arizona 85284

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Lease Term: September 15, 2006, through
  September 30, 2007, as further defined in Article 3.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Building:  The office building known as WARNER COURTYARDS, located at 301 West Warner Rd., Tempe,
  Arizona   85284  (the “Building”).

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Premises:  Suite 132 on the first floor of the
  Building, as shown on Exhibit  A,
  consisting of approximately 1,893 Rentable Square Feet.

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Minimum Monthly Rent: $1,971.88
  plus applicable sales tax for September 15, 2006 through September 30, 2006. $3,943.75 plus applicable sales tax for each
  full calendar month commencing on October 1, 2006 through September 30, 2007.

  
	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Tenant’s Base Share: (see Article
  5).

  
	
   

  	
   

  	
   

  
	
  (j)

  	
   

  	
  Intentionally Deleted.

  
	
   

  	
   

  	
   

  
	
  (k)

  	
   

  	
  Security Deposit:  A Security Deposit of $3,800.00 is required
  at the time the Lease is signed by Tenant.

  
	
   

  	
   

  	
   

  
	
  (l)

  	
   

  	
  Parking:  Two (2) covered reserved spaces at $30 each
  per month.  Uncovered, unreserved
  spaces in the project shall be available at no charge.  The overall parking ratio of the project is
  six (6) spaces per 1000 square feet of rentable area.

  
	
   

  	
   

  	
   

  
	
  (m)

  	
   

  	
  Building Hours: 7:00 am to 6:00
  p.m. Monday through Friday; 7:00 am to 12:00 p.m. Saturday.   Closed Sundays and all legal
  holidays.  Tenant shall have
  twenty-four (24) hour, seven (7) day a week access to the Premises.

  

 

1.2                               The
following exhibits (the “Exhibits”) and addenda are attached hereto and
incorporated herein by this reference:

	
  Exhibit A

  	
   

  	
  Premises

  
	
  Exhibit B

  	
   

  	
  Building Rules and Regulations

  
	
  Exhibit C

  	
   

  	
  Parking Rules and Regulations

  
	
  Addendum to
  Office Lease Agreement (the “Addendum”), dated of even date herewith.

  
	
  The Office Lease
  Agreement, the Addendum, and the Exhibits are collectively referred to herein
  as the “Lease.”

  

 

ARTICLE 2. 
PREMISES/RIGHT TO USE COMMON AREAS

2.1                               Landlord
leases to Tenant and Tenant leases from Landlord the Premises, for and subject
to the terms and provisions set forth in this Lease.  This Lease is subject to all liens,
encumbrances, parking and access easements, restrictions, covenants, and all
other matters of record, the Rules and Regulations described in Article 14
and the Parking Rules and Regulations described in Article 6.  Tenant and Tenant’s agents, contractors,
customers, directors, employees, invitees, officers, and patrons (collectively,
the “Tenant’s Permittees”) have a non-exclusive privilege and license, during
the Lease Term, to use the non-restricted Common Areas in common with all other
authorized users thereof.

Landlord:    CH

Tenant:     RZ

 1
 

 

2.2                               For
purposes of this Lease, the following terms have the definitions set forth
below:

(a)                                  “Automobile
Parking Areas” means all areas designated for automobile parking upon the
Land.  Automobile Parking Areas are
Common Areas, but certain parking areas are restricted.  (See Parking Rules & Regulations).

(b)                                  “Common
Areas” means those areas within the Building and Land not leased to any tenant
and which are intended by Landlord to be available for the use, benefit, and
enjoyment of all occupants of the Building.

(c)                                  “Interior
Common Facilities” means lobbies, corridors, hallways, elevator foyers,
restrooms, mail rooms, mechanical and electrical rooms, janitor closets, and
other similar facilities used by tenants or for the benefit of tenants on a
non-exclusive basis.  Access to certain
Interior Common Facilities is restricted.

(d)                                  “Land,”
means the parcel of land containing the Building;

(e)                                  “Load
Factor” means the quotient of the Rentable Square Footage of the Building
divided by the aggregate Usable Square Footage of all premises and occupiable
space in the Building, and is subject to change from time to time.

(f)                                    “Rentable
Square Footage” means (1) with respect to the Building, the sum of the total
area of all floors in the Building (including Interior Common Facilities but
excluding stairs, elevator shafts, vertical shafts, parking areas and exterior
balconies), computed by measuring to the exterior surface of permanent outside
walls; and (2) with respect to the Premises, the Usable Square Footage of the
Premises multiplied by the Load Factor.

(g)                                 “Usable
Square Footage” means the area of the Premises (or other space occupiable by
tenants as the case may be) computed by measuring to the exterior surface of
permanent outside walls, to the midpoint of corridor and demising walls and to
the Tenant side of permanent interior walls and Interior Common Facilities
walls (other than corridor walls).

ARTICLE 3.  TERM

The term of this Lease
shall be Twelve (12) months, plus the remainder of any partial calendar month
in which the Lease Term commences, commencing on September 15, 2006, the
Commencement Date, and expiring September 30, 2007.

ARTICLE 4. 
MINIMUM MONTHLY RENT

Tenant shall pay to
Landlord, without deduction, setoff, prior notice, or demand, the Minimum
Monthly Rent, payable in advance on the first day of each calendar month during
the Lease Term.  If the Lease Term
commences on a date other than the first day of a calendar month, the Minimum
Monthly Rent for that month shall be prorated on a per diem basis and be paid
to Landlord on or before the Commencement Date.

ARTICLE 5. 
Intentionally Deleted.

ARTICLE 6. 
PARKING

Nothing contained
herein shall be deemed to create liability upon Landlord for any damage to
motor vehicles of Tenant’s Permittees, or from loss of property from within
such motor vehicles while parked in the Automobile Parking Areas.  Landlord has the right to establish and to
enforce against all users of the Automobile Parking Areas, reasonable rules and
regulations (the “Parking Rules and Regulations).  Landlord shall assign and identify Reserved
Parking Spaces.  Landlord will not police
nor be responsible for any vehicle parked in Tenant’s reserved parking space.

Landlord:    CH

Tenant:     RZ

 2
 

 

ARTICLE 7.  RENT
TAX AND PERSONAL PROPERTY TAXES

Tenant shall pay to
Landlord, in addition to, and simultaneously with, any other amounts payable to
Landlord under this Lease, a sum equal to the aggregate of any municipal,
county, state, or federal excise, sales, use, or trans­action privilege taxes
now or hereafter legally levied or imposed against, or on account of, any
amounts payable under this Lease by Tenant or the receipt thereof by
Landlord.  Tenant shall pay, prior to
delinquency, all taxes levied upon fixtures, furnishings, equipment, and
personal property placed on the Premises by Tenant.

ARTICLE 8. 
PAYMENT OF RENT/LATE CHARGES

Tenant shall pay the rent
and all other charges specified in this Lease to Landlord at the address set
forth on Section 1.1(b) of this Lease, or to another person and at another
address as Landlord from time to time designates in writing.  Minimum Monthly Rent, additional rent, or
other charges payable by Tenant to Landlord under the terms of this Lease not
received within ten (10) days after the due date (the “Delinquency Date”)
thereof shall automatically (and without notice) incur a late charge of five
percent (5%) of the delinquent amount.

ARTICLE 9. 
SECURITY DEPOSIT

Tenant shall, upon
execution of this Lease, deposit with Landlord the Security Deposit, as
security for the performance of terms and provisions of this Lease by Tenant,
which shall be returned to Tenant at the termination of the Lease if it has
discharged its obligations to Landlord in full. 
The Security Deposit shall not be used to pay the last month’s lease
payment.

ARTICLE 10. 
Intentionally Deleted.

ARTICLE 11. 
ALTERATIONS

Tenant shall not make or
cause to be made any further additions to, or alterations of, the Premises or
any part thereof without the prior written consent of Landlord, which consent
shall not be unreasonably withheld.  
Tenant shall be allowed to install a card access or security system in
accordance with the Building Guidelines.

ARTICLE 12. 
PERSONAL PROPERTY/SURRENDER OF PREMISES

All personal property
located in the Premises shall remain the property of Tenant and may be removed
by Tenant not later than the Expiration Date or the earlier termination of the
Lease Term.  Tenant shall promptly
repair, at its own expense, any damage resulting from such removal.  All cabinetry, built-in appliances, wall
coverings, floor coverings, window coverings, electrical fixtures, plumbing
fixtures, conduits, lighting, and other special fixtures that may be placed
upon, installed in, or attached to the Premises by Tenant shall, at the
termination of this Lease be the property of Landlord.  At the Expiration Date or upon the earlier
termi­nation of the Lease Term, Tenant shall surrender the Premises in good
condition, reason­able wear and tear excepted, and shall deliver all keys to
Landlord.

ARTICLE 13. 
LIENS

Tenant shall keep the Premises,
Building, and the Land free from any liens arising out of work performed,
material furnished, or obligations incurred due to the actions of Tenant or
Tenant’s Permittees or the failure of Tenant to comply with any law.  In the event any such lien does attach
against the Premises, Building, or Land, and Tenant does not discharge the lien
or post bond (which under law would prevent foreclosure or execution under the
lien) within ten (10) days after demand by Landlord, such event shall be a
default by Tenant under this Lease and, in addition to Landlord’s other rights
and remedies, Landlord may take any action necessary to discharge the lien.

ARTICLE 14.  USE
OF PREMISES/RULES AND REGULATIONS

14.1                        Without
the prior approval of Landlord, Tenant shall not use the Premises for any use
other than for general business office purposes and Tenant agrees that it will
use the Premises in such manner as to not interfere with or infringe on the
rights of other tenants in the Building. 
Tenant agrees to comply with all applicable laws, ordinances and
regulations in connection with its use of the Premises, agrees to keep the
Premises in a clean and sanitary condition, and agrees not to perform any act
in the Building which would increase any insurance premiums related to the
Building or would cause the cancellation of any insurance policies related to
the Building.

Tenant shall not
use, generate, manufacture, store, or dispose of, in, under, or about the
Premises, the Building, the Land, or the Project or transport to or from the
Premises, the Building, the Land, or the Project, any Hazardous Materials.  For purposes of this Lease, “Hazardous
Materials” includes, but is not limited to: 
(i) flammable, explosive, or radioactive materials, hazardous wastes,
toxic substances, or related materials; (ii) all substances defined as “hazardous
substances,” “hazardous materials,” “toxic substances,” or “hazardous chemical
substances or mixtures” in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et
seq., as amended by Superfund Amendments and Re-authorization Act of 1986; the
Hazardous Materials Transportation Act, 49 U.S.C. § 1901, et seq.; the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601, et seq.; (iii) those substances
listed in the United States Department of Transportation Table (49 CFR 172.10
and amendments thereto) or by the Environmental Protection Agency (or any
successor agent) as hazardous substances (40 CFR Part 302 and amendments
thereto); (iv) any material, waste, or substance which is (A) petroleum, (B)
asbestos, (C) polychlorinated biphenyl’s, (D) designated as a “hazardous
substance” pursuant to § 311 of the Clean Water Act, 33 U.S.C. S 1251 et seq.
(33 U.S.C. § 1321) or listed pursuant to the Clean Water Act (33 U.S.C. §
1317); (E) flammable explosives; or (F) radioactive materials; and (v) all
substances defined as “hazardous wastes” in Arizona Revised Statutes
§ 36-3501 (16).

 

Landlord:    CH

Tenant:     RZ

 3
 

 

Notwithstanding the foregoing, Tenant may use and
store reasonable amounts of substances normally associated with general office
duties (such as copier toner, cleaning supplies, glue and other materials)
which are specifically approved in advance by Landlord

ARTICLE
15.  RIGHTS RESERVED BY LANDLORD

In addition to all other rights, Landlord has the
following rights, exercisable without notice to Tenant and without effecting an
eviction, constructive or actual, and without giving right to any claim for set
off or abatement of rent:  (a) to
decorate and to make repairs, alterations, additions, changes, or improvements
in and about the Building during Building Hours (b) to approve the weight, size,
and location of heavy objects in and about the Premises and the Building, and
to require all such items to be moved into and out of the Building and Premises
in such manner as Landlord shall direct in writing;  (c) to prohibit the placing of vending
machines in or about the Premises without the prior written consent of
Landlord; (d) to take all such reasonable measures for the security of the
Building and its occupants; and (e) to temporarily block off parking spaces for
maintenance or construction purposes.

ARTICLE 16.  QUIET ENJOYMENT

Landlord agrees that, provided a default by Tenant has
not occurred, Landlord will do nothing that will prevent Tenant from quietly
enjoying and occupying the Premises during the Lease Term.  Tenant agrees this Lease is subordinate to
the Rules and Regulations described in Article 14, and the Parking Rules
and Regulations described in Article 6.

ARTICLE 17.  MAINTENANCE AND REPAIR

Landlord shall maintain the Premises and Building in
good condition and repair, reasonable wear and tear excepted.  Tenant waives all rights to make repairs at
the expense of Landlord.  If Landlord
would be required to perform any maintenance or make any repairs because
of:  (a) modifications to the roof, walls,
foundation, and floor of the Building from that set forth in Landlord’s plans
and specifications which are required by Tenant’s design for improvements,
alterations and additions; (b) installation of Tenant’s improvements, fixtures,
or equipment; (c) a negligent or wrongful act of Tenant or Tenant’s Permittees;
or, (d) Tenant’s failure to perform any of Tenant’s obligations under this
Lease, Landlord may perform the maintenance or repairs and Tenant shall pay
Landlord the cost thereof.  Tenant agrees
to: (a) Pay Landlord’s cost of maintenance and repair, including additional janitorial
costs of any Non-­Building Standard Improvements and Non-Building Standard
materials and finishes and (b) Repair or replace all ceiling and wall finishes
(including painting) and floor or window coverings which require repair or
replacement during the Lease Term, at Tenant’s sole cost.  Notwithstanding anything in this Lease to the
contrary, to the extent the terms and provisions of Article 22 conflict
with, or are inconsistent with, the terms and provisions of this Article 17,
the terms and provisions of Article 22 shall control.  Tenant shall take all reasonable precautions
to insure that the Premises are not subjected to excessive wear and tear, i.e.
chair pads should be utilized by Tenant to protect carpeting.  Tenant shall be responsible for touch-up
painting in the Premises throughout the Lease term.

ARTICLE 18.  UTILITIES AND JANITORIAL SERVICES

Landlord agrees to furnish to the Premises during
normal Building Hours as defined in Article 1.1 (m), (the “Building Hours”),
and subject to the Rules and Regulations, electricity suitable for the intended
use of the Premises, heat and air conditioning required in Landlord’s judgment
for normal use and occupation of the Premises, and janitorial services for the
Premises and Common Areas.  Landlord
further agrees to furnish hot and cold water to those areas provided for
general use of all tenants in the Building. 
Landlord will use diligent efforts to provide continuous elevator
service for the Building.  If Tenant
shall require electric current, water, heating, cooling, or air which will
result in excess consumption of such utilities or services, Tenant shall first
obtain the written consent of Landlord to the use thereof.  If, in Landlord’s reasonable discretion,
Tenant consumes any utilities or services in excess of the normal consumption
of such utilities and services for general office use, Tenant agrees to pay
Landlord for the cost of such excess consumption of utilities or services,
currently at the rate of $.0026 per square foot, per hour, upon receipt of a
statement of such costs from Landlord at the same time as payment of the
Minimum Monthly Rent is made.  Landlord
may install separate electrical meters to, at Tenant’s expense, to measure
excess consumption or establish another basis for determining the amount of
excess consumption of electrical current. 
Further, Landlord has installed electronic HVAC over-time hour meters
for Tenant’s convenience.  These meters
shall be used, in part, by Landlord to determine Tenant’s excess HVAC
consumption for purposes of billing Tenant for such excess charges.  Landlord shall not be liable for damages nor
shall rent or other charges abate in the event of any failure or interrup­tion
of any utility or service supplied to the Premises or Building by a regulated utility
or municipality, or any failure of a Building system supplying any such service
to the Premises (provided Landlord uses diligent efforts to repair or restore
the same) and no such failure or interruption shall entitle Tenant to abate
rent or terminate this Lease. Overtime HVAC
charges shall be billed to Tenant at the rate of $.0026 per hour, per square
foot.

ARTICLE 19.  ENTRY AND INSPECTION

Landlord shall have the right to enter into the
Premises at reasonable times for the purpose of inspecting the Premises and
reserves the right, during the last three months of the term of the Lease, to
show the Premises with reasonable prior notice at reasonable times to
prospective tenants.  Landlord shall be
permitted to take any action under this Article without causing any abatement
of rent or liability to Tenant for any loss of occupation or quiet enjoyment of
the Premises, nor shall such action by Landlord be deemed an actual or
constructive eviction.

ARTICLE 20.  ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE

20.1                           All
personal property and fixtures belonging to Tenant shall be placed and remain
on the Premises at Tenant’s sole risk. 
Upon taking possession of the Premises and there­after during the Lease
Term, the Tenant shall, at Tenant’s sole cost and expense, maintain insurance
coverage with limits not less than the following:  (a) Worker’s Compensation Insurance, minimum
limit as defined by applicable laws; (b) Employer’s Liability Insurance,
minimum limit $1,000,000; (c) Commercial General Liability Insurance, Bodily
Injury/Property, Damage 

 

Landlord:    CH

Tenant:     RZ

 4
 

 

Insurance
(including the following coverages:  Premises/Operations, Independent Contractors,
Broad Form Contractual in support of the indemnification obligations of Tenant
under this Lease, and Bodily and Personal Injury Liability), minimum combined
single limit $1,000,000; (d) Automobile Liability Insurance, minimum limit
$1,000,000.  All such policies shall
include a waiver of subrogation in favor of Landlord and shall name Landlord and
such other party or parties as Landlord may require as additional
insureds.  Tenant’s insurance shall be
primary, with any insurance maintained by Landlord to be considered
excess.  Tenant’s insurance shall be
maintained with an insurance company qualified to do business in the State of
Arizona and having a current A.M. Best manual rating of at least A-X or
better.  Before entry into the Premises
and before expiration of any policy, evidence of these coverage’s represented
by Certificates of Insurance issued by the insurance carrier must be furnished
to Landlord.  Certificates of Insurance
should specify the additional insured status, the waiver of subrogation, and
that such insurance is primary, and any insurance by Landlord is excess.  The Certificate of Insurance shall state that
Landlord will be notified in writing thirty (30) days before cancellation,
material change, or renewal of insurance.

20.2                        During
the entire Lease Term, Landlord agrees to maintain public liability insurance
in such forms and amounts as Landlord shall determine.

 

ARTICLE 21.  CASUALTY INSURANCE

21.1                        Tenant
shall maintain fire and extended coverage insurance (full replacement value)
with a business interruption and extra expense endorsements, on personal
property and trade fixtures owned or used by Tenant.

21.2                        Landlord
shall maintain fire and full extended coverage insurance (“all risk”) including
necessary endorsements throughout the Lease Term on the Building (excluding
Tenant’s trade fixtures and personal property).   At Landlord’s option, the policy of
insurance may include a business interruption insurance endorsement for loss of
rents.  The cost of the insurance
obtained under this Section 21.2 shall be an Operating Cost under Article
5 of this Lease.

ARTICLE 22.  DAMAGE AND DESTRUCTION OF PREMISES

In the event of fire or other casualty damage to the
Premises during the Lease Term which requires repairs to the Premises, Landlord
shall commence to make said repairs within 
ninety (90) days after written notice by Tenant of the necessity
therefor and diligently proceed therewith to completion.  The Minimum Monthly Rent shall be
proportionately reduced while such repairs are being made, based upon the
extent to which the making of such repairs shall interfere with the business
carried on by Tenant in the Premises. 
Landlord shall have no obligation to repair, restore, or replace Tenant’s
trade fixtures or personal property and Tenant shall be solely responsible
therefor.  Notwithstanding the above, if
(a) during the last year of the Lease Term the Premises or the Building is
damaged as a result of fire or any other insured casualty, or (b) the Premises
are damaged to the extent of twenty-five percent (25%) or more of the
replacement value of the Premises, or (c) the Premises or the Building is
damaged or destroyed as a result of a casualty not insured against, or (d) the
Building shall be damaged or destroyed by fire or other cause to the extent of
twenty percent (20%) or more of the Building’s replacement value, then Landlord
shall have the right, to be exercised by notice in writing to Tenant given
within ninety (90) days after said occurrence, to terminate this Lease.  Tenant waives any statutory or other right
Tenant may have to cancel this Lease as a result of such destruction and no
such destruction shall annul or void this Lease.  The provisions of this Article shall
supersede the obligations of Landlord to make repairs under Article 17
of the Lease.  Notwithstanding the
provisions of this Article 22, if the Premises or any other portion of
the Building are damaged by fire or other casualty resulting from the negligent
act or omission or willful misconduct of Tenant or Tenant’s Permittees, Minimum
Monthly Rent shall not be reduced during the repair of the damage, and Tenant
shall be liable to Landlord for the cost and expense of the repair and
restoration of the Premises or the Building caused thereby to the extent that
cost and expense is not covered by insurance proceeds.

ARTICLE 23.  EMINENT DOMAIN

In the event any portion of the Premises is taken from
Tenant under eminent domain proceedings, Tenant shall have no right, title or
interest in any award made for such taking, except for any separate award for
fixtures and improvements installed by Tenant.

ARTICLE 24.  ASSIGNMENT AND SUBLETTING

Tenant agrees not to assign this Lease, and shall not
sublet the Premises without Landlord’s prior written consent, which consent
shall not be unreasonably withheld as long as the use and density does not
change.  Any assignment or subletting hereunder
shall not release or discharge Tenant of or from any liability under this
Lease, and Tenant shall continue to be fully liable thereunder.  Consent by Landlord to one assignment,
subletting, occupation, or use by another person shall not be deemed to be
consent to any subsequent assignment, subletting, occupa­tion, or use by
another person.  If Tenant is a
corporation, an unincorporated association or a partnership, unless listed on a
national stock exchange, the transfer, assignment or hypothecation of any stock
or interest in such corporation, association or partnership in the aggregate in
excess of fifty percent (50%) shall be deemed an assignment of this Lease.  Tenant agrees to immediately notify Landlord
of any change in its ownership.

ARTICLE 25.  SALE OF PREMISES BY LANDLORD

In the event of any sale of the Building or the
property upon which the Building is located or any assignment of this Lease by
Landlord (or a successor in title), if the assignee or purchaser assumes
the obligations of Landlord herein in writing, Landlord (or such successor)
shall automatically be entirely freed and relieved of all liability under any
and all of Landlord’s covenants and obligations contained in this Lease or
arising out of any act, occurrence, or omission occurring after such sale or
assignment; and the assignee or purchaser shall be deemed, without any further
agree­ment between the parties, to have assumed and agreed to carry out any and
all of the covenants and obligations of Landlord under this Lease, and shall be
substituted as Landlord for all purposes from and after the sale or assignment.

ARTICLE
26. 
SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT

Tenant’s interest under this Lease is subordinate to
all terms of and all liens and interests arising under any ground lease, deed
of trust, or

Landlord:    CH

Tenant:     RZ

 5
 

 

 

mortgage now or hereafter placed on the Land­lord’s
interest in the Premises, the Building, or the Land.  Tenant consents to an assignment of Landlord’s
interest in this Lease to Landlord’s lender as required under such
financing.  If the Premises or the
Building is sold as a result of a default under the mortgage, or pursuant to a
transfer in lieu of foreclosure, Tenant shall, at the mortgagee’s, purchaser’s
or ground lessor’s sole election, attorn to the mortgagee or purchaser.  This Article is self-operative.  However, Tenant agrees to execute and
deliver, if Landlord, any  deed of trust
holder,  mortgagee, or purchaser should
so request, such further instruments necessary to subordinate this Lease to a
lien of any mortgage or deed of trust, to acknowledge the consent to assignment
and to affirm the ATTORNMENT provisions set forth herein.

ARTICLE 27.  LANDLORD’S DEFAULT AND RIGHT TO CURE

In the event of default here­under by Landlord, Tenant
agrees, before exercising any right or remedy available to it, to give Landlord
written notice of the claimed default. 
For the thirty (30) days following such notice (or such longer period of
time as may be reasonably required to cure a matter which, due to its nature,
cannot reasonably be remedied within thirty (30) days), Landlord shall have the
right to cure the default involved.

ARTICLE 28.  ESTOPPEL CERTIFICATES

Tenant agrees at any time and from time to time upon
request by Landlord, to execute, acknowledge, and deliver to Landlord, within
ten (10) calendar days after demand by Landlord, a statement in writing
certifying (a) that this Lease is unmodified and in full force and effect (or
if there have been modifications, that the same is in full force and effect as
modified and stating such modifications), (b) the dates to which the Minimum
Monthly Rent and other rent and charges have been paid in advance, if any, (c)
Tenant’s acceptance and possession of the Premises, (d) the commence­ment of the
Lease Term, (e) the rent provided under the Lease, (f) that Landlord is not in
default under this Lease (or if Tenant claims such default, the nature
thereof), (g) that Tenant claims no offsets against the rent, and (h) such
other information as may be requested with respect to the provisions of this
Lease or the tenancy created by this Lease. Tenant’s failure to deliver such
statement within such time shall be conclusive upon Tenant (i) that this Lease
is in full force and effect, without modification except as may be represented
by Landlord, (ii) that there are no uncured defaults in Landlord’s performance,
and (iii) that not more than one month’s rent has been paid in advance.

ARTICLE 29.  TENANT’S DEFAULT AND LANDLORD’S REMEDIES

In the event Tenant fails to keep and perform any of
the terms or conditions of this Lease, including the Rules and Regulations and
the Parking Rules and Regulations (but excluding the payment of rental), and
such failure continues for thirty (30) days after written notice of default
from Landlord or in the event Tenant fails to pay any rental due hereunder,
time being of the essence, Landlord may resort to any and all legal remedies or
combination of remedies which Landlord may desire to assert including but not
limited to one or more of the following: 
(1) lock the doors to the Premises and exclude Tenant therefrom, (2)
retain or take possession of any property on the Premises pursuant to Landlord’s
lien, (3) enter the Premises and remove all persons and property therefrom, (4)
declare the Lease canceled and terminated, (5) sue for the rent due and to
become due under the Lease, and for any damages sustained by Landlord and (6)
continue the Lease in effect and relet the Premises on such terms and
conditions as Landlord may deem advisable with Tenant remaining liable for the
monthly rent plus the reasonable cost of obtaining possession of the Premises
and of reletting the Premises, and of any repairs and alterations necessary to
prepare the Premises for reletting, less the rentals received from such
reletting, if any.  No action of Landlord
shall be construed as an election to terminate the Lease unless written notice
of such intention be given to Tenant. 
Tenant agrees to pay as additional rental all attorneys’ fees and other
costs and expenses incurred by Landlord is enforcing any of Tenant’s
obligations under this Lease.

ARTICLE 30.  TENANT’S RECOURSE

Anything in this Lease to the contrary
notwithstanding, Tenant agrees to look solely to the estate and property of
Landlord in the Land and the Building, subject to prior rights of any ground
lessor, mortgagee, or deed of trust of the Land and Building or any part
thereof, for the collection of any judgment requiring the payment of money by
Landlord in the event of any default by Landlord under this Lease.  Tenant agrees that it is prohibited from
using any other procedures for the satisfaction of Tenants’ remedies.  Neither Landlord nor any of its respective
officers, directors, employees, heirs, successors, or assigns, shall have any
personal liability of any kind or nature, directly or indirectly, under or in
connection with this Lease.

ARTICLE 31.  HOLDING OVER

Subject to prior written consent by Landlord, if
Tenant holds over after the Expiration Date, or any extension thereof, Tenant
shall be a tenant at sufferance, the Minimum Monthly Rent shall be increased to
125% of the then current lease rate at the Building or the Tenant’s lease rate
at the time the Lease expired, whichever is higher, plus any amounts due under Article
5, which shall be payable in advance on the first day of such holdover
period and on the first day of each month thereafter.  Tenant will be considered to be on a
month-to-month basis during any holdover period.

ARTICLE 32.  GENERAL PROVISIONS

32.1                        This
Lease is construed in accordance with the laws of the State of Arizona.

32.2                        If
Tenant is composed of more than one person or entity, then the obligations of
such entities or parties are joint and several.

32.3                        If any
term, condition, covenant, or provision of this Lease is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the terms, conditions, covenants, and provisions hereof shall remain in full
force and effect and shall in no way be affected, impaired, or invalidated.

32.4                        The
various headings and numbers herein and the grouping of the provisions of this
Lease into separate articles and sections are for the purpose of convenience
only and are not be considered a part hereof.

Landlord:    CH

Tenant:     RZ

 6
 

 

 

32.5                        Time
is of the essence of this Lease.

32.6                        In
the event either party initiates legal pro­ceedings or retains an attorney to
enforce any right or obligation under this Lease or to obtain relief for the
breach of any covenant hereof, the party ultimately prevailing in such
proceedings or the non-defaulting party shall be entitled to recover all costs
and reasonable attorneys’ fees.

32.7                        This
Lease, and any Exhibit or Addendum attached hereto, sets forth all the terms, conditions,
covenants, provisions, promises, agreements, and undertakings, either oral or
written, between the Landlord and Tenant. 
No subsequent alteration, amendment, change, or addition to this Lease
is binding upon Landlord or Tenant unless reduced to writing and signed by both
parties.

32.8                        Subject
to Article 24, the covenants herein contained shall apply to and bind
the heirs, successors, executors, personal representatives, legal
representatives, administrators, and assigns of all the parties hereto.

32.9                        No
term, condition, covenant, or provision of this Lease shall be waived except by
written waiver of Landlord, and the forbearance or indulgence by Landlord in
any regard whatsoever shall not con­sti­tute a waiver of the term, condition,
covenant, or provision to be performed by Tenant to which the same shall apply,
and until complete per­form­ance by Tenant of such term, condition, covenant,
or provision, Landlord shall be entitled to invoke any remedy available under
this Lease or by law despite such forbearance or indulgence.  The waiver by Landlord of any breach or term,
condition, covenant, or provision hereof shall apply to and be limited to the
specific instance involved and shall not be deemed to apply to any other
instance or to any subsequent breach of the same or any other term, condition,
covenant, or provision hereof. 
Acceptance of rent by Landlord during a period in which Tenant is in
default in any respect other than payment of rent shall not be deemed a waiver
of the other default.  Any payment made
in arrears shall be credited to the oldest amount outstanding and no contrary
application will waive this right.

32.10                 The
use of a singular term in this Lease shall include the plural and the use of
the masculine, feminine, or neuter genders shall include all others.

32.11                 Landlord’s submission of a copy of
this Lease form to any person, including Tenant, shall not be deemed to be an
offer to lease or the creation of a lease unless and until this Lease has been
fully signed and delivered by Landlord.

32.12                 Every term, condition, covenant, and
provision of this Lease, having been negotiated in detail and at arm’s length
by both parties, shall be construed simply according to its fair meaning and
not strictly for or against Landlord or Tenant.

32.13                 If the time for the performance of any
obligation under this Lease expires on a Saturday, Sunday, or legal holiday,
the time for performance shall be extended to the next succeeding day which is
not a Saturday, Sunday, or legal holiday.

32.14                 If requested by Landlord, Tenant shall
execute written documentation with signatures acknowledged by a notary public,
to evidence when and if Landlord or Tenant has met certain obligations under
this Lease.

ARTICLE 33.  NOTICES

Wherever
in this Lease it is required or permitted that notice or demand be given or
served by either party to or on the other, such notice or demand shall be in
writing and shall be given or served and shall not be deemed to have been duly
given or served unless (a) in writing; (b) either (1) delivered personally,  (2) deposited with the United States Postal
Service, as registered or certified mail, return receipt requested, bearing
adequate postage, or (3) sent by overnight express courier (including, without
limitation, Federal Express, DHL Worldwide Express, Airborne Express, United
States Postal Service Express Mail) with a request that the addressee sign a
receipt evidencing delivery; and (c) addressed to the party at its address in Section
1.1.  Either party may change such
address by written notice to the other. 
Service of any notice or demand shall be deemed completed forty-eight
(48) hours after deposit thereof, if deposited with the United States Postal
Service, or upon receipt if delivered by overnight courier or in person.

ARTICLE 34.  BROKER’S COMMISSIONS

Tenant
represents and warrants that there are no claims for brokerage commissions or
finder’s fees in connection with this Lease (excepting commissions or fees
approved or authorized in writing by Landlord) and further agrees that Tenant
will be solely responsible for payment of any leasing commissions related to
brokers engaged by Tenant in regards to any extension or other modification of
this Lease.  Landlord’s broker for this
Lease is Mark Gustin, Trammell Crow Company, and Landlord shall  be solely responsible for paying Trammell
Crow its’ lease commission.

ARTICLE 35.  INDEMNIFICATION/WAIVER OF SUBROGATION

35.1                        Tenant
shall indemnify, defend, and hold Landlord and any lender of Landlord harmless
against all Claims (as defined below) and costs incurred by Landlord arising
from:  (a) any act or omission of Tenant
or Tenant’s Permittees which results in personal injury, loss of life, or
property damage sustained in and about the Premises, the Building, or the Land;
(b) attachment or discharge of a lien upon the Premises, the Building, or the
Land; (c) Tenant’s and Tenant’s Permittees’ use, generation, storage, release,
threatened release, discharge, disposal, or presence of Hazardous Materials on,
under, or about the Premises, the Building, or the Land; (d) any default of
Tenant under this Lease; and (e) any claims for brokerage commissions or finder’s
fees in connection with this Lease (excepting commissions or fees authorized in
writing by Landlord).  As used in this
Lease, “Claims” means any claim, suit, proceeding, action, cause of action,
responsibility, demand, judgment and execution, and attorneys’ fees and costs
related thereto or arising therefrom.

35.2                        Tenant
hereby releases, discharges, and waives any right of recovery from Landlord and
Landlord’s agents, directors, officers, and employees, and Landlord hereby
releases, discharges, and waives any right of recovery from Tenant and Tenant’s
Permittees, from all Claims, liabilities, losses, damages, expenses, or
attorneys’ fees and costs incurred arising from or caused by any peril required
to be covered by insurance obtained by Landlord or Tenant under this Lease, or
covered by insurance in connection with (a) property on the Premises, the
Building, or  the Land; (b) activities
conducted on the Premises, the Building, or the Land; and (c) obligations to

 

Landlord:    CH

Tenant:     RZ

 7
 

 

indemnify under
this Lease, regardless of the cause of the damage or loss.  Landlord and Tenant shall give their
respective insurance carriers notice of these waivers and shall secure an
endorsement from each carrier to the effect that the waivers given in this Article
35 shall not adversely affect or impair the policies of insurance or
prejudice the right of the named insured on the policy to recover
thereunder.  These waivers apply only to
the extent such Claims, liabilities, losses, damages, expenses, or attorneys’
fees are covered by insurance required pursuant to this Lease.

35.3                        Notwithstanding
anything in this Lease to the contrary, Landlord shall not be responsible or
liable to Tenant for any Claims for loss or damage caused by the acts or
omissions of any persons occupying any space elsewhere in the Building.

ARTICLE
36.  RENEWAL OPTION

Provided that Tenant is
not in default under this Lease, Tenant is granted an Option to renew this
Lease for a period of One (1) year, from October 1, 2007 to September 30,
2008.  Tenant must provide Landlord
written notice on or before June 1, 2007 of Tenant’s intent to exercise the
renewal Option.  The monthly Base Rent
during the Option term shall be $3,982.18. 
All other terms and conditions of this Lease shall remain unchanged
during the Option term.

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

	
  LANDLORD

  	
   

  	
  TENANT

  
	
   

  	
   

  	
   

  
	
  WARNER COURTYARDS, LLC

  	
   

  	
  CATALYTICA ENERGY SYSTEMS, INC.,

  
	
  An Arizona Limited Liability Company

  	
   

  	
  a Delaware Corporation

  
	
   

  	
  By Hannay Investment Properties, Inc.,

  	
   

  	
   

  
	
   

  	
  An Arizona Corporation,

  	
   

  	
   

  
	
   

  	
  Its Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Craig Hannay

  	
   

  	
   

  	
  /s/ Robert Zack

  	
   

  
	
   

  	
  By:

  	
  R. Craig Hannay

  	
   

  	
  By: Robert Zack

  
	
   

  	
  Its:

  	
  President

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  	
   

  
	
  PARK 3020, LLC

  	
   

  	
  August 28, 2006

  	
   

  
	
  An Arizona Limited Liability Company

  	
   

  	
  Date

  
	
   

  	
  By Hannay Investment Properties, Inc.,

  	
   

  	
   

  
	
   

  	
  An Arizona Corporation,

  	
   

  	
   

  
	
   

  	
  Its Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Craig Hannay

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  R. Craig Hannay

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PARK 3030, LLC

  	
   

  	
   

  
	
  An Arizona Limited Liability Company

  	
   

  	
   

  
	
   

  	
  By Hannay Investment Properties, Inc.,

  	
   

  	
   

  
	
   

  	
  An Arizona Corporation,

  	
   

  	
   

  
	
   

  	
  Its Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Craig Hannay

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  R. Craig Hannay

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  METZGER WARNER COURTYARDS, LLC

  	
   

  	
   

  
	
  A Delaware Limited Liability Company

  	
   

  	
   

  
	
   

  	
  By Hannay Investment Properties, Inc.,

  	
   

  	
   

  
	
   

  	
  An Arizona Corporation,

  	
   

  	
   

  
	
   

  	
  Its Attorney in Fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Craig Hannay

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  R. Craig Hannay

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  	
   

  
														

 

 8

 

 

EXHIBIT
“A”

PREMISES

Warner Courtyards

301 W. Warner Tempe, Arizona

1,893 rsf

Suite 132

 

 A-1

 

 

EXHIBIT “B”

BUILDING
RULES AND REGULATIONS

	
  1.

  	
  Tenant will refer all contractors, contractor’s
  representatives and installation technicians rendering any service to Tenant,
  to Landlord for Landlord’s supervision, approval and control before
  performance of any contractual service. This provision shall apply to all
  work performed in the Building including installations of telephones,
  telegraph equipment, electrical devices and attachments, and installations of
  any nature affecting doors, walls, woodwork, trim, windows, ceilings,
  equipment or any other physical portion of Building.

  
	
  2.

  	
  No additional locks or bolts of any kind shall be
  placed upon any of the doors or windows by any Tenant nor shall any changes
  be made in existing locks or the mechanism thereof without consulting the
  Landlord.

  
	
  3.

  	
  Movement in or out of the Building of furniture or
  office equipment, or dispatch or receipt by Tenant of any merchandise or
  materials which require use of stairways, elevators or movement through
  Building entrance or lobby shall be restricted to hours designated by
  Landlord. All such movement shall be under supervision of Landlord and in the
  manner agreed between Tenant and Landlord by pre-arrangement before
  performance. Such pre-arrangement initiated by Tenant will include
  determination by Landlord and subject to its decision and control, as to the
  concerns which may prohibit any article, equipment or any other item from
  being brought into the Building. Tenant is to assume all risk as to damage to
  articles moved and injury to persons or public engaged or not engaged in such
  movement, including equipment, property, and personnel or Landlord if damaged
  or injured as a result of acts in connection with carrying out this service
  for Tenant’ from time of entering property to completion of work; and
  Landlord shall not be liable for acts of any person engaged in, or any damage
  or loss to any of said property or persons resulting from, any act in
  connection with such service performed for Tenant. Any hand trucks, carryalls
  or similar appliances used for the delivery or receipt of merchandise or
  equipment shall be equipped with rubber tires, side guards and such other
  safeguards as the Building shall reasonably require.

  
	
  4.

  	
  No signs, advertisements or notices shall be painted
  or affixed on or to any windows or doors, or other parts of the Building,
  except of such color, size and style and in such places, as shall be first
  approved in writing by Landlord. Building standard suite entrance signs to
  premises shall be placed thereon by a contractor designated by Landlord at
  Landlord’s expense.

  
	
  5.

  	
  Tenant shall not place, install or operate on the
  Premises or in part of the Building, any engine, refrigerating (other than a
  home-type kitchen refrigerator), heating or air conditioning apparatus, stove
  or machinery, or conduct mechanical operations or cook thereon (other than in
  a home-type microwave oven) or therein, or place in or about the Premises any
  explosives, gasoline, kerosene, oil, acids, caustics or any other inflammable,
  explosives, hazardous or odorous material without the prior written consent
  of Landlord. No portion of the Premises shall at any time be used for
  cooking, sleeping or lodging quarters. No Tenant shall cause or permit any
  unusual or objectionable odors to be produced upon or permeate from the
  leased Premises.

  
	
  6.

  	
  Landlord will not be responsible for lost or stolen
  personal property, equipment, money or jewelry from the Building, the
  Premises, or any other area on or about the Property, regardless of whether
  such loss occurs when these areas were locked against entry or not.

  
	
  7.

  	
  No birds or animals shall be brought into or kept in
  or about the Building.

  
	
  8.

  	
  Employees of Landlord shall not receive or carry
  messages for or to Tenant or other person, nor contract with or render free
  or paid services to Tenant or Tenant’s agents, employees, or invitees.

  
	
  9.

  	
  Landlord will not permit entrance to Tenant’s
  offices by use of pass keys controlled by Landlord to any person at any time
  without written permission by Tenant, except employees, contractors, or
  service personnel directly supervised by Landlord.

  
	
  10.

  	
  The entries, passages, doors, elevators and elevator
  doors (if provided), hallways or stairways shall not be blocked or
  obstructed; no rubbish, litter, trash, or material of any nature shall be
  placed, emptied or thrown into these areas, and such areas shall not be used
  at any time except for ingress or egress by Tenant, Tenant’s agents,
  employees or invitees to or from the Premises.

  
	
  11.

  	
  Plumbing fixtures and appliances shall be used only
  for purposes for which constructed, and no sweepings, rubbish, rags or other
  unsuitable material shall be thrown or placed therein. Damage resulting to
  any such fixtures or appliances from misuse by Tenant, its employees, agents,
  visitors or licensees shall be paid by Tenant, and Landlord shall not in any
  case be responsible therefor.

  
	
  12.

  	
  The Landlord desires to maintain the highest
  standards of environmental comfort and convenience for all Tenants. It will
  be appreciated if any undesirable conditions or lack of courtesy or attention
  are reported directly to the management. Tenant shall give immediate notice
  to the Building Manager in case of accidents in the Premises or in the common
  areas or of defects therein or in any fixtures or equipment, or of any known
  emergency in the Building.

  
	
  13.

  	
  No Tenant shall make, or permit to be made, any
  unseemly or disturbing noises, interfere with occupants of this or
  neighboring buildings or premises, or those having business with them,
  whether by the use of any device, musical instrument, radio, unmusical noise,
  whistling, singing, or in any other way interfering with others’ quiet
  enjoyment of the building.

  
	
  14.

  	
  Landlord shall have the right to make such other and
  further reasonable rules and regulations as in the judgment of Landlord may
  from time to time be needful for the safety, appearance, care and cleanliness
  of the Building and for the preservation of good order therein. Landlord
  shall not be responsible to Tenant for any violations of rules and
  regulations by other Tenants.

  
	
  15.

  	
  All Tenants shall adhere to and obey all such
  parking control measures as may be placed into effect by the Landlord through
  the use of signs, identifying decals or other instructions. No bicycles or
  other vehicles of any kind shall be brought into or kept on the Premises
  except in designated areas specified for parking of such vehicles.

  
	
  16.

  	
  No safes or other objects, larger or heavier than
  the Building is limited to carry, shall be brought into or installed on the
  Premises. The Landlord shall have the power to prescribe the weight and
  position of such safes or other objects which shall, if considered necessary
  by the Landlord, be required to be supported by such additional materials
  placed on the floor as the Landlord may direct, and at the expense of the
  Tenant.

  
	
  17.

  	
  Landlord shall have no obligation to repair,
  re-stretch, or replace carpeting, but will spot-clean and sweep carpeting as
  part of any janitorial services required to be furnished by Landlord under
  the Lease.

  
	
  18.

  	
  Names to be replaced on or removed from directories
  should be furnished to the manager in writing on Tenant’s letterhead. All
  replacement directory strips will be at the expense of the Tenant. Landlord
  will determine size and uniformity of strips.

  
	
  19.

  	
  All Tenants shall see that doors of their premises
  are closed and securely locked before leaving the Building and must observe
  strict care not to leave such doors open and exposed to the weather or other
  elements. Tenant shall exercise extraordinary care and caution that all

  

Landlord:    CH

Tenant:     RZ

 B-1
 

 

 

	
  

  	
  water faucets or water apparatus are entirely shut
  off before the Tenant or the Tenant’s employees leave the Building, and that
  all electricity, gas and air conditioning shall likewise be carefully shut
  off, so as to prevent waste or damage, where controlled by Tenant.

  
	
  20.

  	
  Janitorial services shall be provided five days per
  week in and about the Premises, and in no case shall such services be
  provided for Saturdays, Sundays and holidays (legal). Tenants shall not cause
  unnecessary labor by reason of carelessness or indifference in the
  preservation of good order and cleanliness. The work of the janitor or
  cleaning personnel shall not be hindered by Tenant after 5:30 p.m., and
  such work may be done at any time when the offices are vacant. The windows,
  doors and fixtures may be cleaned at any time without interruption of purpose
  for which the Premises are let. Tenant shall provide adequate waste and
  rubbish receptacles, cabinets, bookcases, map cases, etc. necessary to
  prevent unreasonable hardship to Landlord in discharging its obligation
  regarding cleaning service. Boxes should be broken down to fit into
  containers.

  
	
  21

  	
  Canvassing, soliciting and peddling in the Building
  are prohibited. All Tenants shall cooperate to prevent the same.

  
	
  22.

  	
  All nail holes are to be patched and repaired in
  Tenant’s suite by Tenant upon vacating Premises.

  
	
  23.

  	
  All holiday decorations and other temporary or
  special decorations must be flame-retardant. No live Christmas trees or
  candles are to be used throughout the Building. No decorations should be hung
  on the exterior windows or on exterior suite doors.

  
	
  24.

  	
  There shall be no smoking permitted in the Building.

  

Landlord:    CH

Tenant:     RZ

 

 B-2

 

 

EXHIBIT “C”

PARKING RULES AND REGULATIONS

The parking rules &
regulations are designed to assure our tenants and visitors safe use and
enjoyment of the facilities.  Please
remove or hide any personal items of value from plain sight to avoid temptation
leading to vandalism of vehicles.  Please
exercise added caution when using parking lot at night. Please keep vehicle
locked at all times.  Please report
violations of these rules to the Property Manager immediately.  Please report any lights out or other possibly
dangerous situations to the Property Manager as soon as possible.

Types of Parking

Surface
- Covered

All
surface-covered spaces are reserved and assigned to tenants.  These spaces are available for lease
only.  Parking spaces will be leased on a
90-day prepaid basis. (Contact Property Manager for information).

Visitor
Parking

Visitor
parking is for clients and visitors to the building.  In some cases, a time limit will be
posted.  Tenants and employees should not
use these spaces.

Handicap Parking 

Only
vehicles displaying handicap plates or official handicap placards may park in
the spaces designated as handicap parking.

Surface
— Uncovered

All surface uncovered
parking spaces, not marked handicap or reserved, are available for use by
tenants and employees.

Hours For Parking

7:00
a.m. to 6:00 p.m.    Same as building
hours.

Restrictions

·                  Damage
caused by vehicles is the responsibility of vehicle owner.

·                  Landlord
is not responsible for theft or damage to any vehicle.

·                  Vehicles
that leak excessive fluids will be required to protect parking surface.

·                  Mechanical
repairs to vehicles are not permitted on property.

·                  Large
or oversize vehicles such as motor homes, boats or trailers are not permitted.

·                  No
parking in fire lanes, loading zones or any other areas not designated as a
parking space.

·                  Landlord,
at Landlord’s sole discretion, may add or modify the parking rules.

Violations of rules & regulations may result in
towing from the Property.  Towing from
the Property can only be ordered by Landlord or Property Manager.  Charges for towing are to be paid by vehicle
owner.

Landlord:    CH

Tenant:     RZExhibit
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: 225434BY4

  
	
   

  	
   

  
	
   

  	
   

  
	
  NO. 1

  	
  PRINCIPAL AMOUNT: $2,433,000

  

 

CREDIT SUISSE (USA), INC.

Reverse Convertible Securities Linked to the Performance of Lowe’s Companies,
Inc.

due
August 31, 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 8.50% per annum on the
principal amount from August 31, 2006. 
The coupon payment will be payable quarterly in arrears on November 30,
2006, February 28, 2007, May 31, 2007, and August 31, 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/ Tony A.
  Ehinger

  
	
   

  	
   

  	
  Name:

  	
  Tony A. Ehinger

  
	
   

  	
   

  	
  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:  August
31, 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 Lowe’s Companies,
Inc.

due August 31, 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 Lowe’s Companies, Inc. due August 31, 2007 (the “Note”).

A coupon will be payable on this Note of
8.50% per annum on the principal amount from August 31, 2006.  The coupon payment will be payable quarterly
in arrears on November 30, 2006, February 28, 2007, May 31, 2007, and August
31, 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 August 31, 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
August 31, 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 August 28, 2006, which is the
initial setting date, to and including August 27, 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 August 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 $27.13.

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.

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.

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.

 R-5
 

 

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.

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;

 R-6
 

 

(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 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.

 R-7
 

 

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 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

 R-8
 

 

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”).

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.

 R-9
 

 

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.

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

 R-10
 

 

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
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

 R-11
 

 

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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