Exhibit 3

                         SHAREHOLDER LOCK-UP AGREEMENT


April 9, 2002

RAE Systems Inc.
1339 Moffett Park Drive
Sunnyvale, California 94089

Dear Sirs:

         The undersigned is an equity holder of RAE Systems Inc., a Delaware
corporation ("RAE") publicly traded on the OTC Bulletin Board. RAE will be
filing a registration statement registering certain shares of its common stock
for resale. In the absence of being included in such registration statement,
shares received by the undersigned would be not saleable in the public market
until at least April 10, 2003. As an inducement to registering shares of RAE
common stock the undersigned holds, the undersigned hereby agrees that from the
date hereof and until six months (unless you are an officer or director of RAE,
in which event twelve months) following April 9, 2002 (the "Lock Up Date"), the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of common stock of RAE (the "Common
Stock") that the undersigned: (i) currently holds; or (ii) acquires upon the
conversion or exercise of securities held convertible into or exchangeable or
exercisable for shares of Common Stock from April 9, 2002 through the Lock Up
Date ((i) and (ii), the "Lock Up Shares"). Except for the Lock Up Shares, any
shares of Common Stock or other securities convertible into or exchangeable or
exercisable for any shares of Common Stock acquired by the undersigned after the
date hereof in the open market will not be subject to this Agreement.

         Nothing in this Agreement shall prohibit the transfer of shares to any
immediate family of the undersigned or to a trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned; provided
that such transferee agrees to be bound by this Agreement. For purposes of this
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.

         In furtherance of the foregoing, RAE and its transfer agent and
registrar are hereby authorized to decline to make any transfer of Lock Up
Shares if such transfer would constitute a violation or breach of this
Agreement.

         This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned.

Very truly yours,


_______________________________________
      (signature)

_______________________________________
      (printed name)