Document:

Unassociated Document

    SHAREHOLDER
LOCK-UP AGREEMENT

     

    THIS
AGREEMENT (this “Agreement”) is dated
as of November 30, 2009 by and between Sino Gas International Holdings, Inc., a
Utah corporation (the “Company”), and the
persons set forth on the signature pages hereto (each a “Management
Shareholder” and collectively, the “Management
Shareholders”).  Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Securities Purchase
Agreement.

     

    WHEREAS,
the Company intends to enter into a private placement financing transaction with
certain accredited investors (the “Purchasers”) whereby
the Company will sell and issue to the Purchasers, the Company’s 8% Senior
Secured Convertible Notes in the aggregate principal amount of up to Ten Million
United States dollars (“Dollars”)
($10,000,000), subject to a twenty percent (20%) over-allotment in the Company’s
sole discretion.

    

    WHEREAS,
in connection with the Financing Transaction, the Company entered into a
Securities Purchase Agreement, dated as of the date hereof (the “Securities Purchase
Agreement”), by and among the Company and the Purchasers, and certain
other papers, agreements, documents, instruments and certificates necessary to
carry out the purposes thereof (collectively, the “Transaction
Documents”).

    

    WHEREAS,
in order to induce the Company and the Purchasers to enter into the Financing
Transaction, the Management Shareholders have agreed not to sell any shares of
the Company’s Common Stock that such Management Shareholders presently own on
the date hereof, or may acquire on or after the date hereof, except in
accordance with the terms and conditions set forth herein (collectively, the
“Lock-Up
Shares”).

     

    NOW,
THEREFORE, in consideration of the covenants and conditions hereinafter
contained, the parties hereto agree as follows:

     

    1.            Restriction on Transfer;
Term. Each Management Shareholder hereby agrees with the Company that
such Management Shareholder will not offer, sell, contract to sell, assign,
transfer, hypothecate, gift, pledge or grant a security interest in, or
otherwise dispose of, or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition of (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise, directly or indirectly) (each, a “Transfer”), any of
the Lock-Up Shares and shall not Transfer such shares until the earlier of (i)
two years from the date hereof and (ii) one hundred eighty (180) days following
the date on which the Company’s listing on a Major Stock Exchange becomes
effective.  Notwithstanding the foregoing, the entry by the Management
Shareholders into the Pledge Agreement of even date herewith and the performance
by the Management Shareholders of their obligations under such Pledge Agreement
shall not be deemed a Transfer in contravention of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.            Ownership. During the
Lock-Up Period, the Management Shareholders shall retain all rights of ownership
in the Lock-Up Shares, including, without limitation, voting rights and the
right to receive any dividends that may be declared in respect thereof, except
as otherwise provided in the Pledge Agreement or the other Transaction Documents
whereby any benefits, rights, title or otherwise shall inure to the
Purchasers. 

    

    3.            Company and Transfer
Agent. The Company is hereby authorized and required to disclose the
existence of this Agreement to its transfer agent. The Company and its transfer
agent are hereby authorized and required to decline to make any transfer of the
Common Stock if such transfer would constitute a violation or breach of this
Agreement and/or the Pledge Agreement.

     

    4.            Notices. All notices,
demands, consents, requests, instructions and other communications to be given
or delivered or permitted under or by reason of the provisions of this Agreement
or in connection with the transactions contemplated hereby shall be in writing
and shall be deemed to be delivered and received by the intended recipient as
follows: (i) if personally delivered, on the business day of such delivery (as
evidenced by the receipt of the personal delivery service), (ii) if mailed
certified or registered mail return receipt requested, two (2) business days
after being mailed, (iii) if delivered by overnight courier (with all charges
having been prepaid), on the business day of such delivery (as evidenced by the
receipt of the overnight courier service of recognized standing), or (iv) if
delivered by electronic mail or facsimile transmission, on the business day of
such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent
after that time, on the next succeeding business day (as evidenced, in the case
of facsimile transmissions by the printed confirmation of delivery generated by
the sending party’s telecopier machine). If any notice, demand, consent,
request, instruction or other communication cannot be delivered because of a
changed address of which no notice was given (in accordance with this Section
4), or the refusal to accept same, the notice, demand, consent, request,
instruction or other communication shall be deemed received on the second
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable.

     

    If to the
Company:

    

    Sino Gas International Holdings,
Inc.

    No. 18
Zhong Guan Cun Dong St.

    Haidian
District

    Beijing,
P.R. China

    Attention:
Yuchuan Liu, Chairman and CEO

     

    With a
copy to:

    

    Jiannan
Zhang

    Cadwalader,
Wickersham & Taft LLP

    2301
China Central Place Tower 2

    No. 79
Jianguo Road, Beijing 100025, China

    Fax:
(86-10) 6599-7300

     

    
      
        
        

      

      
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    If to the
Purchasers, to the addresses listed on Schedule I
hereto:

    

    With a
copy to:

    

    Axiom Capital Management,
Inc.

    780 Third
Avenue, 43rd floor

    New York,
NY 10017-2024

    Fax:
(212) 521-3888

    Attention:  Mark
D. Martino, President

    

    If to the
Management Shareholders, to such Management Shareholder c/o of the Company
at the address set forth above.

    

    or to
such other address as any party may specify by notice given to the other party
in accordance with this Section 4.

     

    5.            Amendment. This
Agreement may not be modified, amended, altered or supplemented, except by a
written agreement executed by each of the parties hereto following the prior
written consent of the holders of a majority in aggregate principal amount of
the Notes.

     

    6.            Entire Agreement.
This Agreement contains the entire understanding and agreement of the parties
relating to the subject matter hereof and supersedes all prior and/or
contemporaneous understandings and agreements of any kind and nature (whether
written or oral) among the parties with respect to such subject
matter.

    

    7.            Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in that
state, without regard to any of its principles of conflicts of laws or other
laws which would result in the application of the laws of another jurisdiction.
This Agreement shall be construed and interpreted without regard to any
presumption against the party causing this Agreement to be drafted.

     

    8.            Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
PARTIES UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE
FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN NEW YORK COUNTY OR SUCH
DISTRICT, AND AGREES THAT SERVICE OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER
PROCESS RELATING TO SUCH SUIT, ACTION OR OTHER PROCEEDING MAY BE EFFECTED IN THE
MANNER PROVIDED IN SECTION 4.

     

    
      
        
        

      

      
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    9.            Severability. The
parties agree that if any provision of this Agreement be held to be invalid,
illegal or unenforceable in any jurisdiction, that holding shall be effective
only to the extent of such invalidity, illegally or unenforceability without
invalidating or rendering illegal or unenforceable the remaining provisions
hereof, and any such invalidity, illegally or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is the intent of the parties that this Agreement be fully
enforced to the fullest extent permitted by applicable law.

     

    10.            Binding Effect;
Assignment. This Agreement and the rights and obligations hereunder may
not be assigned by any Management Shareholder without the prior written consent
of the Company and the holders of a majority in aggregate principal amount of
the Notes. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns.

     

    11.            Headings. The section
headings contained in this Agreement (including, without limitation, section
headings and headings in the exhibits and schedules) are inserted for reference
purposes only and shall not affect in any way the meaning, construction or
interpretation of this Agreement. Any reference to the masculine, feminine, or
neuter gender shall be a reference to such other gender as is appropriate.
References to the singular shall include the plural and vice versa.

     

    12.            Counterparts. This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, by facsimile or other electronic
transmission, each of which when executed shall be deemed to be an original, and
all of which, when taken together, shall constitute one and the same document.
This Agreement shall become effective when one or more counterparts, taken
together, shall have been executed and delivered by all of the parties
hereto.

     

     

    

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    [SIGNATURE
PAGE TO LOCK-UP AGREEMENT]

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above herein.

     

    
      
        
          	 	

                  SINO
      GAS INTERNATIONAL HOLDINGS, INC.

                	 
	 	 	 	 
	
                    
      

                	
                  By:
      

                	  
      	 
	 	 	Name:	 
	 	 	Title:	 

        

      

    

     

    
       

      
        
          
            
              	 	

                      

                        SHAREHOLDER

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	  
      	 
	 	 	Name:	 

            

          

        

      

       

      
         

        
          
            
              
                	 	

                        

                          SHAREHOLDER

                        

                      	 
	 	 	 	 
	
                          
      

                      	
                        By:
      

                      	  
      	 
	 	 	Name:	 

              

            

          

        

         

        
          
            
            

          

          
            5Unassociated Document

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      IN
WITNESS WHEREOF, the parties have executed this agreement under seal effective
the date first written above.

      

      American
Restaurant Concepts, Inc.

      

      /s/  James Robert
Shaw

      

      By: James
Robert Shaw, Secretary

      

      

      /s/ Michael
Rosenberger

      

      Michael
Rosenberger, individually

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