Exhibit 99.2
ADDITIONAL SHARE ISSUANCE AND LOCKUP AGREEMENT
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THIS ADDITIONAL SHARE ISSUANCE AND LOCKUP AGREEMENT (this "Agreement")
is entered into as of August ___, 2005, between ______________ ( "Stockholder")
and China Digital Wireless, Inc., a Nevada corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Stockholder currently owns shares of the Company's common
stock, par value $0.001 per share (the "Common Stock"), and/or securities
convertible into or exercisable or exchangeable for Common Stock; and
WHEREAS, the Company and Stockholder desire that the Company issue to
Stockholder _______ shares (the "Shares") of Common Stock, in consideration for
Stockholder agreeing to certain restrictions on transfer with respect to a
portion of the Company's securities owned by Stockholder as further set forth
herein.
NOW, THEREFORE, in consideration of and subject to the mutual
agreements, terms and conditions herein contained, the receipt and sufficiency
of which are hereby acknowledged, the Company and Stockholder agree as follows:
1. ISSUANCE OF SHARES
1.1 Issuance and Delivery of Shares. Subject to the terms and
conditions set forth herein, the Company hereby agrees to issue to Stockholder
the Shares. The Company shall deliver to Stockholder a certificate or
certificates evidencing the Shares or otherwise instruct the Company's transfer
agent to issue the Shares to Stockholder within five days of the Effective Date
(defined below).
1.2 Legend. Any certificate(s) evidencing the Shares shall bear a
legend restricting transfer under the Securities Act of 1933, as amended (the
"Securities Act"), and acknowledging the restrictions on transfer set forth
herein.
2. LOCKUP AGREEMENT
2.1 Lockup. Without the prior written consent of the Company,
Stockholder will not, from the Effective Date until the earlier of (i) 180 days
after the date of this Agreement and (ii) the date that The American Stock
Exchange ("AMEX") has approved the Company's application for listing of the
Common Stock, directly or indirectly:
(a) offer, pledge, announce the intention to sell, sell,
assign, transfer, encumber, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any Common Stock or any securities
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convertible into or exercisable or exchangeable for Common Stock
(including without limitation, Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock that
may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the U.S. Securities and Exchange
Commission) (collectively, the "Lockup Shares");
(b) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of any
Lockup Shares, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Lockup Shares or such other
securities, in cash or otherwise; or
(c) make any demand for, or exercise any right with respect
to, the registration of any Lockup Shares;
provided that this agreement will not prevent the transfer of Lockup Shares by
Stockholder as a gift or gifts to family members or charitable organizations to
the extent that any donee thereof agrees in writing to be bound by the terms of
this Section 2; and provided further, that the restrictions set forth in this
Section 2 shall only apply to 75% of the Lockup Shares owned by Stockholder on
the date of this Agreement (after taking into account the issuance of the Shares
pursuant to this Agreement). The remaining 25% of the Lockup Shares owned by
Stockholder on the date of this Agreement, and any additional shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock acquired by Stockholder after the date of this Agreement, shall not
be subject to such the restrictions set forth in this Section 2.
2.2 Consent to Decline Transfers. Stockholder agrees and consents that
the Company and its transfer agent and registrar are hereby authorized to
decline to make any transfer of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock if such transfer would constitute a
violation or breach of this Agreement.
2.3 Release of Shares. At any time and from time to time during the
term of this Agreement, the Company may, in its sole discretion and upon notice
to Stockholder, reduce the percentage of Stockholder's Lockup Shares that are
subject to the restrictions of this Section 2; provided that any remaining
Lockup Shares will continue to be subject to the restrictions in this Section 2
for the remainder of the term set forth in Section 2.1.
3. EFFECTIVE DATE OF THIS AGREEMENT
This Agreement shall become effective (a) upon the date first above
written or (b) upon the date that all persons known to the Company to hold
200,000 shares or more of the Common Stock ("Major Stockholders") have entered
into agreements substantially similar to this Agreement or Stockholder has
otherwise agreed that this Agreement is effective, whichever is later.
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4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Stockholder that:
4.1 Organization, Standing and Power. The Company is duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has the requisite corporate power and authority to carry on its business as
presently conducted.
4.2 Validity; Authorization; No Violation. This Agreement is a valid
and legally binding obligation of the Company, enforceable in accordance with
its terms against the Company, except as limited by bankruptcy, insolvency and
similar laws affecting creditors generally, and by general principles of equity,
and except that enforcement of rights to indemnification contained herein may be
limited by applicable federal or state laws or the public policy underlying such
laws, regardless of whether enforcement is considered in a proceeding in equity
or at law. The Shares are duly authorized, validly issued, fully paid and
nonassessable. The execution, delivery and performance of this Agreement by the
Company (a) have been duly authorized by the Company, (b) will not violate any
applicable federal or state law, any order of any court or governmental agency
or the formation documents of the Company, (c) will not result in a breach or
default under any agreement by which the Company or any of its assets is bound
which would have a Material Adverse Effect and (d) will not require any consent,
approval or authorization of, or registration or filing with, any governmental
authority or other regulatory agency other than such consents, approvals,
authorizations, registrations or filings which have already been made or which
are required pursuant to federal or state securities laws or requirements of any
securities exchange on which the Company's securities are listed. For purposes
of this Agreement, "Material Adverse Effect" means any material adverse effect
with respect to the Company, taken as a whole, or any change or effect that
adversely, or is reasonably expected to adversely, affect the ability of the
Company to maintain its current business operations or to consummate the
transactions contemplated by this Agreement in any material respect.
4.3 Capitalization. (a) The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, of which 17,018,692 shares are
issued and outstanding immediately prior to the execution of this Agreement. No
shares of Common Stock are held by the Company in its treasury. All outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable and not subject to preemptive or similar rights. No
bonds, debentures, notes or other indebtedness of the Company having the right
to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which the stockholders of the Company may vote are
issued or outstanding. Except for this Agreement and any similar agreements the
Company may enter into with the Major Stockholders, the Company does not have
any outstanding option, warrant, call, subscription or other right, agreement or
commitment which either (a) obligates the Company to issue, sell or transfer,
repurchase, redeem or otherwise acquire or vote any shares of the capital stock
of the Company or (b) restricts the voting, disposition or transfer of shares of
capital stock of the Company. There are no outstanding stock appreciation rights
or similar derivative securities or rights of the Company.
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5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder represents and warrants to the Company as follows:
5.1 Power and Authority. Stockholder hereby represents and warrants
that it has full power and authority to enter into this agreement.
5.2 Investment. Stockholder is acquiring the Shares for investment for
its own account, not as a nominee or agent, and not with a view to, or for
resale in connection with, any distribution thereof. Stockholder understands
that the Shares have not been registered under the Securities Act and are being
issued pursuant to an exemption from the registration requirements of the
Securities Act.
5.3 Accredited Investor Status. Stockholder is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities Act.
5.4 Restricted Securities. Stockholder acknowledges that it must bear
the economic risk of its investment in the Shares for an indefinite period of
time since the Shares are restricted securities under the Securities Act in that
they are being acquired from the Company in a transaction not involving a public
offering, and that under the Securities Act and applicable regulations
promulgated thereunder the Shares may be resold without registration under the
Securities Act only in certain limited circumstances. Stockholder understands
the resale limitations imposed by the Securities Act and the rules promulgated
thereunder.
6. MISCELLANEOUS
6.1 AMEX Approval. The Company shall promptly notify Stockholder if
AMEX approves the Company's application for listing of the Common Stock at the
physical address or email address set forth on the signature page of this
Agreement.
6.2 Waiver, Amendment. No provision of this Agreement shall be waived,
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, change, discharge or
termination is sought.
6.3 Assignability. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto, their successors and permitted
assigns, heirs and personal representatives. Neither this Agreement nor any
right, remedy, obligation or liability hereunder shall be assignable by either
the Company or Stockholder without the prior written consent of each other
party.
6.4 Section and Other Headings. The section headings in this Agreement
are for reference purposes only and shall not affect in any way the
interpretation of this Agreement.
6.5 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Nevada, without giving
effect to principles of conflicts of laws thereof that would require the
application of the law of another jurisdiction.
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6.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
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IN WITNESS WHEREOF, the Company and Stockholder have executed this
Agreement as of the date first written above.
CHINA DIGITAL WIRELESS, INC.
By:_________________________
Name:
Title:
STOCKHOLDER
By:_________________________
Name:
Title:
Address of Stockholder:
____________________________
____________________________
____________________________
Email Address:
____________________________
