May 2, 2008 Kentucky USA Energy, Inc. Santa Barbara, CA 93101 Attention: Christopher Greenwood, President Dear Sir:
Exhibit
10.4
May 2,
2008
000 X.
Xxxxxxxxx Xx.
Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx
Xxxxxxxxx, President
Dear
Sir:
Reference
is made to the Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”) by and among KY USA Energy, Inc., a Kentucky corporation (“KY USA”),
Kentucky USA Energy, Inc., a Delaware corporation (the “Company”), and KY
Acquisition Corp., a Kentucky corporation and a wholly owned subsidiary of the
Company (the “Transactions”). In connection with the Merger
Agreement, KY USA stockholders shall receive common stock, par value $0.0001 per
share, of the Company (the “Common Stock”) in consideration for shares of KY USA
held by them at the effective time of the merger. In consideration of
the Company and KY USA entering into the Merger Agreement, the undersigned
hereby agrees as follows:
1. The
undersigned hereby covenants and agrees, except as provided herein, not to (a)
offer, sell, contract to sell, grant any option to
purchase, hypothecate, pledge, or otherwise dispose of or (b) transfer title to (a “Prohibited Sale”)
any of the shares (the “Acquired Shares”) of Common Stock acquired by the
undersigned pursuant to or in connection with the Merger Agreement, during the
period commencing on the “Closing Date” (as that term will be defined in the
Merger Agreement) and ending on the 24-month anniversary of the Closing Date
(the “Lockup Period”), without the prior written consent of the
Company. Notwithstanding the foregoing, the undersigned shall be
permitted from time to time during the Lockup Period, without the prior written
consent of the Company, as applicable, (i) to engage in transactions in
connection with the undersigned’s participation in the Company’s stock option
plans, (ii) to transfer all or any part of the Acquired Shares to any family
member, for estate planning purposes, or to
an affiliate thereof (as such term is defined in Rule 405 under the Securities
Exchange Act of 1934, as amended), provided that such transferee agrees in writing with the Company to be bound hereby,
or (iii) to
participate in any transaction in which holders of the Common Stock of
the Company participate or have the opportunity to participate pro rata,
including, without limitation, a merger, consolidation or binding share exchange
involving the Company, a disposition of the Common Stock in connection with the
exercise of any rights, warrants or other securities distributed to the
Company’s stockholders, or a tender or exchange offer for the Common Stock, and
no transaction contemplated by the foregoing clauses (i), (ii) or (iii) shall be
deemed a Prohibited Sale for purposes of this Letter Agreement.
2. This
Letter Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware.
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3. This
Letter Agreement will become a binding agreement among the undersigned as of the
Closing Date. In the event that no closing occurs under the Merger
Agreement, this Letter Agreement shall be null and void. This Letter
Agreement (and the agreements reflected herein) may be terminated by the mutual
agreement of the Company and the undersigned, and if not sooner terminated, will
terminate upon the expiration date of the Lockup Period. This Letter
Agreement may be duly executed by facsimile and in any number of counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed to constitute one and the same instrument. Signature pages
from separate identical counterparts may be combined with the same effect as if
the parties signing such signature page had signed the same
counterpart. This Letter Agreement may be modified or waived only by
a separate writing signed by each of the parties hereto expressly so modifying
or waiving such agreement.
| Very truly yours, | |||
|
|
By:
|
/s/ | |
| Print Name: | |||
| Address: | |||
| Number of shares of Common Stock owned: | |||
| Certificate Numbers: | |||
| Accepted and Agreed to: | |||
[Company
signature on the following page]
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By: ___________________________
Xxxxxxxxxxx
Xxxxxxxxx, President
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