Share Transfer Agreement
Party A : IMOT Information Technology (Shenzhen) Co., Ltd. ("IMOTSZ")
Address : 00/X., Xxxxxx Xxxxxxxx, Xxxxx Xxxx Xxxxx, Xxxxxxxx
Xxxx, Xxxxx (Postcode : 518014)
Party B : Shenzhen Merchant Technology Investment Co., Ltd.
Address : 00/X., Xxxxxxxxxx Xxxxxxxx, 0000 Xxxxxxx Xxxx, Xxxxxx,
Xxxxxxxx Xxxx, Xxxxx
Party C : Intermost Corporation ("IMOT")
Address : 00/X., Xxxxxx Xxxxxxxx, Xxxxx Xxxx Xxxxx, Xxxxxxxx
Xxxx, Xxxxx (Postcode : 518014)
Party D : Snow Hill Developments Limited
Address : X.X. Xxx 000, Xxxxxxxx Incorporation Center, Road
Town, Tortola, British Virgin Island
Chapter 1 Background
WHEREAS:
1.1 Established in 2001, Shenzhen International Hi-Tech Exchange ("Hi-Tech
Exchange") is an enterprise entity incorporated and in legitimate operation
pursuant to laws of China. Its business office is situated at 2/F.,
Technology Building, Shangbu Zhong Road, Shenzhen City. Registered and
paid-in capital of Hi-Tech Exchange is Rmb30 million. As of December 31,
2003, shareholders' equity as illustrated in its audited financial
statement is Rmb21.11 million. Hi-Tech Exchange is an enterprise authorized
by the government to carry out business in the transfer of hi-tech property
rights and corporate equity interests.
1.2 Intermost Corporation ("Party C") is a company listed on the OTC Bulletin
Board.
1.3 Party A, IMOTSZ, is a limited liability company 100% owned and duly
incorporated by Intermost Corporation in Shenzhen City, China.
1.4 Party B, Shenzhen Merchant Technology Investment Co., Ltd., is a limited
liability company duly incorporated and in legitimate operation in Shenzhen
City, China.
1.5 Party B is the legitimate owner of 15% shareholding in the Hi-Tech
Exchange.
1.6 Part D is an associate limited liability company of Party B, incorporated
in British Virgin Island and in legitimate operation.
1.7 Party A agrees to acquire from Party B entire shareholding in the Hi-Tech
Exchange, so as to participate in and develop its business in the transfer
of hi-tech property rights and corporate equity rights.
Through friendly consultation, all parties have reached the following
agreement:-
2.1 Party B agree to sell to Party A and Party A agree to buy from Party B 15%
shareholding of Hi-Tech Exchange for a consideration of Rmb4,500,000.
2.2 Party B agrees that Party A shall acquire 15% shareholding of Hi-Tech
Exchange (valued at Rmb4,500,000) from Party B by issuing 2,470,355 shares
of common stock of IMOT, its parent company (based on the exchange rate of
US$1 = Rmb 8.28 promulgated by the People's Bank of China on Dec 7, 2004,
and the average stock price of IMOT, i.e. $0.22, trading on the OTC
Bulletin Board during the period from Oct 18, 2004 to Nov 18, 2004).
2.3 Party A agree, pursuant to Party B's request, to issue the 2,470,355 shares
of common stock of IMOT as stipulated in clause 2.2 to Party D designated
by Party B.
2.4 Party B agrees to, as requested by Party A, transfer 15% shareholding in
the Hi-Tech Exchange to Party A.
2.5 Both Parties A and B agree to recommend a person designated by Party A as a
Director of the Hi-Tech Exchange, and to recommend a person designated by
Party B as a Director of IMOT.
Chapter 3 Warranties of Party A and Party C
3.1 Party A warrants that IMOT has legitimate listing status on the OTCBB and
its common shares are in normal trading status. Party A further warrants
that the shares to be issued to Party B or any other corporation or natural
person designated by Party B are valid shares and Party A shall have the
legal authority to carry out this share transfer.
3.2 Party A and Party C warrant that, after this Agreement has come into
effect, it shall handle the procedures for issuing the IMOT common stock to
Party B or any corporation or natural person designated by Party B in
accordance with the stipulations stated in Clause 2.2 and 2.3 of this
Agreement and Party A and Party C shall make their best effort to deliver
those IMOT common stock to Party D within 30 days.
3.3 In compliance with relevant regulations of the Securities and Exchange
Commission (SEC), part of the IMOT common stock to be issued to Party B
pursuant to this Agreement shall be eligible for free trading after one
year upon issuance.
3.4 Party A is a legal entity incorporated in China and possess all the rights
and authority to sign and execute this Agreement. Party A warrants that the
descriptions about Party A and IMOT stated in Chapter 1 of this Agreement
is true and correct.
3.5 Party A undertakes to introduce overseas funding to the Hi-Tech Exchange as
soon as possible.
3.6 Party C warrants that descriptions about Party C stated in Chapter 1 of
this Agreement is true and correct.
Chapter 4 Warranties of Party B and Party D
4.1 Party B warrants that the shareholding of the Hi-Tech Exchange to be
transferred to Party A is valid and legitimately owned by Party B who has
full and good title to that shareholding. Party B has full and valid
ownership right of the shareholding and it has full and complete legitimate
power to execute and implement this Agreement. Party B further warrants
that no any third party shall claim any right on the shareholding.
4.2 Party B warrants that descriptions about Party B and Hi-Tech Exchange
stated in Chapter 1 of this Agreement is true and correct.
4.3 Party D warrants that descriptions about Party D stated in Chapter 1 of
this Agreement is true and correct.
4.4 Party B undertakes that, within 30 days after this Agreement has come into
effect, it shall complete all the legal procedures required for the
transfer of the shareholding to Party A in accordance with Clause 2.1 of
this Agreement so that Party A shall become a legitimate shareholder of the
Hi-Tech Exchange.
Chapter 5 Special Covenants
5.1 As one of the main reasons that Party B shall transfer the shareholding in
the Hi-Tech Exchange to Party A is to introduce foreign capital to the
Hi-Tech Exchange in Shenzhen through Party A. Both parties agree that
within two years after this Agreement has come into effect, if the total
transaction amount consummated by foreign funding introduced by Party A is
less than US$500 million, Party B shall have the right to request Party A
to return 12% to 15% shareholding in the Hi-Tech Exchange which is acquired
by Party A at the price and stipulated in this Agreement on a pro-rata
basis. Party A and Part C agree to cooperate. In consideration of this
Clause:-
(1) Within two years after this Agreement has come into effect, Party A
shall not transfer or assign to any third party all or part of its
shareholding in the Hi-Tech Exchange acquired pursuant to this
Agreement. If Party A has a particular reason that is approved by
Party B, Party B shall have the first right to buy back those stock
at the price and terms stipulated in clause 2.1 and 2.2, and in
exchange for the IMOT stock held by Party D.
(2) Whether or not Party B exercises this right, it shall not affect the
benefits that Party A may obtain from the interest or dividend
pursuant to its shareholding of Hi-Tech Exchange, nor the benefits
that Party B may obtain from the interest or dividend pursuant to its
shareholding of IMOT.
(3) Within two years after this Agreement has come into effect, if Party
D sell or transfer in any form its IMOT stock acquired pursuant this
Agreement, this clause 5.1 except 5.1(2) shall become void. However,
this shall not affect the validity of other clauses of this
Agreement.
5.2 Within one year after this Agreement has come into effect, total amount of
IMOT common stock sold by IMOT's current CEO shall not exceed 5% of his/her
shareholding in IMOT. Within two years after this Agreement has come into
effect, the total amount of IMOT common stock sold by IMOT's current CEO
shall not exceed 10% of his/her shareholding in IMOT. As the current CEO of
Party A and IMOT Xx. Xxxx Xxx warrants that he shall be bound with this
clause regardless his position in the company.
Chapter 6 Guarantee
Party C hereby guarantees Party A's implementation of all the rights and
obligations stipulated in this Agreement. Party D hereby guarantees Party B's
implementation of all the rights and obligations stipulated in this Agreement.
Chapter 7 Transfer Fees
Each party shall be responsible for its own expenses related to this share
transfer transaction.
Chapter 8 Settlement of Disputes
In case of any disputes on this Agreement, both parties shall settle them
through friendly consultation. If the disputes cannot be settled through
friendly consultation, they shall be submitted to the South China Branch of
China International Economic and Trade Arbitration Committee for arbitration in
accordance with its current arbitration principles. Arbitration results shall be
binding on both parties.
Chapter 9 Notice and Service
9.1 Any notice related to this Agreement must be in written.
9.2 Notices are deemed to be serviced if the they are delivered in the
following ways: Mail; Fax; Email.
Chapter 10
Four valid copies shall be generated for this agreement. This Agreement is
deemed to be effective once it is signed and stamped.
Signature
Party A : IMOT Information Technology (Shenzhen) Co., Ltd.
Signature:
December 8 2004
Party B : Shenzhen Merchant Technology Investment Co., Ltd.
Signature:
December 8 2004
Party C : Intermost Corporation
Signature:
December 8 2004
Party D : Snow Hill Development Limited
Signature:
December 8 2004
