LOCK-UP AGREEMENT
THIS LOCK-UP made as of the 16Th day of
September, 2004.
AMONG:
SERVICE AIR GROUP, INC., a New Jersey company whose address is
13093 - 88th Avenue, Surrey, BC, Canada V3W 3K4
(hereinafter referred to as "SAG")
OF THE FIRST PART
AND:
SERVICE AIR GROUP (CANADA) INC., a British Columbia company
whose
address is 5455 Airport Road South, Richmond, BC, Canada V7B
1B5
(hereinafter referred to as "SAG Canada")
OF THE SECOND PART
AND:
Certain shareholders of SAG set forth in Schedule "A" hereto
(herein collectively referred to as the "Shareholders")
OF THE THIRD PART
A. SAG has agreed to acquire
certain assets from SAG Canada in exchange for
the issuance of
4,125,000 common shares of SAG pursuant to the terms of an
Agreement for
Exchange of Stock for Assets, dated September 08, 2004 (the
"Exchange
Agreement");
B. SAG Canada has transferred
all of the SAG shares acquired under the
Exchange
Agreement to the Shareholders;
C. Each Shareholder is the
registered and beneficial owner of that number of
Shareholder's
Shares (as hereinafter defined) set forth in Schedule "A"
opposite such
Shareholder's name; and
D. As a condition of receiving
their respective Shareholder's Shares, each
Shareholder is
willing to enter into this Lock-Up Agreement on the terms
and conditions
hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSETH
THAT in consideration of the above
premises and of the covenants, agreements,
representations and warranties
hereinafter set forth, it is hereby agreed
as follows:
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1. Definitions
-----------
1.1 In this Agreement, unless there is
something in the subject or context
inconsistent
therewith, words importing the singular number shall include
the plural and
vice versa, words importing the masculine gender shall
include the
feminine and neuter genders and the expressions following shall
have the
following meanings, respectively:
(a) "Person" means a natural person,
firm, corporation, trust,
partnership, joint venture, governmental body, agency or
association;
(b) "Public Record" means the publicly
available information filed by SAG
with the Securities and Exchange Commission;
(c) "SAG Shares" means some or all, as
the context may require, of the
issued and outstanding common shares in the capital of SAG; and
(d) "Shareholder's Shares" means the
SAG Shares transferred to the
Shareholders by SAG Canada and currently owned by the
Shareholders.
2. Lock-Up Arrangements and
Shareholder Covenants
----------------------------------------------
2.1 Each Shareholder severally
covenants and agrees with SAG that until the
earlier of one
year from the date of this Agreement, or the termination of
this Agreement
pursuant to Section 6 hereof, he or she will not, without
the prior
consent of SAG, sell, assign, transfer or otherwise convey or
mortgage, pledge
or hypothecate any of the Shareholders' Shares, or the
Shareholder's
interest therein.
3. Acknowledgements
----------------
3.1 SAG Canada and each Shareholder
acknowledges that:
(a) this Agreement was prepared by
Clark, Wilson for SAG;
(b) Clark, Wilson received
instructions from SAG and does not represent
SAG Canada or any of the Shareholders; and
(c) SAG Canada and each Shareholder
have been given adequate time to
obtain independent legal advice on this Agreement prior to its
execution and delivery.
3.2 SAG, SAG Canada and each
Shareholder severally acknowledges and agrees
that:
(a) the Shareholders have received
their respective Shareholder's Shares
in satisfaction and settlement of certain amounts due to them by
SAG
Canada as a result of funds invested and/or services provided by
the
Shareholders to SAG Canada; and
(b) the terms and conditions of this
Agreement shall be subject to such
reasonable amendments as may be necessary to give full effect to
the
intentions of the parties.
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-3-
4. Representations and
Warranties of Each Shareholder
--------------------------------------------------
4.1 In order to induce SAG to enter
into this Agreement and to consummate the
transactions
contemplated by this Agreement, each Shareholder does hereby
severally
represent and warrant to SAG as follows:
(a) the Shareholder is the legal and
beneficial owner of the number of
Shareholder's Shares set forth opposite such Shareholder's name
in
Schedule "A" hereto, and such Shareholder's Shares are fully paid
and
non-assessable, and are free of any liens, claims, charges,
security
interests or encumbrances of any kind whatsoever; and
(b) this Agreement, when duly and
properly executed and delivered by the
Shareholder and the other parties thereto, will be valid, binding
and
enforceable against the Shareholder in accordance with its
terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or
affecting
creditor' rights generally and subject to general principles of
equity.
5. Representations and
Warranties of SAG
-------------------------------------
5.1 In order to induce SAG Canada and
each Shareholder to enter into this
Agreement and to
consummate the transactions contemplated by this
Agreement, SAG
represents and warrants to SAG Canada and each Shareholder
as follows:
(a) SAG is duly incorporated and in
good standing under the laws of the
State of New Jersey;
(b) SAG has the requisite power,
capacity and authority to enter into this
Agreement;
(c) the documents filed by or on
behalf of SAG in the Public Record were
true and
correct in all material respects at the time they were filed
and, at such time, none of these documents contained any untrue
statement of any materi
