Document:

exv10w5

Exhibit
10.5

DATED  17 OCTOBER 2006

CATALYTIC SOLUTIONS INC.

and

STEVE GOLDEN

 

CONTRACT OF EMPLOYMENT

 

Reed Smith

Minerva House

5 Montague Close

London SE1 9BB

Tel: +44 (0) 20 7403 2900

Fax: +44 (0) 20 7403 4221

REF: CDC/728882.00001

 

 

Contract of Employment

TABLE OF CONTENTS

	 	 	 	 	 

	1. INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	2. POSITION
	 	 	2	 
	 
	 	 	 	 
	3. RECOGNITION OF PAST-EMPLOYMENT
	 	 	2	 
	 
	 	 	 	 
	4. BASE SALARY
	 	 	2	 
	 
	 	 	 	 
	5. ANNUAL BONUS
	 	 	2	 
	 
	 	 	 	 
	6. EQUITY INCENTIVE
	 	 	3	 
	 
	 	 	 	 
	7. BENEFITS
	 	 	3	 
	 
	 	 	 	 
	8. TERMINATION
	 	 	4	 
	 
	 	 	 	 
	9. CONFIDENTIALITY
	 	 	12	 
	 
	 	 	 	 
	10. INTELLECTUAL PROPERTY
	 	 	15	 
	 
	 	 	 	 
	11. RESTRICTIONS DURING EMPLOYMENT
	 	 	17	 
	 
	 	 	 	 
	12. POST-TERMINATION RESTRICTIONS
	 	 	17	 
	 
	 	 	 	 
	13. ASSOCIATED COMPANY
	 	 	20	 
	 
	 	 	 	 
	14. TAX
	 	 	21	 
	 
	 	 	 	 
	15. APPLICABLE LAW AND JURISDICTION
	 	 	21	 
	 
	 	 	 	 
	16. ARBITRATION
	 	 	21	 
	 
	 	 	 	 
	17. AMENDMENT AND WAIVER
	 	 	22	 
	 
	 	 	 	 
	18. LEGAL FEES
	 	 	22	 
	 
	 	 	 	 
	19. COUNTERPARTS
	 	 	23	 

Page i

 

Contract of Employment

THIS
AGREEMENT is made on                  2006

BETWEEN:

	(1)	 	CATALYTIC SOLUTIONS INC., a company incorporated in the US state of California with
organisational identification number C1959299 and with its principal place of business at 1640
Fiske Place, Oxnard, California 93033 (“CSI”); and
	 
	(2)	 	STEVE GOLDEN of 584 Dentro Drive, Santa Barbara, California, 93111 (“you” or “your”).

CONDITIONS:

	(A)	 	This Agreement is conditional upon the admission of the issued and to be issued common stock
in CSI to trading on AIM, a market operated by the London Stock Exchange plc, by no later than
31 December 2006 (“Admission”). This Agreement shall not have any legal force unless and
until Admission occurs.

	1.	 	INTRODUCTION

	1.1	 	This Agreement shall, upon Admission, be in substitution for any previous agreement or
arrangement between you and CSI, which shall be deemed to be terminated by mutual agreement,
and constitutes the sole, complete and entire contract, agreement and understanding between
CSI and you concerning your employment with CSI; the terms and conditions of your employment
with CSI; the duration of your employment with CSI; the termination of your employment with
CSI; and the compensation and benefits to be paid and provided by CSI to you pursuant to your
employment with CSI and you hereby waive your rights to bring any claim against CSI in respect
of the termination of any previous agreements or arrangement between you and CSI.
	 
	1.2	 	For the avoidance of doubt, this Agreement shall upon Admission, supersede any and all prior
contracts, agreements, agreements in principle, correspondence, letters of intent,
understandings, and/or negotiations, whether oral or written, concerning your employment with
CSI; the terms and conditions of your employment with CSI; the duration of your employment
with CSI; the termination of your employment with CSI; and the compensation and benefits to be
paid and provided by CSI to you pursuant to your employment with CSI.

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Contract of Employment

	1.3	 	You agree and represent that you have read this Agreement, including each of its terms and
provisions, and that you have taken the time necessary to ensure that you completely
understand them. You further agree and represent that you have had the unrestricted right and
opportunity to review each and every paragraph, term and/or provision of this Agreement with
legal counsel selected and retained solely by you.
	 
	1.4	 	References in this Agreement to statutes or regulations shall include any statute or
regulation modifying, re-enacting, extending or made pursuant to the same or which is
modified, re-enacted or extended by the same. Headings are for ease of reference only and
shall not be taken into account in the construction of this Agreement. Words importing the
singular number shall include the plural and vice versa and words importing the masculine
shall include the feminine and neuter and vice versa. The language of this Agreement, and of
each paragraph, term and/or provision hereof, shall, in all cases, for any and all purposes,
and in any and all circumstances whatsoever, be construed as a whole, according to its fair
meaning, not strictly for or against you or CSI and with no regard whatsoever to the identity
or status of any person or persons who drafted all or any portion of this Agreement.
	 
	2.	 	POSITION
	 
	 	 	You are employed as Chief Technical Officer. In this position, you have been elected to
CSI’s Board of Directors (the “Board”) and will be Chief Technical Officer of CSI, reporting
directly to the Chief Executive Officer of CSI or, in his absence, the non-executive members
of the Board, performing the duties and responsibilities determined, established and/or
assigned by the Chief Executive Officer or, in his absence, the non-executive members of the
Board.
	 
	3.	 	RECOGNITION OF PAST-EMPLOYMENT
	 
	 	 	It is recognised that you were first employed by CSI in January, 1996.
	 
	4.	 	BASE SALARY
	 
	 	 	You shall be paid a base salary at a rate of $257,499.84 per year. CSI will review your pay
rate annually in accordance with its general policies.
	 
	5.	 	ANNUAL BONUS
	 
	5.1	 	As a full-time employee, you are eligible to participate in CSI’s short-term incentive
program based on the attainment of such goals and objectives as may be set in each bonus year
by CSI’s Remuneration Committee in consultation with you. In each bonus

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Contract of Employment

	 	 	year, you will have the opportunity to obtain a bonus of up to 30% of your base salary,
dependant on CSI’s attainment of certain goals and objectives. In addition, you will have
the opportunity in each bonus year to earn an additional bonus up to 30% of your base
salary, dependant on the achievement of specific exceptional performance goals and
objectives.
	 
	5.2	 	 
	 
	5.3	 	CSI confirms that the Company’s 2006 bonus scheme, as existed prior to this Agreement, shall
continue until 31 December 2006.
	 
	6.	 	EQUITY INCENTIVE
	 
	6.1	 	As a full-time employee, you will be eligible to participate in such stock option plans as
may be operated from time to time by CSI. Any awards of stock options that may be made to you
from time to time shall be subject to the rules of the relevant scheme as may be in force from
time to time.
	 
	6.2	 	Except in circumstances where you are terminated for Cause or you have committed a breach of
this Agreement, you may, subject to the rules of the relevant scheme as may be in force from
time to time, exercise any stock options, which as at the Termination Date have vested and
become exercisable, at any time during the year immediately following the earlier of notice
being given to terminate your employment or the termination of your employment, after which
time any such vested, but unexercised stock options, shall lapse and cease to be exercisable
and you shall not be entitled to any compensation whatsoever in respect of the loss of any
such options.
	 
	7.	 	BENEFITS
	 
	 	 	You will be eligible to participate in employee benefits programs generally provided by CSI.
Currently, CSI’s employee benefits include partial payment for health insurance. CSI pays
80% of the medical insurance premium, 50% of the dental insurance premium and 50% of the
vision insurance premium for the employee and 50% of the premium costs for dependents. CSI
encourages participation in the CSI 401(k) Plan, in which you are eligible to enrol. You
are eligible to receive Short Term and Long Term Disability insurance and Life insurance, in
relation to which CSI pays for 100% of the premium. The benefits you are provided with
pursuant to this paragraph are subject to change at the sole discretion of the Board and/or
CSI.

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Contract of Employment

8. TERMINATION

8.1 Your employment shall terminate upon the occurrence of any of the following events:

	 	8.1.1	 	Termination Without Cause.

	 	8.1.1.1	 	CSI may at any time terminate your employment without Cause upon not less
than six months’ prior written notice of termination. In circumstances where
you are removed without Cause, CSI reserves the right to terminate your
employment without notice or with less than six months’ notice and, subject to
Clauses 8.1.7 and 8.1.8, will in that event make a payment in lieu of notice.
	 
	 	8.1.1.2	 	In circumstances where you are terminated without Cause and without notice
or full notice, you shall, subject to the rules of any relevant benefit
providers and the rules of any relevant benefit scheme, continue to receive
medical coverage and such other health and welfare benefits in effect on your
date of termination (or generally comparable coverage) for yourself and, where
applicable, your spouse and dependents, as may be provided from time to time
for employees generally, for such period of time as you would have continued to
receive these benefits had you been dismissed with full notice. As an
alternative to the foregoing, CSI may elect to pay you cash in lieu of such
coverage in an amount equal to your after-tax cost of continuing such coverage,
only where such coverage may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the coverage is
provided). The COBRA health care continuation coverage period under Section
4980B of the Code, as amended, shall run concurrently with the foregoing
benefit period.
	 
	 	8.1.1.3	 	The payment in lieu of notice referred to in clause 8.1.1.1 shall include:

	 	(i)	 	A sum equal to the value of base salary
which you would have received had you been dismissed with full
notice, plus your accrued but unused vacation as at the date your
employment terminated; and
	 
	 	(ii)	 	A pro-rated bonus for the portion of the
bonus year that would have expired had you been dismissed with full
notice.

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Contract of Employment

	 	8.1.1.4	 	Subject always to clauses 8.1.7 and 8.1.8 below, payment of the sums
referred to in clause 8.1.1.3(i) above shall be made within 21 days of the
termination of your employment and payment of the sum referred to in clause
8.1.1.3(ii) shall be made following the end of the relevant bonus year and in
accordance with the rules of the relevant bonus scheme.
	 
	 	8.1.1.5	 	Upon any termination described in clause 8.1.1.1 above, you shall, subject
to clauses 8.1.7 and 8.1.8 below, be entitled to receive, upon execution of a
Release, a sum equal to eighteen months’ salary, to be paid in equal
instalments, at or around the same time as CSI pays salary to its employees,
over an eighteen month period that commences upon the latter of the termination
of your employment or your execution of a Release.

	 	8.1.2	 	Resignation for Good Reason.

	 	8.1.2.1	 	You may at any time terminate your employment by resigning for Good Reason.
You shall give CSI not less than thirty (30) days’ prior written notice of
termination of such resignation.
	 
	 	8.1.2.2	 	Upon any resignation described in clause 8.1.2.1 above, you shall, subject
to clauses 8.1.7 and 8.1.8 below, be entitled to receive, upon execution of a
Release, the following:

	 	(i)	 	You shall receive a sum equal to
twenty-four months’ salary, to be paid in equal instalments, at or
around the same time as CSI pays salary to its employees, over a
twenty-four month period that commences upon the latter of the
termination of your employment or your execution of a Release;
	 
	 	(ii)	 	You shall receive a pro-rated bonus for the
portion of the bonus year that had expired as at the date your
employment terminated. This pro-rated bonus shall be paid to you
following the end of the relevant bonus year and in accordance with
the rules of the relevant bonus scheme;
	 
	 	(iii)	 	You shall, subject to the rules of any
relevant benefit providers and the rules of any relevant benefit
scheme, continue to receive medical coverage and such other health
and welfare benefits in effect on your date of termination (or
generally

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Contract of Employment

	 	 	 	comparable coverage) for yourself and, where applicable, your
spouse and dependents, as may be provided from time to time for
employees generally, for a period of twenty-four (24) months from
the latter of the termination of your employment or your execution
of a Release. As an alternative to the foregoing, CSI may elect to
pay you cash in lieu of such coverage in an amount equal to your
after-tax cost of continuing such coverage, only where such
coverage may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the
coverage is provided). The COBRA health care continuation coverage
period under Section 4980B of the Code, as amended, shall run
concurrently with the foregoing benefit period; and
	 
	 	(iv)	 	You shall receive the payment of your
accrued but unused vacation as at the date your employment
terminated.

	 	8.1.3	 	Voluntary Resignation Without Good Reason.

	 	 	 	You may at any time voluntarily terminate your employment for any reason other than
Good Reason. You shall give CSI not less than six months’ prior written notice of
such resignation. In the event that you voluntarily resign under this clause 8.1.3,
no further payments shall be due under this Agreement, other than in respect of
accrued base salary through to the date that your employment terminates, accrued but
unused vacation as at the date your employment terminated and any accrued benefits
under CSI’s benefit plans and programs as at the date your employment terminates.
For the avoidance of doubt, you shall not be entitled to any bonus in respect of the
bonus year in which you give notice of termination without Good Reason or any
subsequent bonus years.

	 	8.1.4	 	Termination for Cause

	 	 	 	CSI may at any time terminate your employment for Cause without notice and
without compensation or payment in lieu of notice. In the event that CSI terminates
you for Cause no further payments shall be due under this Agreement, other than in
respect of accrued base salary through to the date that your employment terminates,
accrued but unused vacation as at the date your employment terminates and any
accrued benefits under CSI’s benefit plans and programs as at the date your
employment terminates. For the avoidance of

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Contract of Employment

	 	 	 	doubt, you shall not be entitled to any bonus in respect of the bonus year in which
you are terminated for Cause.

	 	8.1.5	 	Disability

	 	8.1.5.1	 	CSI may at any time terminate your employment for Disability without notice
and without compensation or payment in lieu of notice.
	 
	 	8.1.5.2	 	In the event that your employment is terminated due to Disability you shall,
subject to Clauses 8.1.7 and 8.1.8 below, be entitled to receive, upon
execution of a Release, the following:

	 	(i)	 	You shall receive a sum equal to six
months’ salary, to be paid in equal instalments, at or around the
same time as CSI pays salary to its employees, over a six month
period that commences upon the latter of the termination of your
employment or your execution of a Release;
	 
	 	(ii)	 	You shall receive a pro-rated bonus for the
portion of the bonus year that had expired as at the date your
employment terminated. This pro-rated bonus shall be paid to you
following the end of the relevant bonus year and in accordance with
the rules of the relevant bonus scheme;
	 
	 	(iii)	 	You shall, subject to the rules of any
relevant benefit providers and the rules of any relevant benefit
scheme, continue to receive medical coverage and such other health
and welfare benefits in effect on your date of termination (or
generally comparable coverage) for yourself and, where applicable,
your spouse and dependents, as same may be provided from time to time
for employees generally, for a period of six (6) months from the
latter of the termination of your employment or your execution of a
Release. As an alternative to the foregoing, CSI may elect to pay
you cash in lieu of such coverage in an amount equal to your
after-tax cost of continuing such coverage, only where such coverage
may not be continued (or where such continuation would adversely
affect the tax status of the plan pursuant to which the coverage is
provided). The COBRA health care continuation coverage period under
Section 4980B

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Contract of Employment

	 	 	 	of the Code, as amended, shall run concurrently with the foregoing
benefit period; and
	 
	 	(iv)	 	You shall receive the payment of your
accrued but unused vacation as at the date your employment
terminated.

	 	8.1.5.3	 	If at any time you are receiving payments pursuant clause 8.1.5.2 and you
become eligible to receive benefits under CSI’s Long Term Disability insurance
as described in clause 7, or any such other long term disability insurance
provided by CSI as may be from time to time in effect, all payments pursuant to
clause 8.1.5.2 shall be reduced by such disability insurance benefits.

	 	8.1.6	 	Death

	 	8.1.6.1	 	If you die during the term of this Agreement, this Agreement shall
automatically terminate on the date of your death. CSI’s total liability to
you under this Agreement, unless required by law, shall be limited to:

	 	(i)	 	the payment of the base salary earned by
you as of the date of your death;
	 
	 	(ii)	 	a pro-rated bonus for the portion of the
bonus year that had expired as at the date of your death; and
	 
	 	(iii)	 	the provision of any benefits applicable
to you as of that date, including the payment of your accrued but
unused vacation.

	 	8.1.6.2	 	The payments and/or provision of any benefits under this paragraph shall be
made to your estate, subject to Clause 8.1.8 below. For the avoidance of doubt,
payment of any pro-rated bonus pursuant to clause 8.1.6.1(ii) shall be paid to
your estate following the end of the relevant bonus year and in accordance with
the rules of the relevant bonus scheme, subject to Clause 8.1.8 below.

	 	8.1.7	 	Compliance with Post-Termination Obligations

	 	8.1.7.1	 	With the exception of payments under Clause 8.1.6.1, all entitlements to
payments under Clause 8.1 are conditional upon:

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Contract of Employment

	 	(i)	 	your continued compliance with the
provisions of Clause 12 below, following the termination of your
employment; and
	 
	 	(ii)	 	your continued material compliance with
Clauses 9 and 10 below, following the termination of your employment,
as determined by a majority of the non-executive directors of the
Board, acting in good faith.

	 	8.1.7.2	 	In the event of any of the following, you are not entitled to any payments
under Clause 8.1. Accordingly, any payments already made to you pursuant to
Clause 8.1 are recoverable by CSI as a debt:

	 	(i)	 	you do not comply with the provisions of
Clause 12; or
	 
	 	(ii)	 	you do not, in the opinion of a majority of
the non-executive directors of the Board, acting in good faith,
materially comply with the provisions of Clauses 9 or 10.

	 	8.1.8	 	Section 409A Compliance.

	 	8.1.8.1	 	Notwithstanding the timing of any payment described in this Section 8, if
you are a “Specified Employee” (as defined in Section 409A of the Internal
Revenue Code of 1986), the first payment due to you upon a separation of
service as defined in Section 409A of the Internal Revenue Code of 1986 shall
not be made before the date which is six (6) months after the date of your
separation of service with CSI.

	8.2	 	Right to Modify Work Duties

	 	8.2.1	 	Where either party gives notice to terminate your employment in accordance
with Clause 8.1 or otherwise, and for the purpose of investigating any disciplinary
matter, CSI may require you not to attend for work and/or not to undertake any or all
of your duties or to allocate other duties to you, for such reasonable period as CSI
may specify (the “Leave Period”).
	 
	 	8.2.2	 	During the Leave Period:

	 	8.2.2.1	 	CSI shall not be obliged to provide you with any work;
	 
	 	8.2.2.2	 	CSI shall continue to pay your salary and provide any other benefits to
which you are contractually entitled and you shall remain bound by the

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Contract of Employment

	 	 	 	    terms and conditions of this Agreement (your attention is particularly
drawn to Clause 9.1 below);

	 	8.2.2.3	 	any bonus that applies to you shall continue to accrue if you are being
terminated by CSI without Cause, but shall not continue to accrue in the event
that your employment is to terminate as a result of your resignation without
Good Reason. In circumstances where a disciplinary matter is being
investigated, any accrual of bonus shall be at the Board’s discretion;
	 
	 	8.2.2.4	 	CSI may require you to return any Confidential Information and such other
documents, supplies, equipment, lists and other property that belongs to CSI or
its customers or that include or reflect any trade secrets of CSI or its
customers that may be in your possession. If requested by CSI, you will
deliver confirmation to CSI that you have complied with this Clause 8.2.2.4.
	 
	 	8.2.2.5	 	CSI may require you to resign from any directorship or other office held in
CSI or any Associated Company. You may also be required to resign from any
directorships or other positions of office that you may hold as a nominee or
representative of CSI or any Associated Company. In circumstances where you are
required to resign a directorship or other office in connection with the
investigation of a disciplinary matter and you are, following any disciplinary
process, substantially vindicated, you shall be invited to take up any
directorship or office from which you resigned; and
	 
	 	8.2.2.6	 	CSI may, subject to you always being prohibited from contacting any
colleagues or actual or potential customers or clients of CSI or any Associated
Company for the purposes of competing with or preparing to compete with CSI or
any Associated Company, require that you do not contact any colleagues or
actual or potential customers or clients of CSI or any Associated Company.

	8.3	 	Resignations and General

	 	8.3.1	 	On termination of your employment for whatever reason, you shall immediately
tender your resignation as a director of CSI or any Associated Company and from any
other offices you may hold in CSI or any Associated Company. At the same time, you
shall also tender your resignation from any directorships or other

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Contract of Employment

	 	 	 	positions of office that you may hold as a nominee or representative of CSI or any
Associated Company, without prejudice to any rights accruing to either party to this
Agreement and without any claim for compensation.
	 
	 	8.3.2	 	In the event of the termination of your employment or a request that you
resign from any directorship or other office pursuant to Clause 8.2.2.5, you hereby
irrevocably authorise CSI to appoint someone to be your attorney and in your name and
on your behalf to sign, execute and do all such things as CSI thinks necessary or
desirable to fully implement the resignations referred to in Clauses 8.2.2.5 and 8.3.1.
You agree that the grant of the foregoing power of attorney shall survive your
disability.
	 
	 	8.3.3	 	The termination of your employment shall not affect those terms of this
Agreement which are expressed to have effect after termination and shall be without
prejudice to any accrued rights or remedies of the parties.

	8.4	 	Definitions

	 	 	For purposes of this Agreement, the following terms shall have the meanings set forth below:

	 	8.4.1	 	“Cause” shall mean any of the following, as determined by a majority of the
non-executive directors of the Board acting in good faith:

	 	8.4.1.1	 	the commission by you of any felony, including fraudulent business conduct,
or a crime involving moral turpitude, irrespective of whether the commission of
such felony or crime results in your conviction by a court of competent
jurisdiction;
	 
	 	8.4.1.2	 	your insubordination to the Chief Executive Officer or the Board, failure or
refusal to follow the reasonable instructions of the Chief Executive Officer or
the Board or reasonable policies, standards and regulations of CSI or any
Associated Company;
	 
	 	8.4.1.3	 	inadequate or unsatisfactory performance of your duties and
responsibilities, including, without limitation, your failure or refusal to
faithfully and diligently perform the usual, customary duties of your
employment with CSI or any Associated Company;
	 
	 	8.4.1.4	 	your unprofessional, unethical, immoral or fraudulent conduct, including,
without limitation, your failure to abide by CSI’s or any

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Contract of Employment

	 	 	 	Associated Company’s policies and procedures, your destruction of CSI’s or
any Associated Company’s property, and/or your performing any act adverse
to CSI’s or any Associated Company’s interests;
	 
	 	8.4.1.5	 	conduct on your part that discredits CSI or any Associated Company or is
detrimental to the reputation, character and standing of CSI or any Associated
Company; or
	 
	 	8.4.1.6	 	your material breach of this Agreement.

	 	8.4.2	 	“Disability” shall mean your physical or mental incapacity to perform a
substantial portion of your duties and responsibilities for any period or periods
which, in aggregate, total 90 or more calendar days within any twelve month period.
	 
	 	8.4.3	 	“Good Reason” shall mean any of the following:

	 	8.4.3.1	 	a diminution in, or assignment of duties inconsistent your position
(including status, offices, titles and reporting) or a reduction in base
salary;
	 
	 	8.4.3.2	 	CSI’s requirement that you relocate your principle place of employment with
CSI as of the effective date of the Agreement to a location that is greater
than fifty (50) miles from such principal place of employment; or
	 
	 	8.4.3.3	 	CSI’s material breach of the Agreement.

	 	8.4.4	 	“Release” shall mean a general mutual release between you and CSI containing a
mutual non-disparagement clause and mutually agreed to by both parties.

	9.	 	CONFIDENTIALITY

	9.1	 	You agree that, as a result of and in connection with your employment with CSI, you will be
given access to, and/or you will obtain information regarding, trade secrets and/or
Confidential Information concerning CSI’s business and employees.
	 
	9.2	 	You shall not, either on your own account, in conjunction with or on the behalf of any other
person, firm or company, whether directly or indirectly and whether with a view to profit or
otherwise, do any of the following, otherwise than in the proper course of your duties or with
the written consent of CSI:

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Contract of Employment

	 	9.2.1	 	use Confidential Information for the benefit of yourself or any other person,
firm or company;
	 
	 	9.2.2	 	disclose Confidential Information to any person, firm or company; or
	 
	 	9.2.3	 	remove Confidential Information from CSI’s premises.

	9.3	 	You agree to return, upon CSI’s request, any Confidential Information and such other
documents, supplies, equipment, lists and other property that belongs to CSI or its customers
or that include or reflect any trade secrets of CSI or its customers that may be in your
possession.
	 
	9.4	 	For the purposes of this Agreement, Confidential Information means any trade secret or
information of a confidential nature concerning CSI’s business, any client or prospective
client, in any form or medium, and whether or not designated or marked ‘confidential’, which
you obtain or become aware of during the course of your employment with CSI, whether under
this Agreement or any previous contract of employment with CSI, or which, by virtue of your
position, it may reasonably be assumed you have obtained or become aware of, including, but
not limited to:

	 	9.4.1	 	any trade secret or confidential or secret information concerning the business
development, affairs, future plans, business methods, connections, operations,
accounts, finances, organisation, processes, policies or practices, designs, dealings,
trading, software, or know-how relating to or belonging to CSI and/or to any Associated
Company or any of its suppliers, agents, distributors, clients or customers;
	 
	 	9.4.2	 	confidential computer software, computer-related know-how, passwords, computer
programmes, specifications, object codes, source codes, network designs, business
processes, business logic, inventions, improvements and/or modifications relating to or
belonging to CSI and/or any Associated Company;
	 
	 	9.4.3	 	details of CSI’s or any Associated Company’s financial projections or
projects, prices or pricing strategy, advertising, marketing or development plans,
product development plans or strategies, fee levels, commissions and commission
structures, market share and pricing statistics, marketing surveys and research reports
and their interpretation;
	 
	 	9.4.4	 	any confidential research, report or development undertaken by or for CSI or
any Associated Company;

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Contract of Employment

	 	9.4.5	 	details of relationships or arrangements with, or knowledge of the needs or
the requirements of, CSI’s or any Associated Company’s actual or potential clients or
customers;
	 
	 	9.4.6	 	information supplied in confidence by customers, clients or any third party to
which CSI or any Associated Company owes an obligation of confidentiality;
	 
	 	9.4.7	 	lists and details of contracts with CSI’s or any Associated Company’s actual
or potential suppliers;
	 
	 	9.4.8	 	information of a personal or otherwise of a confidential nature, including
without limitation information relating to recruitment, training, salary, compensation,
performance or other personnel data, relating to fellow employees, directors or
officers of and/or consultants to, CSI and/or any Associated Company for which you may
from time to time provide services;
	 
	 	9.4.9	 	Confidential Information concerning, or details of, any competitive business
pitches, and/or target details; or
	 
	 	9.4.10	 	any document or information which has been supplied to you in confidence or which you
have been informed is confidential or which you might reasonably be aware is
confidential.

	9.5	 	You undertake to use your best endeavours to prevent unauthorised publication or disclosure
to any third party of any Confidential Information as defined in Clause 9 (save as may be
required by law or a duly authorised regulatory body).
	 
	9.6	 	On termination of your employment with CSI, you undertake to immediately return all
Confidential Information and other documents, supplies, equipment, lists and other such
property that belongs to CSI or its customers or that include or reflect any trade secrets of
CSI or its customers. If requested by CSI, you will deliver to CSI, at the time of the
termination of your employment, confirmation that you have complied with this Clause 9.6.
	 
	9.7	 	The provisions of Clauses 9 shall continue to apply after termination of employment,
howsoever arising, without any time limit but shall cease to apply to any information or
knowledge which may at any time come into the public domain other than through unauthorised
disclosure.

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Contract of Employment

	9.8	 	CSI reserves the right to notify any of your future or prospective employers of the existence
of the provisions of Clause 9.

	10.	 	INTELLECTUAL PROPERTY

	10.1	 	You agree to promptly inform CSI of and to make full disclose to CSI of all Creations, which
you have made, or may hereafter make, conceive, create, invent, develop, devise, discover,
perfect, first reduce to practice, write or fix in a tangible medium of expression, either
solely or jointly with others, either:

	 	10.1.1	 	during your employment with CSI if such Creation is related, directly or indirectly
to the business of CSI and/or the actual or demonstrably anticipated research or
development work of CSI and/or any Associated Company; or
	 
	 	10.1.2	 	with the use of the time, materials, supplies, facilities or Confidential Information
of CSI and/or any Associated Company; or
	 
	 	10.1.3	 	within one year following any termination or ending of your employment with CSI if
the Creation is conceived as a result of and is attributable to work done during your
employment with CSI and relates to a method, substance, machine, article of manufacture
or improvement therein within the scope of the business of CSI and/or any Associated
Company.

	10.2	 	All Creations referred to in Clause 10.1 shall automatically assign to CSI and its successors
immediately upon being made, conceived, created, invented, developed, devised, discovered,
perfected, first reduced to practice, written or otherwise fixed in a tangible medium of
expression and shall be the exclusive property of CSI, without payment of any further
consideration for such assignment and you shall have no further rights, title or interest in
or to the aforesaid Creations.
	 
	10.3	 	You agree to execute such documents as CSI may request to assign or confirm the assignment to
it of all rights in the Creations referred to in Clause 10.1. You hereby authorise CSI to
appoint someone to be your attorney and in your name and on your behalf, to sign, execute and
do all such things as CSI thinks necessary or desirable to effect assignments or confirmations
of assignment of:

	 	10.3.1	 	the Creations referred to in Clauses 10.1.1 and 10.1.2 above; and
	 
	 	10.3.2	 	the Creations referred to in Clause 10.1.3 above, to the extent that a majority of
the non-executive directors of the Board agree that such Creations have been conceived
as a result of and are attributable to work done during your

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Contract of Employment

	 	 	 	employment with CSI and relate to a method, substance, machine, article of
manufacture or improvement therein within the scope of the business of CSI and/or
any Associated Company.

	10.4	 	You agree that the grant of the power of attorney in Clause 10.3 shall survive your
disability.
	 
	10.5	 	You agree to assign to CSI all of your rights in any Creation if CSI is required to grant
those rights to the United States government or any agencies of the United States government
and you hereby authorise CSI to appoint someone to be your attorney and in your name and on
your behalf, to sign, execute and do all such things as CSI thinks necessary or desirable to
effect such assignment. You agree that the grant of the foregoing power of attorney shall
survive your disability.
	 
	10.6	 	You agree to assist CSI in obtaining and/or maintaining patents, copyrights, mask work
rights, and similar rights to any Creations assigned by you to CSI if CSI, in its sole
discretion, requests such assistance. You agree to sign all documents and do all other things
deemed necessary by CSI, at CSI’s expense, to obtain and/or maintain such rights, to assign
them to CSI, to defend them from invalidation, and to protect them against infringement by
other parties. If CSI requires your assistance under this Clause 10.6 after the termination
of your employment with CSI, you shall be compensated for time actually spent in providing
assistance at your hourly pay rate as at the date your employment with CSI terminated.
	 
	10.7	 	For the purposes of this Agreement, “Creation” means and refers to, without limitation, any
idea, concept, invention, design, apparatus, practice, method, product, improvement,
algorithm, technique, machine, device, composition of matter, instrument, tool, formula,
literary or graphical or audiovisual work or sound recording, mask work, computer program, or
copyright, which is new or which you have a reasonable basis to believe may be new, whether or
not patentable, or subject to copyright or mask work right, or similar protection or reduced
to practice by CSI or any other person, corporation, partnership, firm, company, joint venture
or other entity, including, without limitation, inventions, Confidential Information,
know-how, creations, discoveries, and software.
	 
	10.8	 	The provisions of Clause 10 do not apply to any Creations which may not be legally assigned
to CSI pursuant to the provisions of section 2870 of the California Labor Code, or any similar
applicable law.

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Contract of Employment

	10.9	 	The terms and obligations of this Clause 10 shall survive the expiry or termination of your
employment for any reason.
	 
	10.10	 	CSI reserves the right to notify any of your future or prospective employers of the
existence of the provisions of Clause 10.
	 
	11.	 	RESTRICTIONS DURING EMPLOYMENT
	 
	11.1	 	You shall not without CSI’s prior written consent, such consent not to be unreasonably
withheld, during the continuance of this employment, whether during or outside working hours,
directly or indirectly and in whatsoever capacity, engage in, carry on or be interested in, or
be concerned with, or provide services to or for any other business trade or occupation
whatsoever. This obligation does not preclude you from holding, by way of bona fide
investment only, not more than 5% of any class of issued shares or other securities or a 5%
stake in any other business, provided always that such business does not compete in any way,
directly or indirectly, with the business of CSI and your investment in such business does not
prevent you from devoting the whole of your attention and abilities to carrying out your
duties, express and implied, under this Agreement.
	 
	11.2	 	You confirm that you have fully disclosed to CSI (and that you will continue promptly and
fully to do so throughout this employment) all circumstances in respect of which there is or
might be a conflict of interest between yourself (and including within this obligation your
spouse and dependant children) and CSI and/or any Associated Company for which you may from
time to time be required to provide services hereunder.
	 
	11.3	 	You shall not (and shall procure that your spouse and dependant children do not) deal or
become or cease to be interested (within the meaning of Part 1 of Schedule 13 to the Companies
Act 1985) in any shares or debentures of CSI or Associated Company, except in accordance with
the rules of any stock exchange on which CSI’s or any Associated Company’s shares are listed
from time to time or of any share dealing code adopted by CSI.
	 
	12.	 	POST-TERMINATION RESTRICTIONS
	 
	12.1	 	Due to the fact that you will be given access to and/or obtain Confidential Information, as
discussed above, and because CSI conducts business throughout the United States of America,
Western Europe and Japan, to the extent that you seek employment and/or intend to operate or
participate in any enterprise after the termination of your employment with CSI that would
require you to use Confidential Information, you

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Contract of Employment

	 	 	covenant with CSI for itself and as trustee for its Associated Companies that, save as
previously agreed in writing with CSI, you shall not in competition with CSI or any Associated
Company, either on your own account, in conjunction with or on the behalf of any other person,
firm or company, whether directly or indirectly and whether with a view to profit or
otherwise:

	 	12.1.1	 	for a period of 2 years after the termination of your employment with CSI, establish,
develop, carry on or assist in establishing, developing or carrying on, or be concerned
or interested in or be engaged or employed by (whether in the same or similar capacity
to which you were employed with CSI or any Associated Company or in a role that makes
or is reasonably likely to make use of any Confidential Information), any business,
enterprise or venture competing with any part of CSI’s business within the United
States of America, Western Europe and Japan (hereinafter in this Clause called the
“Restricted Area”). For the purpose of this Clause 12.1.1, acts done by you, or any
such competing business, enterprise or venture, outside the Restricted Area shall
nonetheless be deemed to be done within the Restricted Area in breach of this
undertaking where their primary purpose is to engage in business competing with CSI’s
business in the Restricted Area. However, nothing in this Clause 12.1.1 shall prevent
you from holding by way of bona fide investment only, not more than 5% of any class of
issued shares or other securities which are listed or dealt on any recognised
investment exchange;
	 
	 	12.1.2	 	for a period of 2 years after the termination of your employment, for the purposes of
providing goods or services similar to or competing with those of CSI or any Associated
Company, solicit or canvass or entice away (or endeavour to solicit or canvass or
entice away) from CSI or any Associated Company or have any dealings with or accept any
orders from any person, firm or company who was, at any time during the period of 12
months preceding the termination of your employment, a client of CSI or any Associated
Company and with whom during that 12 month period you had business dealings on behalf
of CSI or any Associated Company or about whom you possess Confidential Information by
virtue of your having been employed by CSI;
	 
	 	12.1.3	 	for a period of 2 years, for the purposes of offering services similar to or
competing with those of CSI or any Associated Company, solicit or canvass or deal
with or accept orders from or interfere with CSI’s or any Associated Company’s
dealings with any person, firm or company whom you were soliciting or canvassing or
negotiating with at any time during the period of 12

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Contract of Employment

	 	 	 	months immediately preceding the termination of your employment, on behalf of CSI or any Associated Company with
a view to dealing with them as a client of CSI or any Associated Company or about
whom you possess Confidential Information by virtue of your having been employed by
CSI;

	 	12.1.4	 	for a period of 2 years after the termination of your employment, solicit or canvass
or entice away for the purposes of employment or engagement in a competing business,
enterprise or venture or employ or engage in a competing business, enterprise or
venture in a role that makes or is reasonably likely to make use of Confidential
Information, any director or officer or employee of or consultant to CSI or any
Associated Company and with whom you have worked to a material extent at any time
during the period of 12 months immediately preceding the termination of your employment
or about whom you have obtained Confidential information by virtue of your having been
employed by CSI, whether or not such individual would commit a breach of contract by
reason of leaving his employment or office or engagement with CSI or any Associated
Company; or

	 	12.1.5	 	for a period of 2 years after the termination of your employment, interfere with or
seek to interfere with CSI’s or any Associated Company’s relationship with its
suppliers whom provide supplies that are material to the continuation of CSI’s or any
Associated Company’s business and with whom you were dealing with on behalf of CSI or
any Associated Company at any time during the 12 months preceding the termination of
your employment or about whom’s relationship with CSI or any Associated Company you
possess Confidential Information by virtue of your having been employed by CSI.

	12.2	 	You shall not at any time following the termination of your employment, represent yourself as
being in any way part of or associated with CSI or any Associated Company nor in any way,
whether directly or indirectly, make use of any corporate, trading or product name, in
relation to any business which is identical to or similar to or likely to
be confused with any corporate or trading or product name used by CSI or any Associated
Company or any name which might suggest a connection with CSI or any Associated Company.

	12.3	 	The length of any restriction under this Clause 12 will be reduced by the length of time
immediately preceding termination of employment during any period of notice that you are
required to remain away from work pursuant to Clause 8.2, save that any references to a period
immediately preceding termination of your employment in Clause 12.1 shall

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Contract of Employment

	 	 	be amended to be read as the same period immediately preceding the commencement of the Leave Period in such
circumstances.

	12.4	 	You acknowledge that the duration, extent and application of each of the restrictions in this
Clause 12 are no greater than is necessary to protect the legitimate business interests,
Confidential Information and trade secrets of CSI or any Associated Company, including, but
without limitation, the goodwill, Confidential Information and client connections of CSI or
any Associated Company, and given your position within CSI, are reasonable in the
circumstances of this Agreement.
	 
	12.5	 	The parties to this Agreement agree that each of the undertakings contained in this Clause 12
constitute entirely separate and independent undertakings and if one or more is held to be
unenforceable as an unreasonable restraint of trade or for any other reason, then the
remaining undertakings shall remain valid and insofar as any such undertaking would be
unenforceable as stated, but would be enforceable if the period of application were reduced or
if some part of the undertaking were deleted, the undertaking in question shall apply with
such modifications as may be necessary to make it enforceable and you agree to execute any
further undertaking in such modified terms if requested to do so by CSI.
	 
	12.6	 	You acknowledge that any breach of the undertakings in this Clause 12 may cause CSI
irreparable injury and that monetary damages alone will not be an adequate remedy for any such
breach. In the event of a breach or threatened breach of the said undertakings you agree that
CSI’s remedies shall include immediate injunctive relief to restrain you from breaching the
undertakings.
	 
	12.7	 	CSI reserves the right to notify any of your future or prospective employers of the existence
of the provisions of Clause 12.
	 
	13.	 	ASSOCIATED COMPANY
	 
	 	 	For the purposes of this Agreement, “Associated Company” means a company which is from time
to time a subsidiary of a holding company of CSI or a subsidiary (other than CSI) of a
holding company of CSI and “subsidiary” and “holding” company” have the meanings ascribed to
them by section 736 of the Companies Act 1985 as originally enacted. For the avoidance of
doubt the legislation referred to in this Clause 13 is an act of the parliament of the
United Kingdom in Europe.

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Contract of Employment

	14.	 	TAX
	 
	 	 	All or a portion of the benefits CSI provides may be considered as taxable income by the
IRS. CSI therefore recommends that you contact your personal tax advisor and plan
accordingly.
	 
	15.	 	APPLICABLE LAW AND JURISDICTION
	 
	 	 	Any disputes arising out of or connected to this Agreement or its termination shall be
governed by the law of the State of California and, except as provided in Clause 16 below,
shall be subject to the jurisdiction of the Courts of the State of California. You agree
that personal and subject matter jurisdiction over you and any disputes arising out or
connected with this Agreement exists in the courts of the State of California.
	 
	16.	 	ARBITRATION
	 
	16.1	 	In the event of any dispute or controversy arising from or concerning your employment
relationship with CSI, this Agreement, or the termination of your employment and/or any other
employment relationship between you and CSI, regardless of whether the dispute or controversy
is based on common or statutory law, you and CSI agree that any and all such disputes or
controversies shall be resolved exclusively through binding arbitration in the County of
Ventura, State of California (the “Arbitration”).
	 
	16.2	 	The Arbitration required by this paragraph 1 shall be administered by the Judicial
Arbitration and Mediation Service (“JAMS”) (www.jamsadr.com) before a single neutral
arbitrator, and shall be conducted pursuant to the JAMS Employment Arbitration Rules &
Procedures (“JAMS Rules”) and JAMS Policy on Employment Arbitration Minimum Standards of
Procedural Fairness (“JAMS Policy”) in effect at the time of the commencement of the
arbitration.
	 
	16.3	 	CSI shall be unconditionally responsible for the fees and expenses of the arbitrator in
connection with the Arbitration. However, you shall be responsible for your attorney fees,
should you chose to use an attorney, and any costs required by JAMS, necessary to commence the
Arbitration, if so commenced at the your express request, but in no event shall you be
responsible for any costs beyond what you would be required to incur if you filed a lawsuit
concerning the dispute or controversy in a court of law, although you and CSI hereby expressly
waive the right to file any such lawsuit, with the sole exception of claims for injunctive
relief by you or CSI.
	 
	16.4	 	You and CSI shall have all rights, remedies and defenses available in a civil action for the
dispute or controversy; and you and CSI shall conduct discovery in the Arbitration

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Contract of Employment

	 	 	pursuant to the JAMS Rules, JAMS Policy and any applicable state or federal law to the extent permitted by
the JAMS Rules and/or JAMS Policy.

	16.5	 	The arbitrator shall issue a written award that includes the arbitrator’s essential findings
and conclusions. The prevailing party in the Arbitration shall be entitled to an award of
reasonable attorney fees and costs, and the arbitrator may award attorney fees and costs based
on this provision or as otherwise authorized by California law. Judgment on the award may be
entered in any court of competent jurisdiction.
	 
	16.6	 	Notwithstanding anything to the contrary contained in this paragraph, CSI shall at all times
have and retain the full, complete and unrestricted right to immediate and permanent
injunctive and other relief as provided in this Agreement. Accordingly, you agree that,
notwithstanding the arbitration requirements of this Section 16, CSI shall have the right to
seek immediate judicial enforcement of your obligations under Sections 9, 10 , 11 or 12 in a
court of competent equity jurisdiction, all without the need to post a bond or to prove any
amount of actual damage or to prove that money damages would not be an adequate remedy, it
being acknowledged and agreed by you that any such breach will cause irreparable injury to CSI
and that monetary damages alone will not provide an adequate remedy at law. Nevertheless,
nothing herein shall be construed as prohibiting or precluding CSI from pursuing any other
rights and remedies that may be available to it for any such breach or threatened breach by
you of Sections 9, 10 , 11 or 12 of this Agreement, including, without limitation, monetary
damages
	 
	17.	 	AMENDMENT AND WAIVER
	 
	 	 	No amendment, modification, waiver or consent relating to this Agreement will be effective
unless and until it is embodied in a written document signed by CSI and you.
	 
	18.	 	LEGAL FEES
	 
	 	 	In addition to the provisions set forth in Clause 16 of this Agreement, in any legal action,
lawsuit or other proceeding to enforce any paragraph, term or provision of this Agreement or
to procure adjudication or determination of the rights of you or CSI, the prevailing party
shall be entitled to recover from the other party each and all of the prevailing party’s
actual attorney fees, costs and expenses in connection with such proceeding.

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Contract of Employment

	19.	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one and the same instrument.

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Contract of Employment

This Agreement has been entered into by or on behalf of the parties hereto the day and year first
above written.

	 	 	 	 	 	 	 

	Executed
by
	) 	 	 	 
	 
	CATALYTIC
SOLUTIONS INC.
	) 	 	 	 
	 
	By
	 	 	 	 	 	 
	 

	 	 

	 	 

Director
	 	 
	 
	 	 	 	 	 	 
	And
	 	 	 	 	 	 
	 

	 	 

	 	 

Director/Secretary
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	STEVE GOLDEN    
              
              
              

      

	)	 	 	 

Acknowledgement

State of       
                 
                  
                   

County of      
                
                
                   

On       
                
                   before me,  
                     
       
            (insert name and title of the officer), personally appeared  
                     
                    
                    
                  , (name of
signer(s)) personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

	 	 	 

	Signature

	 	(Seal)

Page 24exv10w2

Exhibit 10.2

                     __, 2010

Hicks Acquisition Company II, Inc.

100 Crescent Court, Suite 1200

Dallas, Texas 75201

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attn: General Counsel

	 	 	 	 	 

	 

	 	Re:
	 	Initial Public Offering

Gentlemen:

          This letter (“Letter Agreement”) is being delivered to you in accordance with the Underwriting
Agreement (the “Underwriting Agreement”) entered into by and between Hicks Acquisition Company II,
Inc., a Delaware corporation (the “Company”) and Citigroup Global Markets Inc., as representative
of the several underwriters (the “Underwriters”), relating to an underwritten initial public
offering (the “Offering”), of 20,000,000 of the Company’s units (the “Units”), each comprised of
one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one
warrant exercisable for one share of the Common Stock (each, a “Warrant”). The Units sold in the
Offering shall be quoted and traded on the Over-the-Counter Bulletin Board pursuant to a
registration statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with the
Securities and Exchange Commission (the “Commission”). Certain capitalized terms used herein are
defined in paragraph 11 hereof.

     In order to induce the Company and the Underwriters to enter into the Underwriting Agreement
and to proceed with the Offering and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Thomas O. Hicks (the “Founder”) and HH-HACII, L.P.
(the “Sponsor”) hereby agree with the Company as follows:

     1. The Sponsor agrees that if the Company seeks stockholder approval of a proposed Business
Combination, then in connection with such proposed Business Combination, it (i) shall vote all
Founder Shares in accordance with the majority of the votes cast by the Public Stockholders and
(ii) shall vote any shares acquired by it in the Offering or the secondary public market in favor
of such proposed Business Combination.

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Hicks Acquisition Company II, Inc.

Citigroup Global Markets Inc.

Page 2

     2. The Founder hereby agrees that in the event that the Company fails to consummate a Business
Combination (as defined in the Underwriting Agreement) within 21 months from the closing of the
Offering, the Founder shall take all reasonable steps to cause the Company to (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible, redeem
100% of the Common Stock, at a per-share price, payable in cash, equal to the aggregate amount
including interest then on deposit in the Trust Account, but net of any taxes payable (less up to
$100,000 of such net interest to pay reasonable expenses of dissolution), divided by the number of
shares of the Common Stock then outstanding, together with the contingent right to receive, in
cash, following the Company’s dissolution, a pro rata share of the balance of the Company’s net
assets, if any, and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve
and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for
claims of creditors and other requirements of applicable law.

     3. Each of the Sponsor and the Founder acknowledge that they have no right, title, interest or claim of
any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the
Company with respect to the Founder Shares. The Sponsor hereby further waives, with respect to any
shares of the Common Stock held by it, any redemption rights it may have in connection with the
consummation of a Business Combination, including, without limitation, any such rights available in
the context of a stockholder vote to approve such Business Combination or in the context of a
tender offer made by the Company to purchase shares of the Common Stock (although the Sponsor shall
be entitled to redemption and liquidation rights with respect to any shares of the Common Stock
(other than the Founder Shares) it holds if the Company fails to consummate a Business Combination
within 21 months from the date of the closing of the Offering).

     4. In the event of the liquidation of the Trust Account, the Founder agrees to indemnify and
hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or threatened, or any
claim whatsoever) to which the Company may become subject as a result of any claim by (i) any third
party for services rendered or products sold to the Company or (ii) a prospective target business
with which the Company has entered into an acquisition agreement with (a “Target”);
provided, however, that such indemnification of the Company by the Founder shall
apply only to the extent necessary to ensure that such claims by a third party for services
rendered
(other than the Company’s independent public accountants) or products sold to the

2

 

Hicks Acquisition Company II, Inc.

Citigroup Global Markets Inc.

Page 3

Company or a Target do not reduce the amount of funds in the Trust Account to below $9.85 per share of the
Common Stock sold in the Offering (the “Offering Shares”) (or approximately $9.83 per Offering
Share if the underwriters’ over-allotment option, as described in the Prospectus, is exercised in
full, or such pro rata amount in between $9.83 and $9.85 per Offering Share that corresponds to the
portion of the over-allotment option that is exercised), and provided, further,
that only if such third party or Target has not executed an agreement waiving claims against and
all rights to seek access to the Trust Account whether or not such agreement is enforceable. In
the event that any such executed waiver is deemed to be unenforceable against such third party, the
Founder shall not be responsible for any liability as a result of any such third party claims.
Notwithstanding any of the foregoing, such indemnification of the Company by the Founder
shall not apply as to any claims under the Company’s obligation to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
The Founder shall have the right to defend against any such claim with counsel of its choice
reasonably satisfactory to the Company if, within 15 days following written receipt of notice of
the claim to the Founder, the Founder notifies the Company in writing that the Founder shall
undertake such defense.

     5. To the extent that the Underwriters do not exercise their over-allotment option to purchase
an additional 3,000,000 shares of the Common Stock (as described in the Prospectus), the Sponsor
agrees that it shall return to the Company for cancellation, at no cost, the number of Founder
Shares held by the Sponsor determined by multiplying 424,285 by a fraction, (i) the numerator of
which is 3,000,000 minus the number of shares of the Common Stock purchased by the Underwriters
upon the exercise of their over-allotment option, and (ii) the
denominator of which is 3,000,000. The Sponsor further agrees that to the extent that (a) the size of the Offering is increased or
decreased and (b) the Sponsor has either purchased or sold shares of the Common Stock or an
adjustment to the number of Founder Shares has been effected by way of a stock split, stock
dividend, reverse stock split, contribution back to capital or otherwise, in each case in connection
with such increase or decrease in the size of the Offering, then (i) the references to 3,000,000 in
the numerator and denominator of the formula in the immediately preceding sentence shall be
changed to a number equal to 15% of the number of shares included in the Units issued in the
Offering and (ii) the reference to 424,285 in the formula set forth in the immediately preceding
sentence shall be adjusted to such number of shares of the Common Stock that the Sponsor would
have to return to the Company in order to hold 12.375% of the Company’s issued and
outstanding shares after the Offering (assuming the Underwriters do not exercise their over-allotment option). In addition, a portion of the Founder Shares in an amount equal to 2.475% of the Company’s issued
and outstanding shares immediately after the Offering, shall be returned to the Company for
cancellation, at no cost, in the event that the last sales price of the Company’s stock does not
equal or exceed $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any
30-trading day period within twenty-four (24) months following the closing of the Company’s initial Business Combination.

     6. (a) In order to minimize potential conflicts of interest that may arise from multiple
corporate affiliations, the Founder agrees that until the earliest of the Company’s initial
Business Combination, liquidation or such time as the Founder ceases to be an officer of the
Company, he shall present to the Company for its consideration, prior to
presentation to any other entity, any business opportunity with an enterprise value of $100 million
or more, subject to any pre-existing fiduciary or contractual obligations he might have.

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          (b) The Founder understands that the Company may effect a Business Combination with a single
target business or multiple target businesses simultaneously and agrees that he shall not
participate in the formation of, or become an officer or director of, any blank check company until
the Company has entered into a definitive agreement regarding its initial Business Combination or
the Company has failed to complete an initial Business Combination within 21 months from the
closing of the Offering; provided, however, that nothing contained herein shall
override the Founder’s fiduciary obligations to any entity with which he is currently directly or
indirectly associated or affiliated or by whom he is currently employed.

          (c) The Founder hereby agrees and acknowledges that (i) each of the Underwriters and the
Company would be irreparably injured in the event of a breach by the Founder of his obligations
under paragraphs 6(a) and/or 6(b) herein, (ii) monetary damages may not be an adequate remedy for
such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition
to any other remedy that such party may have in law or in equity, in the event of such breach.

     7. (a) Until (A) one year after the completion of the Company’s initial Business Combination
or earlier if, subsequent to the Company’s initial Business Combination (such applicable period
being the “Founder Lock-Up Period”), the last sales price of the Common Stock equals or exceeds
$12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after the Company’s initial Business Combination or (B) the Company consummates a subsequent
liquidation, merger, stock exchange or other similar transaction which results in all of the
Company’s stockholders having the right to exchange their shares of Common Stock for cash,
securities or other property, each of the Founder and the Sponsor shall not, except as described in
the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder, with respect to the Founder Shares, (ii)
enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of any of the Founder Shares, whether any such transaction is to be settled by
delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly
announce any intention to effect any transaction specified in clause (i) or (ii).

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          (b) Until 30 days after the completion of the Company’s initial Business Combination (“Sponsor
Lock-Up Period”), each of the Founder and the Sponsor shall not, except as described in the
Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder, with respect to the Sponsor Warrants and the
respective Common Stock underlying the Sponsor Warrants, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of
ownership of any of the Sponsor Warrants and the respective Common Stock underlying the Sponsor
Warrants, whether any such transaction is to be settled by delivery of the Common Stock or such
other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any
transaction specified in clause (i) or (ii).

          (c) Notwithstanding the provisions of paragraphs 7(a) and 7(b) herein, each of the Founder and
the Sponsor may transfer the Founder Shares and/or Sponsor Warrants and the respective Common Stock
underlying the Sponsor Warrants (i) to the Company’s officers or directors, any affiliate or family
member of any of the Company’s officers or directors or any affiliate of the Sponsor or to any
limited partner(s) of the Sponsor; (ii) in the case of the Founder, by gift to a member of the
Founder’s immediate family or to a trust, the beneficiary of which is a member of the Founder’s
immediate family, an affiliate of the Founder or to a charitable organization; (iii) in the case of
the Founder, by virtue of the laws of descent and distribution upon death of the Founder; (iv) in
the case of the Founder, pursuant to a qualified domestic relations order; (v) by virtue of the
laws of the state of Delaware or the Sponsor’s limited partnership agreement upon dissolution of
the Sponsor; (vi) in the event of the Company’s liquidation prior to the completion of the
Company’s initial Business Combination; or (vii) in the event that the Company consummates a
subsequent liquidation, merger, stock exchange or other similar transaction that results in all of
the Company’s stockholders having the right to exchange their shares of the Common Stock for cash,
securities or other property subsequent to the
consummation of the Company’s initial Business Combination; provided, however,
that, in the case of clauses (i) through (iv), these permitted transferees enter into a written
agreement with the Company agreeing to be bound by the transfer restrictions in paragraphs 7(a) and
7(b) herein, as the case may be.

          (d) Further, each of the Founder and the Sponsor agrees that after the Founder Lock-Up Period
or the Sponsor Lock-Up Period, as applicable, has elapsed, the Founder Shares and the Sponsor
Warrants and the respective Common Stock underlying such Warrants, shall only be transferable or
saleable pursuant to a sale registered under

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the Securities Act or pursuant to an available
exemption from registration under the Securities Act. The Company, the Founder and the Sponsor
each acknowledge that pursuant to that certain registration rights agreement to be entered into
between the Company, the Founder and the Sponsor, each of the Founder and the Sponsor may request
that a registration statement relating to the Founder Shares, and the Sponsor Warrants and/or the
shares of the Common Stock underlying the Sponsor Warrants be filed with the Commission prior to
the end of the Founder Lock-Up Period or the Sponsor Lock-Up Period, as the case may be;
provided, however, that such registration statement does not become effective prior
to the end of the Founder Lock-Up Period or the Sponsor Lock-Up Period, as applicable.

          (e) Each of the Founder, the Sponsor and the Company understands and agrees that the transfer
restrictions set forth in this paragraph 7 shall supersede any and all transfer restrictions
relating to (i) the Founder Shares set forth in that certain Securities Purchase Agreement,
effective as of June 15, 2010, by and between the Company and the Sponsor, and (ii) the Sponsor
Warrants set forth in that certain Sponsor Warrants Purchase Agreement, effective as of June 23,
2010, by and between the Company and the Sponsor.

     8. The Founder’s biographical information furnished to the Company and attached here as
Exhibit A is true and accurate in all respects and does not omit any material information
with respect to the Founder’s background. The Founder’s questionnaire furnished to the Company and
attached hereto as Exhibit B is true and accurate in all respects. The Founder represents
and warrants that:

          (a) the Founder is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act or practice
relating to the offering of securities in any jurisdiction;

          (b) the Founder has never been convicted of, or pleaded guilty to, any crime (i) involving
fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii)
pertaining to any dealings in any securities and the Founder is not currently a defendant in any
such criminal proceeding; and

          (c) neither the Founder nor the Sponsor has ever been suspended or expelled from membership in
any securities or commodities exchange or association or had a securities or commodities license or
registration denied, suspended or revoked.

     9. Except as disclosed in the Prospectus, neither the Founder, the Sponsor, any affiliate of
the Founder or the Sponsor, nor any director or officer of the Company,

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shall receive any finder’s
fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other
compensation prior to, or in connection with any services rendered in order to effectuate the
consummation of the Company’s initial Business Combination (regardless of the type of transaction
that it is), other than the following:

          (a) repayment of a $225,000 loan made to the Company by the Founder, pursuant to a Promissory
Note dated June 15, 2010;

          (b) payment of an aggregate of $10,000 per month to Hicks Holdings Operating LLC, an affiliate
of the Founder, for office space, secretarial and administrative services, pursuant to an
Administrative Support Agreement, dated June 23, 2010;

          (c) reimbursement for any reasonable out-of-pocket expenses related to identifying,
investigating and consummating an initial Business Combination, so long as no proceeds of the
Offering held in the Trust Account may be applied to the payment of such expenses prior to the
consummation of a Business Combination, except that the Company may, for purposes of funding its
working capital requirements (including paying such expenses), receive from the Trust Account up to $3,000,000 in interest income
(net of franchise and income taxes payable), in the event the underwriters’ over-allotment option in
the Offering is not exercised in full, or $3,450,000 in interest income (net of franchise and income taxes payable), if the underwriters’ over-allotment option in the Offering is exercised in full
(or, if the over-allotment option is not exercised in full, but is exercised in part, the amount in
interest income (net of franchise and income taxes payable) to be released shall be increased
proportionally in relation to the proportion of the over-allotment option which was exercised); and

          (d) repayment of loans, if any, and on such terms as to be determined by the Company from time
to time, made by the Sponsor or an affiliate of the Sponsor or
certain of the Company’s officers and directors to finance transaction costs in connection with an
intended initial Business Combination, provided, that, if the Company does not consummate an
initial Business Combination, a portion of the working capital held outside the Trust Account may
be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account
are used for such repayment; provided, however, that the Company may, for purposes of funding its
working capital requirements (including repaying such loans), receive from the Trust Account up to $3,000,000 in interest income
(net of taxes payable on such interest), in the event the underwriters’ over-allotment option in
the Offering is not exercised in full, or $3,450,000 in interest income (net of taxes payable on
such interest), if the underwriters’ over-allotment option in the Offering is exercised in full
(or, if the over-allotment option is not exercised in full, but is exercised

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in part, the amount in interest income (net of taxes payable on such interest) to be released shall be increased
proportionally in relation to the proportion of the over-allotment option which was exercised).

     10. Each of the Founder and the Sponsor has full right and power, without violating any
agreement to which he or it is bound (including, without limitation, any non-competition or
non-solicitation agreement with any employer or former employer), to enter into this Letter
Agreement and, in the case of the Founder, to serve as chairman of the board of directors of the
Company, and hereby consents to being named in the Prospectus as an officer and director of the
Company.

     11. As used herein, (i) “Business Combination” shall mean a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination, involving the
Company and one or more businesses; (ii) “Founder Shares” shall mean the 3,285,714 shares of the
Common Stock of the Company acquired by the Sponsor for an aggregate purchase price of $25,000, or
approximately $0.0076 per share , prior to the consummation of the Offering; (iii) “Sponsor
Warrants” shall mean the Warrants to purchase up to 6,666,667 shares of the Common Stock of the
Company that are acquired by the Sponsor for an aggregate purchase price of $5 million, or
approximately $0.75 per Warrant in a private placement that shall occur simultaneously with the
consummation of the Offering; (iv) “Public Stockholders” shall mean the holders of securities
issued in the Offering; and (v) “Trust Account” shall mean the trust fund into which a portion of
the net proceeds of the Offering shall be deposited.

     12. This Letter Agreement, and the exhibits thereto, constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and supersede all prior
understandings, agreements, or representations by or among the parties hereto, written or oral, to
the extent they relate in any way to the subject matter
hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended,
modified or waived (other than to correct a typographical error) as to any particular provision,
except by a written instrument executed by all parties hereto.

     13. No party hereto may assign either this Letter Agreement or any of its rights, interests,
or obligations hereunder without the prior written consent of the other party. Any purported
assignment in violation of this paragraph shall be void and ineffectual and shall not operate to
transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be
binding on each of the Founder and the Sponsor and each of their respective successors, heirs,
personal representatives and assigns.

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     14. This Letter Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Texas, without giving effect to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction. The parities hereto (i)
all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to,
this Letter Agreement shall be brought and enforced in the courts of Dallas County, in the State of
Texas, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall
be exclusive and (ii) waives any objection to such exclusive jurisdiction and venue or that such
courts represent an inconvenient forum.

     15. Any notice, consent or request to be given in connection with any of the terms or
provisions of this Letter Agreement shall be in writing and shall be sent by express mail or
similar private courier service, by certified mail (return receipt requested), by hand delivery or
facsimile transmission.

     16. This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder
Lock-up Period or the Sponsor Lock-Up Period, whichever is longer, or (ii) the liquidation of the
Company; provided, however, that this Letter Agreement shall earlier terminate in
the event that the Offering is not consummated and closed by December 31, 2010, provided
further that paragraph 4 of this Letter Agreement shall survive such liquidation.

[Signature page follows]

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Page 10

	 	 	 	 	 
	 	Sincerely,

HH-HACII, L.P.

 	 
	 	By:  	HH-HACII GP, LLC, its general partner
 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Thomas O. Hicks 	 
	 	 	Manager 	 

	 	 	 	 	 
	 	  	
 	 
	 	 	Thomas O. Hicks 	 
	 	 	 	 
	 

Acknowledged and Agreed:

	 	 	 	 	 
	HICKS ACQUISITION COMPANY II, INC.

 	 
	By:  	 	 
	 	Robert M. Swartz 	 
	 	President and Chief Executive Officer 	 

10

 

	 	 	 	 	 

Exhibit A

(Attached)

11

 

Exhibit B

(Attached)

12

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