LOCK UP LETTER AGREEMENT
_______________
___, 200__
Malibu
Minerals, Inc.
Suite
0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
X0X 0X0
Flex
Fuels Energy Limited
X/X
Xxxxxx & Xxxxxxxx
00
Xx.
Xxxx Xxx
Xxxxxx
XX0X 0XX
Ladies
and Gentlemen:
The
undersigned understands that Flex Fuels Energy Limited (“Flex Fuels”) has agreed
to be acquired by Malibu Minerals, Inc. (the “Company”), pursuant to the
Acquisition Agreement dated December ___, 2006 entered into by and among Flex
Fuels, the Company and the shareholders signatory thereto (the “Agreement”).
In
consideration of the foregoing, and in order to induce Flex Fuels to enter
into
the Agreement, and for other good and valuable consideration receipt of which
is
hereby acknowledged, the undersigned hereby agrees that, the undersigned will
not, during the period beginning on the date of the Agreement and ending on
the
date 12 months after the Completion Date (as defined in the Agreement), (1)
offer, pledge, announce the intention to sell, sell, contract to sell, sell
any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose
of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (including without
limitation, Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities
and
Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant), or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership
of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities,
in
cash or otherwise.
Notwithstanding
the foregoing, the restrictions set forth in clause (1) and (2) above shall
not
apply to (a) transfers (i) as a bona
fide
gift or
gifts, or (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned; provided, however,
that
in any such case it shall be a condition to such transfer that the donee or
donees thereof or the trustee of the trust, as applicable, execute and deliver
to the Company an agreement stating that the transferee is receiving and holding
the shares of Common Stock subject to the provisions of this letter agreement,
that there shall
be
no further transfer of such shares of Common Stock except in accordance with
this letter agreement, and that any such transfer shall not involve a
disposition for value, or (b) the acquisition or exercise of any stock option
issued pursuant to the Company’s existing stock option plan or employment
agreements, including any exercise effected by the delivery of Securities of
the
Company held by the undersigned. For purposes of this Letter Agreement,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. None of the restrictions set forth in this
Letter Agreement shall apply to Common Stock acquired in open market
transactions. Notwithstanding any of the foregoing, the restrictions set forth
in clause (1) and (2) above shall not apply to the undersigned in the event
of a
Change of Control transaction with the exception of the transaction contemplated
under the Agreement. Change of Control shall have the definition set forth
on
Exhibit A to this Letter Agreement
1
The
undersigned further acknowledges that the undersigned has also entered into
or
intends to enter into a Voting Trust Agreement (the “Voting Trust Agreement”)
with Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP (“SRFF”) and has transferred and
deposited or intends to transfer and deposit the certificates evidencing the
number of shares of common stock of the Company held by the undersigned, as
set
forth opposite the undersigned’s name on Exhibit A of the Voting Trust
Agreement, to SRFF for the purposes of giving SRFF, or a person appointed by
SRFF for such purpose, the right to vote during the 12 month period from the
Completion Date, the Shares held by the undersigned in favor of any resolution
presented to all of the shareholders of the Company in accordance with the
directions of the Majority Directors (as defined in the Voting Trust Agreement).
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Letter Agreement. All authority herein
conferred or agreed to be conferred and any obligations of the undersigned
shall
be binding upon the successors, assigns, heirs or personal representatives
of
the undersigned.
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2
This
lock-up agreement shall be governed by and construed in accordance with the
laws
of the State of New York, without regard to the conflict of laws principles
thereof.
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Very
truly yours,
NAME
OF
SHAREHOLDER:
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| By: | /s/ | |
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Number
of Shares of Voting
Stock
Beneficially Owned: ________
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Accepted
as of the date
first
set
forth above:
| By: | |||
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| Name Title |
Accepted
as of the date
first
set
forth above:
FLEX
FUELS ENERGY LIMITED
| By: | |||
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| Name Title |
3
EXHIBIT
A
DEFINITION
OF “CHANGE OF CONTROL”
a) Change
of Control.
Each of
the following events shall constitute a “Change of Control”:
(i) the
consolidation, merger or other business combination (including, without
limitation, a reorganization or recapitalization) of the Company with or into
another Person (other than (A) a consolidation, merger or other business
combination (including, without limitation, reorganization or recapitalization)
in which holders of the Company’s voting power immediately prior to the
transaction continue after the transaction to hold, directly or indirectly,
the
voting power of the surviving entity or entities necessary to elect a majority
of the members of the board of directors (or their equivalent if other than
a
corporation) of such entity or entities, or (B) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation
of
the Company);
(ii) the
sale
or transfer of all or substantially all of the Company’s assets; or
(iii) a
purchase, tender or exchange consummated pursuant to an offer made to and
accepted by a sufficient number of holders of the outstanding shares of Common
Stock such that after consummation of such purchase, tender or exchange, the
Person or group of Persons proposing such purchase, tender or exchange
beneficially own 50% or more of the outstanding Common Stock.
b) Person.
“Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency
thereof.
