EXHIBIT 10.1
SHARE TRANSFER AGREEMENT
Party A: IMOT Information Technology (Shenzhen) Ltd.
Address: 10/F., Guomao Building, Remin Road South, Shenzhen
City, China (Postcode : 518014)
Party B: Shenzhen Golden Anke Technology Co. Ltd. ("Golden Anke")
Address: Xxxx Xxxx, 0/X., Xxxxx 0, XXX Science and Industry Park,
Huaqiang Road North, Shenzhen, China.
Party C: Intermost Corporation
Address: 00/X., Xxxxxx Xxxxxxxx, Xxxxxx Xxxx Xxxxx, Xxxxxxxx,
Xxxxx (Postcode: 518014)
Party D: Original Shareholders of Golden Anke
TU Guoshen (I.D. No. 360102196509275814)
LI Zhiquan (I.D. No. 000000000000000000)
SECTION 1: BACKGROUND
WHEREAS:
1.1 On behalf of its parent company, Intermost Corporation (an OTCBB
listed company, hereby referred to as "IMOT"), IMOT Information
Technology (Shenzhen) Ltd. shall acquire the shareholding of Golden
Anke by issuing common stock of IMOT, so as to participate in and
develop network digital surveillance and security business.
1.2 Golden Anke is the subsidiary of Jiuding Group in Shenzhen. Its
registered capital and paid-up capital is Rmb10 million and under
Chinese GAAP its net asset value shall not be less than Rmb10 million
at the date this Agreement comes into effect. Its major business is
the development, sales, engineering and services of Internet based
digital network surveillance and security systems.
Through friendly consultation, all parties have agreed on the following
agreement:
SECTION 2: SHARE TRANSFER
2.1 Both Party A and Party B agree that Party A shall acquire,
by issuing common stock of IMOT, 51% shareholding of Party B from shareholders
authorized by the shareholders' general meeting of Golden Anke
("Selling Shareholders of Party B"). Share price of the IMOT common stock to be
issued shall be the average closing price of IMOT trading on the NASD OTCBB
during the two-month period prior to March 20, 2004, (from January 20, 2004 to
March 19, 2004) i.e. US$0.336 per share. Based on this share price, IMOT shall
issue 12 million shares of IMOT common stock to the Selling Shareholders of
Party B for the acquisition of Golden Anke's shareholding. Upon completion of
the exchange of shares, Party A shall own 51% shareholding in Golden Anke and
the original shareholders of Golden Anke shall own 49% shareholding. Under
Chinese GAAP the net asset value of Golden Anke shall not be less than Rmb10
million.
2.2 Both Party A and Party B agree that after this Agreement has
come into effect, Party A shall arrange the issuance and delivery of 12,000,000
shares of IMOT common stock within 25 days after the completion of the transfer
of 51% shareholding of Golden Anke (i.e. the date that all parties complete the
notarization for the change of shareholders at the notarization authority in
Shenzhen City, hereinafter referred to as "completion date of Golden Anke share
transfer"). 2.3 Party B undertakes, within 30 days after this Agreement has come
into effect, to complete all the legal procedures regarding the share transfer
to Party A as stipulated in Clause 2.1 of this Agreement.
2.4 Both parties agree that after this Agreement has come into
effect, they shall restructure the board of Golden Anke and shall jointly
develop the business of Golden Anke. Both parties agree that:-
(a) Majority of the directors shall be nominated by
Party A.
(b) Chairman and legal representative of Golden Anke
shall be nominated by Party B.
SECTION 3: BUSINESS DEVELOPMENT AND FUTURE EXPANSION OF GOLDEN ANKE
Both Parties agree that, as one of the largest network security companies in
China, Golden Anke shall have good prospect of development. In order to further
develop the business of Golden Anke, Party A shall assist Golden Anke in
restructuring its business development, human resources management, internal
management and financial management practices. All parties are willing to use
their best effort to facilitate the business development of Golden Anke. The
goal of Golden Anke is to become the largest and most successful Internet based
digital network surveillance and security company in China, and to bring the
greatest return to its shareholders.
SECTION 4: REPRESENTATION AND WARRANTIES OF PARTY A
4.1 Party A represents and warrants that its parent company,
IMOT, has legitimate listing status on the NASD OTCBB and its common shares are
in normal trading status. Party A undertakes that the shares to be issued to the
Selling Shareholders of Party B are valid shares and Party A shall have the
legal authority to implement this share transfer.
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4.2 After this Agreement has come into effect, Party A
undertakes to deliver the IMOT common stock to the Selling Shareholders of Party
B (or beneficiaries designated by Selling Shareholders of Party B).
4.3 One year after this Agreement has come into effect, some of
the IMOT common stock to be issued to the Selling Shareholders of Party B shall
be eligible for sale pursuant to Rule 144 of the Securities and Exchange
Commission of the U.S.A. 2 years after the issuance of shares those IMOT common
shares shall be eligible for sale in compliance with relevant regulations of the
Securities and Exchange Commission of the U.S.A.
4.4 After this Agreement has come into effect, Party A
undertakes to assist Golden Anke in its restructuring of business development,
human resources management, internal management, and financial management
practices, etc.
4.5 Party A is a legal entity duly incorporated in China and
possesses all the rights and authority to sign and execute this Agreement and
related documents.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF PARTY B
5.1 After this Agreement has come into effect, Party B
undertakes to arrange its shareholders to complete the share transfer in
accordance with this Agreement. Party B represents and warrants that the
shareholding to be transferred to Party A is valid and legitimately owned by the
shareholders of Party B, who have full and good title to these shares. All those
shares are free and clear of any liens, adverse claims, encumbrances, security
interests or any other restrictions. Selling Shareholders of Party B have full
and complete legitimate power to execute and implement this Agreement. 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
shareholding to Party A in accordance with Clause 2.1 of this Agreement.
5.2 Party A and Party B agree that, within the Two-Year Period
After Acquisition, All shareholders of Golden Anke shall receive 10% to 30% of
the net Profit as cash dividend every half year.
5.3 Party B undertakes that Golden Anke will focus on the
development of its core business including, but not limited to, network
surveillance and security, as well as other related business. The other business
operation of Jiuding Group shall not cause any adverse impact on Golden Anke
while it is pursuing its business plan and annual plan.
5.4 After this Agreement has come into effect and upon
completion of the share transfer, Party B shall coordinate with Party A
regarding the audit work of Golden Anke, Within the first 10 days of each month,
it shall submit to Party A the financial statements of Golden Anke for the
previous month as required for the listing companies.
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5.5 Party B is a corporate legal entity duly incorporated and in
existence according to China law. It has acquired all the power and authority
necessary for the execution and implementation of this Agreement. All the
liabilities and obligations of Party B have been disclosed and acknowledged by
Party A. Except for all these liabilities and obligations, Party B has no other
hidden or contingent liabilities or obligations.
SECTION 6: BREACH OF CONTRACT
6.1 If Party A delays in fulfilling its obligations as
stipulated in Clause 4.2 of this Agreement, Party A shall have to pay to Party B
a penalty equivalent to 0.01% of the total consideration for the share transfer
for each day it has delayed in fulfilling its obligations.
6.2 If Party B delays in fulfilling its obligations as
stipulated in Clause 5.4 of this Agreement, Party B shall have to pay to Party A
penalty equivalent to 0.1% of the total consideration for the share transfer for
each day it has delayed in fulfilling its obligations.
6.3 If Party B is unable to fulfill its representations as
stipulated in Clause 5.5 of this Agreement, any undisclosed liabilities and
obligations shall be borne by the Original Shareholders of Party B. If any loss
has been caused to Party A, original shareholders of Party B shall be liable to
pay for the damages caused. Party A shall also have the right to unilaterally
terminate this Agreement by giving a written notice to the other parties.
SECTION 7: 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 Shenzhen Branch of China
International Economic and Trade Arbitration Committee for arbitration in
accordance with its current arbitration principle. Arbitration results shall be
binding on both parties.
SECTION 8: JOINT AND SEVERAL GUARANTEE
As the parent company of Party A, Party C shall have joint and several guarantee
obligations regarding this Agreement. As the original shareholders of Golden
Anke, Party D shall have joint and several guarantee obligations regarding this
Agreement.
SECTION 9: EXECUTION OF AGREEMENT
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This Agreement shall be executed in quadruplicate. Upon execution by all
parties, evaluation and assessment work will commence. This Agreement shall come
into effect after the evaluation results are approved by the board of directors
of each party.
SECTION 10: OTHER PROVISIONS
Prior to the execution of this Agreement, all the promises or agreements, no
matter written or oral, among all parties regarding the subject matter of this
Agreement shall become void. Should any disagreements arise, this Agreement
shall prevail.
SECTION 11: EXHIBITS AND LEGAL FORCE
Exhibits of this Agreement include : Exhibit 1 : Balance sheet of Golden Anke
for 2003; Exhibit 2 : Profit and Loss Account of Golden Anke for 2003; Exhibit 3
: Resolution of Golden Anke's board of directors for consent of share transfer
by the shareholders. All these exhibits constitutes an integrated part of this
Agreement and shall be legally binding.
Party A: IMOT Information Technology (Shenzhen) Ltd.
Authorized representative
Party B: Shenzhen City Golden Anke Technology Ltd.
Authorized representative
Party C: Intermost Corporation
Authorized representative
Party D: Original Shareholders of Golden Anke
Authorized representative
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