Exhibit 10.04

FORM OF LOCK-UP AGREEMENT

______________, 2011

Beaufort International Associates Limited
49 Whitehall, London, SW1A 2BX
United Kingdom

Nicquel Limited
International House, The Parade
St. Heller
Jersey JE2 3QQ
Channel Islands

Ladies and Gentlemen:

The undersigned understands and hereby acknowledges that Pegasi Energy Resources
Corporation, a Nevada corporation (the “Company”), has engaged Beaufort
International Associates Limited and Nicquel Limited (collectively, the
“Agents”), as the Company’s placement agents in connection with the sale of
units (the "Units"), each Unit consisting of (i) two common shares of the
Company, par value $0.001 per share (the “Common Stock”), and (ii) a warrant to
purchase one share of Common Stock, on a "best efforts," minimum/maximum basis a
minimum of $5,000,000 of Units and up to $10,000,000 of Units (the “Offering”),
through a private placement pursuant to the exemptions from registration
provided in Regulation S under the Securities Act of 1933, as amended (the
“Securities Act”), and the rules and regulations promulgated thereunder.

In order to induce the Agents to proceed with the Offering, and to induce
purchasers to purchase the Units, the undersigned hereby agrees that, should the
Offering be consummated through the sale of at least the minimum Offering, for
the period of time commencing on the date of the last closing of the Offering
(the “Closing Date”) until the date that is six months after the Closing Date
(the “Restricted Period”), the undersigned will not offer, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of the Company’s Common Stock or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, shares of Common Stock or other securities of the Company,
including, without limitation, any shares of the Company’s Common Stock issuable
pursuant to the terms of any stock options or warrants; provided, that the
foregoing restriction shall not apply to shares of Common Stock of the Company
that are transferred other than pursuant to a sale in the public market, and
then only if the transferee has, prior to such transfer, delivered to the Agents
the transferee’s written agreement to be bound by the terms of this lock-up
agreement.  The undersigned hereby agrees that the Company may impose
stop-transfer instructions with respect to the securities of the Company owned
beneficially or of record by the undersigned until the end of the Restricted
Period.  Notwithstanding the foregoing, this lock-up agreement shall not apply
to shares of Common Stock currently owned by the undersigned and sold pursuant
to Rule 144 of the Securities Act.

 
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It is understood that the undersigned shall be released from all obligations
under this letter if the engagement letter between the Company and the Agents
with respect to the Offering is terminated prior to consummation of the
Offering.

This letter agreement shall be governed by, and construed in accordance with,
the laws of the State of Texas without giving effect to conflict of law
principles thereof.
 
 

     
Very truly yours,
                  Date:           
Signature
                     
Print Name
                     
Title
 

 
 
 
 
 
 
 
 
 
 
 
 
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