LOCK-UP AGREEMENT


 


__________, 20__


 


Quartet Merger Corp.


777 Third Avenue, 37th Floor


New York, New York 10017


 


Pangaea Logistics Solutions Holding Ltd.


109 Long Wharf, 2nd Floor


Newport, RI 02840


Attention: Edward Coll


 


Ladies and Gentlemen:


 


In connection with
the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of April 30, 2014, by and among Quartet
Merger Corp. (“Quartet”), Quartet Holdco Ltd. (“Holdco”), Quartet Merger Sub, Ltd., Pangaea Logistics Solutions
Ltd. (“Company”) and the securityholders of the Company, to induce the parties to consummate the transactions contemplated
by the Merger Agreement, the undersigned agrees not to, either directly or indirectly, during the “Restricted Period”
(as hereinafter defined):


 


		(1)	sell or offer or contract to sell or offer, grant any option or warrant for the sale of, assign,
transfer, pledge, hypothecate, or otherwise encumber or dispose of (all being referred to as a “Transfer”) any legal
or beneficial interest in any shares of Holdco Stock, issued or to be issued to the undersigned or to any other person or entity
of which the undersigned is an Affiliate (as defined below), in each case in connection with the transactions contemplated by the
Merger Agreement, including without limitation the Net Income Shares and Cancellation Shares (the “Restricted Securities”);
for the avoidance of doubt, if any Holdco Stock is acquired by the undersigned after the Closing Date in any open-market transaction,
such Holdco Stock shall not be deemed a “Restricted Security” hereunder,



 


		(2)	enter into any swap or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of any of the Restricted Securities, whether such swap transaction
is to be settled by delivery of any Restricted Securities or other securities of any person, in cash or otherwise, or



 


		(3)	publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into
any transaction, swap, hedge or other arrangement relating to any of the Restricted Securities (it being understood that the foregoing
shall not prohibit the undersigned from making any such disclosure to the undersigned’s existing or potential shareholders,
members, partners, Affiliates, general partners, directors, officers, employees or partners, and their respective shareholders,
members, partners, Affiliates, general partners, directors, officers, employees or partners, in each case on a confidential basis).



 




    	 



    	 



    

 


As used herein, “Restricted Period”
means the period commencing on the Closing Date and (A) with respect to 50% of such Restricted Securities, ending on the earlier
of (i) the date on which the Closing Price of the shares of Holdco Stock exceeds $12.50 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period following
the Closing Date and (ii) the day preceding the day that is twelve months after the Closing Date and (B) with respect to the remaining
50% of such Restricted Securities, ending on the day preceding the day that is twelve months after the Closing Date; provided,
however, the Restricted Period shall terminate immediately prior to the consummation of a liquidation, merger, stock exchange
or other similar transaction that results in any HoldCo stockholder having the right to exchange their shares of Holdco Stock for
cash, securities or other property (including pursuant to an acceptance of a general offer for Restricted Securities made to all
holders of such class of securities on equal terms or provision of an irrevocable undertaking to accept such an offer).


 


For purposes of this
Lock-Up Agreement, “Closing Price” means, with respect to the Restricted Securities, as of the date of determination,
(i) if the Restricted Securities are listed on a national securities exchange, the closing price per share of a Restricted Security
officially reported on the principal national securities exchange on which the Restricted Securities are then listed or admitted
to trading; or (ii) if the Restricted Securities are not then listed or admitted to trading on any national securities exchange,
the average of the reported closing bid and asked prices of the Restricted Securities on such date on the principal over the counter
market on which the Restricted Securities are traded; or (iii) if neither of clause (i) or (ii) is applicable, a market price per
share determined in good faith by the Holdco Board or, if such determination is not satisfactory to the undersigned for whom such
determination is being made, by a nationally recognized investment banking firm mutually selected by Holdco and the undersigned,
the expenses for which shall be borne equally by Holdco and the undersigned. If trading is conducted on a continuous basis on any
exchange, then the closing price shall be at 4:00 P.M. New York City time


 


Notwithstanding the
foregoing limitations, this Lock-Up Agreement will not prevent any Transfer of any or all of the Restricted Securities, either
during the undersigned’s lifetime or on the undersigned’s death (in the event the undersigned is an individual rather
than an entity), (i) in a transaction that does not involve a Public Offering or is not made through a securities exchange or an
over-the-counter securities market, or (ii) by gift, will or intestate succession, or by judicial decree, to the undersigned’s
beneficiaries or “family members” (as defined below), as applicable, or to trusts, corporations, partnerships, limited
liability companies, family limited partnerships and similar entities primarily for the benefit of the undersigned or the undersigned’s
“family members” or executives of Holdco or any controlled subsidiary of Holdco; provided, however, that in each and
any such event it shall be a condition to the Transfer that the transferee execute an agreement stating that the transferee is
receiving and holding the Restricted Securities subject to the provisions of this Lock-Up Agreement. For purposes of this sub-paragraph,
“family member” shall mean any relationship by blood, marriage or adoption, including, but not limited to, spouse,
lineal descendants, stepchildren, father, mother, brother or sister of the transferor or of the transferor’s spouse. For
purposes of this Lock-Up Agreement, “Public Offering” means an underwritten public offering of registrable securities
pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form
S-4 or Form S-8 or any similar or successor form.


 


Also notwithstanding
the foregoing limitations, in the event the undersigned is an entity rather than an individual, this Lock-Up Agreement will not
prevent any Transfer of any or all of the Restricted Securities to the shareholders, members, Affiliates, directors, officers,
employees or partners of such entity or any Affiliate of the foregoing or Holdco or any controlled subsidiary of Holdco; provided,
however, that in each and any such event it shall be a condition to the Transfer that the transferee execute an agreement stating
that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Lock-Up Agreement.


 


Any of the Restricted
Securities subject to this Lock-Up Agreement may be released, from time to time, in whole or part from the terms hereof upon the
unanimous written consent of the disinterested members of the Holdco Board (provided the shares of Holdco Stock held by the Quartet
Founding Shareholders are similarly released from all restrictions on transfer then applicable to such shares).


 




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The undersigned hereby
authorizes Holdco’s transfer agent to apply to any certificates representing Restricted Securities issued to the undersigned
an appropriate legend to reflect the existence and general terms of this Lock-up Agreement.


 


This Lock-up Agreement
will be legally binding on the undersigned and on the undersigned’s successors and permitted assigns, and is executed as
an instrument governed by the law of Delaware.


 


This Lock-Up Agreement
shall automatically terminate and be of no further force or effect upon the earlier to occur of (i) the termination of the Merger
Agreement and (ii) the first Business Day following the expiration of the Restricted Period.


 


All capitalized terms
used herein, but not otherwise defined, shall have the meaning ascribed to them in the Merger Agreement. This Lock-Up Agreement
constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Lock-Up Agreement, including without limitation that certain letter agreement dated
as of March 20, 2014 by and between Quartet and Cartesian Capital Group, LLC. Sections 10.1 – 10.4, 10.8 – 10.15 of
the Merger Agreement are incorporated herein by reference and shall apply to this Lock-Up Agreement mutatis mutandis. Each
of the parties to this Lock-Up Agreement agrees to use its reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other parties to this Lock-Up Agreement in doing, all things
necessary, in the most expeditious manner practicable to carry out or to perform the provisions of this Lock-Up Agreement


 


[Signature page follows]


 




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SIGNATURE PAGE TO THE LOCK-UP AGREEMENT


 


	 	 
	Signature	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Address: 	 	 
	 	 	 
	 	 


 




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