-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wp0daZFii7AobSwT2GZdhwgU4E/pHbbDV2i998bdA8Y5knSFalVgfqsC3epaRzpJ LMA/qu93yZAOvx5S0CoCyA== 0001010549-05-000665.txt : 20050927 0001010549-05-000665.hdr.sgml : 20050927 20050927161707 ACCESSION NUMBER: 0001010549-05-000665 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050921 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050927 DATE AS OF CHANGE: 20050927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHINA DIGITAL WIRELESS INC CENTRAL INDEX KEY: 0000721693 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 900093373 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12536 FILM NUMBER: 051105613 BUSINESS ADDRESS: STREET 1: 429 GUANGDONG ROAD CITY: SHANGHAI STATE: F4 ZIP: 200001 BUSINESS PHONE: 86-21 6336-8686 MAIL ADDRESS: STREET 1: 429 GUANGDONG ROAD CITY: SHANGHAI STATE: F4 ZIP: 200001 FORMER COMPANY: FORMER CONFORMED NAME: BOULDER ACQUISITIONS INC DATE OF NAME CHANGE: 20020430 FORMER COMPANY: FORMER CONFORMED NAME: BOULDER BREWING CO DATE OF NAME CHANGE: 19920703 8-K 1 chinadig8k092105.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 21, 2005 Date of Report (Date of earliest event reported) China Digital Wireless, Inc. (Exact name of registrant as specified in its charter) Nevada 333-120431 90-0093373 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 429 Guangdong Road Shanghai, China 200001 (Address of Principal Executive Offices and Zip Code) (011) 86-21-6336-8686 (Registrant's telephone number, including area code) N/A (Former Name or Former Address, if changed since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement On August 9, 2005, China Digital Wireless, Inc. (the "Company") announced its intent to apply for listing on the American Stock Exchange ("AMEX"). In connection with the AMEX application, certain persons who hold more than 200,000 shares of the Company's common stock ("Common Stock") have entered in lockup agreements with the Company. Under such lockup agreements the stockholders have generally agreed to not offer, sell, assign or otherwise transfer a portion of their stock or other equity securities of the Company without prior written consent of the Company until the earlier of (i) 180 days after the date of the lockup agreements or (ii) the date that AMEX has approved the Company's listing application. The lockup agreements became effective on September 21, 2005, and were executed by ten of the Company's officers and directors and three additional stockholders. Under the lockup agreements with the non-officer/director stockholders, the Company issued an aggregate of 128,576 shares of common stock in consideration. The form of the lockup agreement that does not include the issuance of additional shares (the "Lockup Agreement") is attached hereto as Exhibit 99.1. The form of the lockup agreement that does include the issuance of additional shares (the "Additional Share Issuance and Lockup Agreement") is attached hereto as Exhibit 99.2. Item 5.05 Amendments to the Registrant's Code of Ethics On September 21, 2005, the Company's board of directors approved a Code of Conduct and Ethics (the "Code of Ethics"), which revised the previous code of ethics. The revised Code of Ethics applies to all directors, officers and employees of the Company and its subsidiaries. The previously adopted code of ethics has been revised to be broader in scope and applicable to more persons. A complete copy of the Code of Ethics is being filed as Exhibit 14.1 to this Current Report on Form 8-K. Item 9.01 Financial Statements and Exhibits (d) Exhibits. Exhibit No. Description - ----------- ----------- 14.1 Code of Ethics 99.1 Form of Lockup Agreement 99.2 Form of Additional Share Issuance and Lockup Agreement 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CHINA DIGITAL WIRELESS, INC. By /s/ Tai Caihua ----------------------------------- Tai Caihua President and Chairman of the Board Dated: September 21, 2005 EX-14.1 2 chinadig8kex141092105.txt CODE OF ETHICS Exhibit 14.1 China Digital Wireless, Inc. Code of Conduct and Ethics This Code of Conduct and Ethics (this "Code") of China Digital Wireless, Inc. (the "Company") outlines expected behaviors of all of our directors, officers and employees, including our senior executive and financial officers. This Code addresses responsibility for proper behavior and the standards to which we hold corporate officers and employees. Also included is a listing of our standards and values. This Code does not cover every issue that may arise, but it sets out basic principles to guide the directors, officers and employees of the Company. All Company directors, officers and employees should conduct themselves accordingly and seek to avoid even the appearance of improper behavior in any way relating to the Company. Any director or officer who has any questions about this Code should consult the chief executive officer ("CEO"), the chief financial officer ("CFO"), or general counsel as appropriate in the circumstances. If an employee has any questions about this Code, the employee should ask his or her supervisor how to handle the situation. Scope This Code is intended to deter wrongdoing and to promote the following: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents the Company files with, or submits to, the Securities and Exchange Commission (the "SEC") and in other public communications made by the Company; o compliance with applicable governmental rules and regulations and the rules of any exchange or quotation system on which the Company's securities are listed or quoted; o prompt internal reporting of violations of this Code to the appropriate person or persons identified in this Code; and o accountability for adherence to this Code. Responsibility for Proper Behavior Every person affiliated with the Company, from entry-level positions through senior management and our Board of Directors (the "Board"), plays a role in our compliance efforts. As such, every person has a responsibility to know what is in this Code, how the compliance program works, and what steps to take if something appears contrary to this Code. Since we take our compliance responsibilities seriously, we may have to take swift and deliberate action if we feel that a member of the team is not living up to their compliance responsibilities. This action can range from a simple warning to correct behavior, up to and including termination if errant behavior remains uncorrected. Therefore, it is important for everyone to understand his or her compliance responsibilities. Compliance with Laws, Rules and Regulations All directors, officers and employees must respect and obey all laws, rules and regulations applicable to the Company's business, including local laws in the areas in which the Company operates. -1- Conflicts of Interest The Company expects that its employees, officers and directors will avoid conflicts of interest and that they will not act in a manner detrimental to the Company during the course of their tenure with the Company. A conflict of interest exists when an individual's private interest interferes in any way - or appears to conflict - with the interests of the Company. A conflict of interest situation can arise when a director, officer or employee takes actions or has interests that may make it difficult to perform his or her work on behalf of the Company in an objective and effective manner. Conflicts of interest may also arise when a director, officer or employee, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest. Service to the Company should never be subordinated to personal gain and advantage. Conflicts of interest, whenever possible, should be avoided. In particular, clear conflict of interest situations involving directors, officers and employees may include the following: o any significant ownership interest in any supplier or customer; o any consulting or employment relationship with any customer, supplier, or competitor; o any outside business activity that detracts from an individual's ability to devote appropriate time and attention to his or her responsibilities to the Company; o the receipt of non-nominal gifts or excessive entertainment from any organization with which the Company has current or prospective business dealings; o being in the position of supervising, reviewing or having any influence on the job evaluation, pay, or benefit of any family member; and o selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable directors, officers, or employees are permitted to so purchase or sell. It is almost always a conflict of interest for a Company officer or employee to work simultaneously for a competitor, customer, or supplier. No officer or employee may work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with the Company's customers, suppliers, and competitors, except on the Company's behalf. Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear, and further review and discussions may be appropriate. Any director or officer who becomes aware of a conflict or potential conflict should bring it to the attention of the CEO, the CFO or general counsel, as appropriate. Any employee who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel. Directors, officers and employees are prohibited from taking for themselves personally or directing to a third party any opportunity that is discovered through the use of corporate property, information or position without the consent of the Board of Directors. No director, officer or employee may use corporate property, information or position for improper personal gain, and no director, officer or employee may compete with the Company directly or indirectly. Directors, officers and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises. -2- Insider Trading Directors, officers and employees who have access to confidential information relating to the Company are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company's business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to "tip" others who might make an investment decision on the basis of this information is not only unethical and against Company policy but is also illegal. Directors, officers and employees also should comply with insider trading standards and procedures adopted by the Company. SEC rules and regulations prohibit trading securities while in possession of material non-public information relating to such securities or disclosing material non-public information to enable another person to trade on such information. The term "trading" refers to all purchases and sales of securities for value, including purchases effected through stock option exercises, and the term "securities" includes not only common stock, but also preferred stock, bonds, notes, options, warrants, puts, calls and other equity and debt instruments. Competition and Fair Dealing Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each director, officer and employee should endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, service providers, competitors and employees. No director, officer or employee should take unfair advantage of anyone relating to the Company's business or operations through manipulation, concealment or abuse of privileged information, misrepresentation of material facts or any unfair dealing practice. To maintain the Company's reputation, compliance with the Company's quality processes and safety requirements is essential. In the context of ethics, quality requires that the Company's services meet reasonable customer expectations. All inspection and testing documents must be handled in accordance with all applicable regulations. Discrimination and Harassment The Company will not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances. Health and Safety The Company strives to provide each employee with a safe and healthful work environment. Each officer and employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices, and by reporting accidents, injuries and unsafe equipment, practices or conditions. Violence and threatening behavior are not permitted. Officers and employees should report to work in a condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs in the workplace will not be tolerated. Confidentiality Directors, officers and employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, suppliers, joint venture partners or others with whom the Company is considering a business or other transaction, except when disclosure is authorized by an executive officer or required or mandated by laws or regulations. Confidential information includes all non-public information that might be useful or helpful to competitors or harmful to the Company or its patients and suppliers, if disclosed. It also includes information that suppliers and patients have -3- entrusted to the Company, as well as information about the Company's business plans, financial results or forecasts, or other operational information. The obligation to preserve confidential information continues even after employment ends. Protection and Proper Use of Company Assets All directors, officers and employees should endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company assets should be used for legitimate business purposes and should not be used for non-Company business. The obligation to protect the Company's assets includes its proprietary information. Proprietary information includes intellectual property, such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties. Payments to Government Personnel The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country. In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. Corporate Disclosures All directors, officers and employees should support the Company's goal to have full, fair, accurate and timely disclosure in the reports required to be filed by the Company with the SEC. Each director, officer and employee should promptly bring to the attention of the CEO, the CFO or the Company's Audit Committee, as appropriate, any of the following: o any material information to which such individual may become aware that affects the disclosures made by the Company in its public filings or would otherwise assist the CEO, the CFO and the Audit Committee in fulfilling their responsibilities with respect to such public filings; o any information the individual may have concerning (a) significant deficiencies in the design or operation of internal controls that could adversely affect the Company's ability to record, process, summarize and report financial data, or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls; o any information the individual may have concerning any violation of this Code, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls; and o any information the individual may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of any violation of this Code. -4- Amendments and Waivers of This Code Any amendment to this Code and any waiver of this Code for directors or executive officers may be made only by the Board of Directors or a committee of the Board, and will be promptly disclosed to stockholders as required by applicable laws or rules and regulations, including the rules of the SEC and any exchange or quotation system on which the Company's securities are listed or quoted. Such amendments or waivers may be posted on the Company's website at www.chinadigitalwireless.com. Reporting Any Illegal or Unethical Behavior Directors and officers are encouraged to talk to the CEO, the CFO or general counsel, and employees are encouraged to talk to supervisors, managers, or other appropriate personnel, when in doubt about the best course of action in a particular situation. Directors, officers and employees should report any observed illegal or unethical behavior and any perceived violations of laws, rules, regulations or this Code to appropriate personnel. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith. Directors, officers and employees are expected to cooperate in internal investigations of misconduct. Enforcement The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of this Code. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code. These procedures may include (a) written notices to the individual involved that the Board has determined that there has been a violation, (b) censure by the Board, (c) demotion or re-assignment of the individual involved, (d) suspension with or without pay or benefits (as determined by the Board), and (e) termination of the individual's employment or position. In determining the appropriate action in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action, and whether or not the individual in question had committed other violations in the past. -5- EX-99.1 3 chinadig8kex991092105.txt FORM OF LOCKUP AGREEMENT Exhibit 99.1 LOCKUP AGREEMENT THIS LOCKUP AGREEMENT (this "Agreement") is entered into as of September ___, 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 Stockholder agree 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. LOCKUP AGREEMENT 1.1 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 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 (a) 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; 1 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 1; and provided further, that the restrictions set forth in this Section 1 shall only apply to 75% of the Lockup Shares owned by Stockholder on the date of 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 1. 1.2 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. 1.3 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 1; provided that any remaining Lockup Shares will continue to be subject to the restrictions in this Section 1 for the remainder of the term set forth in Section 1.1. 2. 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. 3. MISCELLANEOUS 3.1 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. 3.2 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. 3.3 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. 3.4 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. 2 3.5 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. 3.6 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. [Remainder of page intentionally left blank] 3 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: ____________________________ EX-99.2 4 chinadig8kex992092105.txt ADDITIONAL SHARE ISSUANCE & LOCKUP AGREEMENT Exhibit 99.2 ADDITIONAL SHARE ISSUANCE AND LOCKUP AGREEMENT ---------------------------------------------- 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 1 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. 2 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. 3 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. 4 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. [Remainder of page intentionally left blank] 5 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: ____________________________ -----END PRIVACY-ENHANCED MESSAGE-----