<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Integrated Transportation Network Group, Inc.
-----------------------------------------------
(Name of Issuer)
Common Shares, Par Value $.01 Per Share
-----------------------------------------
(Title of Class of Securities)
45814H103
--------------
(CUSIP Number)
Yung Yau
c/o Shell Electric Mfg. (Holdings) Co. Ltd.
1/F, Shell Industrial Building
12 Lee Chung Street
Chai Wan Industrial District
Hong Kong
(011-852-2558-0181)
------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Jonathan H. Lemberg, Esq.
Morrison & Foerster LLP
23rd Floor, Entertainment Building
30 Queen's Road Central
Hong Kong
(011-852-2585-0888)
------------------------------
March 26, 1999
---------------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ].
1
<PAGE> 2
- --------------------
CUSIP NO. 45814H103
- --------------------
- --------- ----------------------------------------------------------------------
NAME OF REPORTING PERSON: Yung Yau
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
3 SEC USE ONLY
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
4 CHECK SOURCE OF FUNDS: PF
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2 [ ]
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Hong Kong
- --------- ----------------------------------------------------------------------
- -------------------- ------ ----------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,943,722
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: None
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 1,943,722
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: None
WITH
- -------------------- ------ ----------------------------------------------------
- --------- ----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 1,943,722
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 15.6%
- --------- ----------------------------------------------------------------------
- --------- ----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- --------- ----------------------------------------------------------------------
2
<PAGE> 3
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value (the "Common
Stock"), of Integrated Transportation Network Group, Inc. (the "Company"), a
Delaware corporation with principal executive offices at 575 Lexington Avenue,
Suite 410, New York, New York. To the best of filer's knowledge, the principal
executive officers of the Company are Wu Zhi Jian, Chairman of the Board of
Directors; Andrew Lee, President and Director; Willy Wu, Executive Vice
President and Chief Financial Officer; Peng Jun, Executive Vice President,
Treasurer and Director; Zhang Li Wei, Director; Li Yong Yuan, Director; and Mona
Ng, Secretary.
Item 2. Identity and Background.
(a)-(f). This statement is filed by Yung Yau, a Hong Kong citizen. The
business address of Mr. Yung is 1/F., Shell Industrial Bldg., 12 Lee Chung St.,
Chai Wan Industrial District, Hong Kong. Mr. Yung serves as the Chairman and
the Executive Director of the Board of Directors of Shell Electric Mfg.
(Holdings) Co., Ltd. ("SMC"), a Hong Kong corporation. SMC's principal
businesses are the manufacturing and marketing of electrical household
appliances and property investment. The principal office and business address
of SMC is 1/F., Shell Industrial Building, 12 Lee Chung Street, Chai Wan
Industrial District, Hong Kong.
During the last five years, Mr. Yung has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) nor
has he been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which he was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations.
This statement relates to the acquisition of an aggregate of 1,943,722
shares (the "Shares") of Common Stock of the Company, which are broken down as
follows:
1. 1,500,000 shares acquired, pursuant to a Subscription Agreement dated
March 26, 1999 between Mr. Yung and the Company, at a purchase price of
US$2.00 per share, for an aggregate purchase price of US$3,000,000.
2. 443,722 shares acquired pursuant to a Purchase Agreement dated March 26, 1999
between Mr. Yung and New Century International S.R.L. ("New Century"), at a
purchase price of US$3.50 per share, for an aggregate purchase price of
US$1,553,027.
- 3 -
<PAGE> 4
Item 4. Purpose of Transaction.
The Shares were acquired for the purpose of investment and without intent
to change or influence control of the Company. Concurrently, Mr. Kwok Kee Billy
Yung, who is a son of Mr. Yung, acquired 647,908 shares of the Company's Common
Stock. Together with the previously acquired 2,430,952 shares, the aggregate
number of shares that Mr. Kwok Kee Billy Yung has acquired or is entitled to
acquire, including shares acquirable upon full exercise of the warrants and full
conversion of the convertible note (before adjustment, if any, to the conversion
price), is 3,078,860. Both Mr. Yung and Mr. Kwok Kee Billy Yung disclaim any
beneficial ownership in the shares held by each other in the Company. Except as
set forth above, Mr. Yung has no plan nor has he made any proposal which relates
to or would result in (a) the acquisition by any person of additional securities
of the Company or the disposition of securities of the Company, (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure;
(g) changes in the Company's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person; (h) causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to any of those enumerated
above.
Item 5. Interest in Securities of the Issuer.
The aggregate number of shares of Common Stock that Mr. Yung has acquired
is 1,943,722, and is equal to approximately 15.6% of the issued and outstanding
shares of Common Stock (including the Shares). The percentage interest held by
Mr. Yung is based on the number of shares of Common Stock represented to
Mr. Yung by the Company to be outstanding as of March 23, 1999. Mr. Yung will
have sole power over the voting and disposition of the Shares.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Mr. Yung is not a party to any contracts, arrangements, understandings or
relationships (legal or otherwise) with respect to any securities of the Company
other than those agreements described in Item 3.
4
<PAGE> 5
Item 7. Material to be Filed as Exhibits.
Exhibit A. Subscription Agreement dated as of March 26, 1999 between
Mr. Yung and the Company.
Exhibit B. Purchase Agreement dated as of March 26, 1999 between Mr. Yung
and New Century.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: April 22, 1999
YUNG YAU
/s/ Yung Yau
-----------------------------
5
<PAGE> 6
EXHIBIT A
SUBSCRIPTION AGREEMENT
dated as of
March 26, 1999
ARTICLE I
SUBSCRIPTION
THIS SUBSCRIPTION AGREEMENT is dated as of March 26, 1999, between Dr. Yung
Yau (the "Subscriber"), and Integrated Transportation Network Group, Inc., a
Delaware corporation (the "Company").
Section 1.01 Subscription. The Subscriber hereby subscribes to the
immediate acquisition of 1,500,000 shares (the "Shares") of Common Stock, $0.01
par value ("Common Stock") of the Company at a purchase price of US$2.00 per
share, for an aggregate purchase price of US$3,000,000 (the "Purchase Price").
The Purchase Price may be paid, at the option of the Subscriber, either by wire
transfer in U.S. Dollars to an account specified by the Company or by wire
transfer in People's Republic of China Renminbi ("RMB") at an exchange rate of
RMB8.25 to US$1.00 (resulting in an aggregate purchase price in RMB of
RMB24,750,000) to the Company's designee as set forth in Section 1.02.
Promptly upon the execution hereof and receipt of the Purchase Price by the
Company or its designee as set forth below, the Company shall deliver the Shares
to the undersigned at the address indicated below.
Section 1.02 Payment of Purchase Price in RMB. In the event that the Subscriber
elects to pay the Purchase Price in RMB, the Purchase Price shall be paid by
wire transfer in Renminbi to an account of the Company's designee, Shenzhen
Jinzhenghua Transport Industrial Development Co., Ltd. (Company name in
Chinese), a 92% owned subsidiary of the Company ("Jinzhenghua"), as instructed
by the Company. In connection with any such payment to Jinzhenghua in Renminbi,
the Subscriber shall comply with the laws of the People's Republic of China
relating to foreign exchange restriction regulations, and shall indemnify the
Company for any losses incurred by the Company or Jinzhenghua as a direct
result of any failure on the part of the Subscriber to comply with such laws.
Exhibit A-1
<PAGE> 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 In connection with the purchase of the Shares, the
Subscriber acknowledges, warrants and represents to the Company as follows:
(a) It is acquiring the Shares for investment for its own account and
without the intention of participating, directly or indirectly, in a
distribution of the Shares, and not with a view to resale or any distribution of
the Shares, or any portion thereof.
(b) It has knowledge and experience in financial and business matters and
has consulted with its own professional representatives as it has considered
appropriate to assist in evaluating the merits and risks of this investment. It
has reviewed the Company's Registration Statement on Form S-1 dated June 29,
1998 and the Company's Quarterly Reports on Form 10Q for the quarter ended
June 30 and September 30, 1998, respectively. It has had access to and an
opportunity to question the officers of the Company, or persons acting on their
behalf, with respect to material information about the Company and, in
connection with his evaluation of this investment, has, to the best of its
knowledge, received all information and data with respect to the Company that it
has requested. It is acquiring the Shares based solely upon its independent
examination and judgment as to the prospects of the Company.
(c) The Shares were not offered to the Subscriber by means of publicly
disseminated advertisements or sales literature.
(d) Subject to the provisions of Section 3.01, it acknowledges that an
investment in the Shares is speculative and it may have to continue to bear the
economic risk of the investment in the Shares for an indefinite period. It
acknowledges that the Shares are being sold to the undersigned without
registration under any state, or federal or PRC law requiring the registration
of securities for sale, and accordingly will constitute "restricted securities"
as defined in Rule 144 of the U.S. Securities and Exchange Commission. The
transferability of the Shares is therefore restricted by applicable United
States Federal and state securities laws and may be restricted under the laws of
other jurisdictions.
(e) The Subscriber is an "accredited investor" as such term is defined in
Appendix A.
(f) In consideration of the acceptance of this subscription, the Subscriber
agrees that the Shares will not be offered for sale, sold or transferred by the
undersigned other than pursuant to (i) an effective registration under the
Securities Act of 1933, as amended (the "Act"), an exemption available under the
Act or a transaction that is otherwise in compliance with the Act; and (ii) an
effective registration under the securities law of any state or other
jurisdiction applicable to the transaction, an
Exhibit A-2
<PAGE> 8
exemption available under such laws, or a transaction that is otherwise in
compliance with such laws.
(g) It understands that no U.S. federal or state agency has passed upon the
offering of the Shares or has made any finding or determination as to the
fairness of any investment in the Shares.
Section 2.02 Representations and Warranties of the Company. As an
inducement to the Subscriber to enter into this Agreement and to consummate the
transactions contemplated herein, the Company hereby represents and warrants to
the Subscriber and agrees as follows:
(a) Organization; Authority. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has full
power and authority to enter into this Agreement and to perform its obligations
hereunder. This Agreement constitutes, and any other agreements and instruments
required to be delivered by the Company hereunder, when duly executed and
delivered by the Company, will constitute, valid and binding obligations of the
Company and will be enforceable in accordance with their respective terms. The
Company has previously provided to the Subscriber true copies of all resolutions
of the Company's Board of Directors necessary to authorize the transactions
described herein, and all such resolutions are in full force and effect and have
not been revoked.
(b) Capitalization. As of March 23, 1999, the authorized share capital of
the Company consists of 50,000,000 common shares, par value US$.01 per share, of
which 10,467,915 are fully issued and remain outstanding, and 5,000,000
preferred shares, par value US$.01 per share, none of which are issued and
outstanding. Except as set forth above and as set forth in Appendix B, no other
shares or equity securities of the Company have been issued and remain
outstanding, and there are no outstanding options, warrants or other rights to
purchase or acquire any share capital of the Company, whether granted by the
Company or otherwise, and there are no existing contracts by which the Company
is or may become bound to issue any additional shares. The Company has never
reduced, repaid, redeemed or purchased any of its share capital. The Shares
shall, upon issuance, shall be fully paid and non-assessable.
(c) No Consents. Neither the consummation of the transactions contemplated
hereby, nor compliance with nor fulfillment of the terms and provisions hereof,
will (i) require the consent of any governmental authority or any person under
any contract to which the Company is a party or to which the Company is subject
or (ii) give any party with rights under any material contract to which the
Company or any subsidiary of the Company is a party the right to terminate,
modify or otherwise change the material rights or obligations of any party under
such contract.
(d) Compliance with Laws. The Company is in compliance, and there exists no
alleged material noncompliance, with all applicable laws relating in any
material respect to the Company and the operation or conduct of its business,
except
Exhibit A-3
<PAGE> 9
where the failure to so comply would not have a material adverse effect
on the Company, and, except as previously disclosed in the Prospectus of the
Company dated June 29, 1998 or the quarterly reports of the Company filed with
the SEC on Form 10-Q for the three-month periods ending June 30, 1998 and
September 30, 1998, the Company has not received any notice of alleged violation
of any such applicable law.
ARTICLE III
MISCELLANEOUS
Section 3.01 Registration Rights. The Company agrees that it shall file
with the United States Securities and Exchange Commission (the "SEC") a
registration statement under the U.S. Securities Act of 1933 (the "Securities
Act") in accordance with Rule 415 thereof (the "Shelf Registration") with
respect to all of the Shares, and shall use its best efforts to cause such
registration statement to become effective within 180 days after the date hereof
and to remain effective at all times for a period of four years after the date
hereof. In addition, if the Company at any time files a Registration Statement
under the Securities Act with respect to its Common Stock after the date hereof,
the Company shall so notify the undersigned and shall include such of the Shares
as the Subscriber may request on such Registration Statement.
Section 3.02 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 3.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, applicable to
contracts executed in and to be performed entirely within that state. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any New York state or federal court sitting in the City
of New York and, to the extent permitted by Law, the parties hereto expressly
consent to the jurisdiction of such courts, agree to venue in such courts and
hereby waive any defense or claim of forum non conveniens they may have with
respect to any such action or proceeding.
Exhibit A-4
<PAGE> 10
IN WITNESS WHEREOF, the Subscriber and the Company have executed this
Agreement or caused this Agreement to be executed as of the date first written
above.
<TABLE>
<CAPTION>
COMPANY SUBSCRIBER
<S> <C>
INTEGRATED TRANSPORTATION DR. YUNG YAU
NETWORK GROUP INC.
By: /s/ Andrew Lee By: /s/ Yung Yau
Name: Andrew Lee Name: Yung Yau
Title: President Title:
Address: 205 West 39th Street Address: c/o 1/F Shell Industrial Building
16th Floor 12 Lee Chung Street, Chai Wan
New York, NY 10018 Hong Kong
U.S.A.
</TABLE>
Exhibit A-5
<PAGE> 11
APPENDIX A
An "accredited investor" within the meaning of Regulation D under the
Securities Act of 1933 includes the following:
Organizations
(1) A bank as defined in section 3(a)(2) of the Act, or any savings and
loan association or other institution as defined in section 3(a)(5)(A) of the
Act, whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to section 15 of the Securities Exchange Act of 1934;
insurance company as defined in section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c)
or (d) of the Small Business Investment Act of 1958; an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan fiduciary, as defined in
section 3(21) of such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors.
(2) A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.
(3) A trust (i) with total assets in excess of $5,000,000, (ii) not formed
for the specific purpose of acquiring the Shares, (iii) whose purchase is
directed by a person who, either alone or with his purchaser representative, has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment.
(4) A corporation, business trust, partnership, or an organization
described in section 501(c)(3) of the Internal Revenue Code, which was not
formed for the specific purpose of acquiring the Shares, and which has total
assets in excess of $5,000,000.
Individuals
(5) Individuals with income from all sources for each of the last two full
calendar years whose reasonably expected income for this calendar year exceeds
either of:
(i) $200,000 individual income; or
(ii) $300,000 joint income with spouse.
Appendix A-1 to Exhibit A
<PAGE> 12
NOTE: Your "income" for a particular year may be calculated by adding to your
adjusted gross income as calculated for Federal income tax purposes any
deduction for long term capital gains, any deduction for depletion allowance,
any exclusion for tax exempt interest and any losses of a partnership allocated
to you as a partner.
(6) Individuals with net worth as of the date hereof (individually or
jointly with your spouse), including the value of home, furnishings, and
automobiles, in excess of $1,000,000.
(7) Directors, executive officers or general partners of the Issuer.
Appendix A-2 to Exhibit A
<PAGE> 13
APPENDIX B
Options and Warrants
Employee Options The Company has issued and outstanding
options to purchase 2,210,000 shares of
Common Stock at a price per share of
US$2.00.
Consultant's Warrants/Shares The Company has agreed to issue financial
consultants warrants to purchase an aggregate
of 60,000 shares of Common Stock as follows:
30,000 are exercisable at US$3.00 per share
and 30,000 are exercisable at US$4.50 per
share. In addition, the Company has agreed
to issue 20,000 shares of Common Stock to a
consultant and 15,000 shares of Common Stock
to a finder.
Warrants Purchase rights to 1,689,286 shares of Common
Stock, at various prices.
Reserved Shares The Company has reserved for issuance 122,496
shares of Common Stock in connection with the
surrender of remaining outstanding shares of
Common Stock of Dawson Science Corporation,
the Company's former parent.
Appendix B-1 to Exhibit A
<PAGE> 14
EXHIBIT B
March 26, 1999
New Century International S.R.L.
Avenue Talara #159
Jesus Maria
Lima, Peru
Ladies and Gentlemen:
The undersigned, Dr. Yung Yau, hereby agrees to purchase 443,722 shares of
Common Stock, $.01 par value ("Common Stock"), of Integrated Transportation
Network Group Inc., a Delaware corporation (the "Company"), from New Century
International S.R.L. ("New Century") (such shares of Common Stock, which shall
be re-issued in the name of the undersigned, are referred to herein collectively
as the "Shares"), and New Century agrees to sell the Shares to the undersigned,
all on the conditions set forth herein. The purchase price for the Shares shall
be US$3.50 per share, resulting in an aggregate Purchase Price of US$1,553,027.
1. Upon New Century's acceptance of this subscription, the undersigned
shall deliver the purchase price in U.S. Dollars to New Century by wire transfer
pursuant to New Century's written instructions, and New Century shall deliver
the Shares to the undersigned at the address indicated below.
2. In connection with the purchase of the Shares, the undersigned
acknowledges, warrants and represents to the Company and New Century as follows:
(a) The undersigned is acquiring the Shares for investment for its
own account and without the intention of participating, directly or
indirectly, in a distribution of the Shares, and not with a view to resale
or any distribution of the Shares, or any portion thereof.
(b) The undersigned has knowledge and experience in financial and
business matters and has consulted with its own professional
representatives as it has considered appropriate to assist in evaluating
the merits and risks of this investment. The undersigned has reviewed the
Company's prospectus dated June 29, 1998 and the Company's Quarterly
Reports on Form 10Q for the quarter ended June 30 and September 31, 1998,
respectively. The undersigned has had access to and an opportunity to
question the officers of the Company, or persons acting on their behalf,
with respect to material information about the Company and, in connection
with its evaluation of this investment, has, to the best of its knowledge,
received all information and data with respect to the Company that
Exhibit B-1
<PAGE> 15
the undersigned has requested. The undersigned is acquiring the Shares
based solely upon its independent examination and judgment as to the
prospects of the Company.
(c) The Shares were not offered to the undersigned by means of
publicly disseminated advertisements or sales literature.
(d) The undersigned acknowledges that an investment in the Shares is
speculative and the undersigned may have to bear the economic risk of the
investment in the Shares for an indefinite period. The undersigned
acknowledges that the Shares are being sold to the undersigned without
registration under any state, or federal or PRC law requiring the
registration of securities for sale, and accordingly will constitute
"restricted securities" as defined in Rule 144 of the U.S. Securities and
Exchange Commission. The transferability of the Shares is therefore
restricted by applicable United States Federal and state securities laws
and may be restricted under the laws of other jurisdictions.
(e) The undersigned is an "accredited investor" as such term is
defined in Appendix A.
(f) In consideration of the acceptance of this subscription, the
undersigned agrees that the Shares will not be offered for sale, sold or
transferred by the undersigned other than pursuant to (i) an effective
registration under the Securities Act of 1933, as amended ("the Act"), an
exemption available under the Act or a transaction that is otherwise in
compliance with the Act; and (ii) an effective registration under the
securities law of any state or other jurisdiction applicable to the
transaction, an exemption available under such laws, or a transaction that
is otherwise in compliance with such laws.
(g) The undersigned understands that no U.S. federal or state agency
has passed upon the offering of the Shares or has made any finding or
determination as to the fairness of any investments in the Shares.
(h) The undersigned agrees to indemnify and hold harmless the Company
and New Century and their respective officers, directors, employees and
agents from and against any and all costs, liabilities and expenses
(including attorneys' fees) arising out of or related in any way to any
breach of any representation or warranty of the undersigned contained
herein.
3. New Century acknowledges, warrants and represents to the undersigned
that all of the Shares are validly issued, fully paid and non-assessable; that
New Century is the legal and beneficial owner of the Shares, and the Shares are
owned by New Century free and clear of any and all liens, charges and
encumbrances of any kind whatsoever (collectively, "Liens"), and shall be
transferred to the undersigned free and clear of any and all Liens. New Century
shall indemnify and hold harmless the undersigned and its respective officers,
directors, employees and agents from and against any and all costs,
Exhibit B-2
<PAGE> 16
liabilities and expenses (including attorneys' fees) arising out of or related
in any way to any breach of any representations or warranties of New Century
contained herein.
4. The Company agrees that it shall file with the United States Securities
and Exchange Commission (the "SEC") a registration statement under the Act in
accordance with Rule 415 thereof (the "Shelf Registration") with respect to all
of the Shares, and shall use its best efforts to cause such registration
statement to become effective within 180 days after the date hereof and to
remain effective at all times for a period of four years after the date hereof.
In addition, if the Company at any time files a Registration Statement under the
Act with respect to its Common Stock after the date hereof, the Company shall so
notify the undersigned and include such of the Shares as the undersigned may
request on such Registration Statement.
ACCEPTANCE OF SUBSCRIPTION PURCHASER
NEW CENTURY INTERNATIONAL S.R.L. DR. YUNG YAU
By: /s/ Wang Yanan By: /s/ Yung Yau
---------------------- ---------------------
Name: Wang Yanan Name: Yung Yau
Title: Title:
Address: c/o 1/F Shell Industrial Building
12 Lee Chung Street, Chai Wan
Hong Kong
AGREEMENT WITH RESPECT TO
SECTION 4 ONLY:
INTEGRATED TRANSPORTATION
NETWORK GROUP, INC.
By: /s/ Andrew Lee
--------------------
Name : Andrew Lee
Title:
Exhibit B-3
<PAGE> 17
APPENDIX A
An "Accredited Investor" within the meaning of Regulation D under the Securities
Act of 1933 includes the following:
Organizations
(1) A bank as defined in section 3(a)(2) of the Act, or any savings and
loan association or other institution as defined in section 3(a)(5)(A) of the
Act, whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to section 15 of the Securities Exchange Act of 1934;
insurance company as defined in section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c)
or (d) of the Small Business Investment Act of 1958; an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan fiduciary, as defined in
section 3(21) of such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors.
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
(3) A trust (i) with total assets in excess of $5,000,000, (ii) not formed
for the specific purpose of acquiring the Shares, (iii) whose purchase is
directed by a person who, either alone or with his purchaser representative, has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the proposed investment.
(4) A corporation, business trust, partnership, or an organization
described in section 501(c)(3) of the Internal Revenue Code, which was not
formed for the specific purpose of acquiring the Shares, and which has total
assets in excess of $5,000,000.
Individuals
(5) Individuals with income from all sources for each of the last two full
calendar years whose reasonably expected income for this calendar year exceeds
either of:
(i) $200,000 individual income; or
(ii) $300,000 joint income with spouse.
Appendix A-1 to Exhibit B
<PAGE> 18
NOTE: Your "income" for a particular year may be calculated by adding to your
adjusted gross income as calculated for Federal income tax purposes any
deduction for long term capital gains, any deduction for depletion allowance,
any exclusion for tax exempt interest and any losses of a partnership allocated
to you as a partner.
(6) Individuals with net worth as of the date hereof (individually or
jointly with your spouse), including the value of home, furnishings, and
automobiles, in excess of $1,000,000.
(7) Directors, executive officers or general partners of the Issuer.
Appendix A-2 to Exhibit B
