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
00000 - 00xx Xxxxxx, Xxxxxx, XX, Xxxxxx X0X 0X0
(hereinafter referred to as "SAG")
OF THE FIRST PART
AND:
SERVICE AIR GROUP (CANADA) INC., a British Columbia company whose
address is 0000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxx, XX, Xxxxxx X0X 0X0
(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 Xxxxx, Xxxxxx for SAG;
(b) Xxxxx, Xxxxxx 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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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 material fact nor did they omit to state a material
fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; and
(d) SAG has no debts, claims, encumbrances of any nature whatsoever except
as set forth in the Public Record.
6. Termination
-----------
6.1 This Agreement may be terminated by written notice given to the other party
hereto, at any time prior to completion of the Transaction:
(a) by mutual written consent of the parties hereto;
(b) by either SAG or SAG Canada if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and non-appealable,
provided that the party seeking to terminate this Agreement shall have
used all commercially reasonable commercial efforts to remove such
order, decree, ruling or injunction.
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In the event of termination of this Agreement, each of the parties shall
forthwith return to the other all confidential and other information
relating to such other party.
7. Further Assurances
------------------
7.1 The parties hereto agree to execute, acknowledge and deliver such other
instruments and take such other action as may be necessary to carry out
their respective obligations under this Agreement.
8. Construction
------------
8.1 This Agreement shall be, in all respects, subject to and interpreted,
construed and enforced in accordance with the laws in effect in the
Province of British Columbia. Each party hereto accepts the jurisdiction of
the Courts of the Province of British Columbia and attorns exclusively to
their jurisdiction.
9. Notices
-------
9.1 All notices, requests, and demands hereunder shall be in writing and shall
be deemed to have been duly given if delivered by hand or by
telecommunication as follows:
(a) to SAG:
Service Air Group, Inc.
00000 - 00xx Xxxxxx, Xxxxxx,
XX, Xxxxxx X0X 0X0
Attention: Xxxxxxxx Xxxxxx
---------------------------
with a copy to:
Xxxxx, Xxxxxx
Barristers & Solicitors
000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
--------------------------------
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(b) to the Shareholders at their respective addresses set forth in
Schedule "A"
(c) to SAG Canada:
Service Air Group (Canada) Inc.
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX
Xxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Jag Xxxxxxx
-----------------------
or to such other address or telecopier number as may be given in writing by
SAG or a Shareholder, and all notices, requests, and demands hereunder
shall be deemed to have been received, if delivered, on the date of
delivery and if transmitted, on the date of the transmission if received
during normal business hours, or if otherwise, on the next Business Day.
10. Assignment
----------
10.1 This Agreement shall not be assigned without the written consent of the
other parties hereto, and such consent may be arbitrarily and unreasonably
withheld.
10.2 This Agreement shall enure to the benefit of and shall be binding upon the
parties and their respective successors, heirs, executors, administrators
and permitted assigns.
11. Costs
-----
11.1 Each party will pay for their respective costs incurred pursuant to this
Agreement, whether or not the transactions contemplated hereby are
completed.
12. General
-------
12.1 Time shall be of the essence of this Agreement.
12.2 This Agreement together with any and all agreements, documents and
instruments to be entered and delivered herewith constitute the entire
agreement between the parties and shall supersede all previous oral or
written communications.
12.3 This Agreement may be executed in separate counterparts, and all such
executed counterparts when taken together shall constitute one (1)
Agreement. The parties shall be entitled to rely on delivery of a facsimile
copy of the executed Agreement and such facsimile copy shall be legally
effective to create a valid and binding Agreement.
12.4 In the event that any provisions contained in this Agreement shall be
declared invalid, illegal or unenforceable by a court or other lawful
authority of competent jurisdiction, this Agreement shall continue in force
with respect to the enforceable provisions and all rights and remedies
accrued under the enforceable provisions shall survive any such
declaration, and any non-enforceable provision shall to the extent
permitted by law be replaced by a provision which, being valid, comes
closest to the intention underlying the invalid, illegal and unenforceable
provision.
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12.5 The parties will advise each other, in advance, of any public statement
which they propose to make in respect of the transaction contemplated
herein, provided that no party shall be prevented from making any
disclosure statement which is required to be made by law or any rule of a
stock exchange or similar organization to which it is bound. Neither party
will make any public statement if any of the applicable securities laws,
rules or regulations prohibit publication.
IN WITNESS WHEREOF the parties hereto have executed this Agreement to be
effective as of the date first above written.
SERVICE AIR GROUP INC. (NJ, USA)
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Chief Financial Officer
SERVICE AIR GROUP INC. (BC, CANADA)
By: /s/ Jag Xxxxxxx
-----------------------------------------
Chief Executive Officer
SIGNED, SEALED and DELIVERED by
Mr. Jag Xxxxxxx (President/CEO) in the presence
of: Xx. Xxxxxxxx Xxxxxx (CFO).
SCHEDULE "A"
LIST OF SHAREHOLDERS
----------------------- -------------------------------------------------------------------- ----------------
Number of
Name and Address of Shareholder Shares Held
----------------------- -------------------------------------------------------------------- ----------------
Xxxx Xxxxxx #000-0000-000Xx Xxxxxx, Xxxxxx, XX, Xxxxxx X0X 0X0 23,462
----------------------- -------------------------------------------------------------------- -------------
Xxxxxx Xxxxxx 0000 Xxxxxx xxxxxx Xxxxxx, Xxxxxxxxx, XX, Xxxxxx X0X 0X0 7,692
----------------------- -------------------------------------------------------------------- -------------
Xxxxx Xxxxxxxxxx #00-0000 Xxxxxxxxx Xxxxx Xxxxxxxx, XX, Xxxxxx X0X 0X0 7,692
----------------------- -------------------------------------------------------------------- -------------
Xxxx Xxx #305-1859 Spyglass, Xxxxxxxxx, XX, Xxxxxx X0X 0X0 38,462
----------------------- -------------------------------------------------------------------- -------------
Xxxxxxx Xxx 000 Xxxx 00Xx Xxx. Xxxxxxxxx, XX, Xxxxxx, X0X 0X0 112,723
----------------------- -------------------------------------------------------------------- -------------
Xxxxx Xxxxxx 00000-00Xx Xxx. Xxxxxx, XX, Xxxxxx X0X 0X0 76,923
----------------------- -------------------------------------------------------------------- -------------
Xxxxx Xxxxxxxxx 0000 Xxxxxx Xxxxx, Xxxxxx, XX, Xxxxxx X0X 0X0 15,385
----------------------- -------------------------------------------------------------------- -------------
Xxxxxx Xxxxxxxxx 0000 Xxxxx Xxxxx, Xxxxx, XX, Xxxxxx, X0X 0X0 38,462
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Xxxx Xxxxxxx 0000-Xxxxx Xxxx Xxxx, Xxx Xxxxxxxxxxxx, XX, Xxxxxx X0X 0X0 76,923
----------------------- -------------------------------------------------------------------- -------------
Xxxxx Xxxxx 00000-00x Xxx. Xxxxxx, XX, Xxxxxx X0X 0X0 23,077
----------------------- -------------------------------------------------------------------- -------------
Xxxxx Xxxxx 0000 Xxxxxxxxx Xxx. Xxxxxxxx, XX, Xxxxxx X0X 0X0 7,692
----------------------- -------------------------------------------------------------------- -------------
Xxxxxx Xxxxxxxx 0000 Xxxx xxxx Xxxx, Xxxxxx, XX, Xxxxxx X0X 0X0 153,846
----------------------- -------------------------------------------------------------------- -------------
Jag Xxxxxx 0000-00Xx Xxxxxx, Xxxxx, XX, X0X 0X0 3,542,661
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