Tranzcom China Security Networks Inc.
TSX VENTURE : TSN

Tranzcom China Security Networks Inc.

May 24, 2005 11:29 ET

Amendment to Share Transfer Agreement with Beijing Tranzcom Technology Co., Ltd.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 24, 2005) - Tranzcom China Security Networks Inc., (the "Company") (TSX VENTURE:TSN) is pleased to announced that further to the Company's news release dated September 20, 2004 the Company has amended the terms of the Share Transfer Agreement for the establishment of the Sino-Foreign joint venture company under the name of Beijing Tranzcom Technology Co., Ltd. ("BTT"). Under the original terms of the Share Transfer Agreement in exchange for 51% of the equity interest in BTT, the Company was to issue 1,000,000 common shares of the Company to the original Shareholders of BTT (hereinafter referred to as "the Chen Group") if BTT realizes sales revenue of 50 million RMB (about US$6 million) during the first year of operation. In addition, the Company agreed to issue 750,000 performance warrants (the "Performance Warrants") to Chen's Group. Each Performance Warrants will allow the holder to purchase one common share of the Company at US$0.30 per share excisable within 2 years. The Chen Group are only entitled to excise the Performance Warrants when BTT reaches sales revenue of 100 million RMB (about US$12 million) and net profit of over 10% during the first year of operation.

The amending agreement has been restated so that that the common shares shall now be held in Performance Escrow by the Company. If on the first anniversary from the date that the Joint Venture Enterprise completed its tax registration (which occurred November 26, 2004), Chen's Group can realize sales revenue of 50 million RMB in the first operating year, the Company shall proceed with the transferring of the Company's common shares within 30 days of the above anniversary. The Amended Agreement further clarifies that if BTT is unable to achieve the revenue goal of 50 million RMB (the "Revenue Target") in the first operating year, the Company shall release the Shares to Chen's Group in accordance to the proportion of actual realized revenue to the Revenue Target. The formula used to calculate the actual amount of the Shares to be transferred is: Actual realized revenue / 50 million RMB Revenue Target x 1 million shares. The unreleased shares, due to the incompletion of the Revenue Target, shall be withdrawn and cancelled by the Company. The parties shall continue to carry their cooperation in accordance to the Original Agreement.

Tranzcom Vice President of Corporate Development, Barry McGowan commented "The Company believes these enhancements to the agreement ensures the continued beneficial controlling interest in BTT, while providing the appropriate sales incentives and operational accountability."

Conditional approval from the TSX Venture Exchange was received on May 16, 2005 pending the issuance of a News Release.

About Tranzcom

Tranzcom China Security Networks Inc. is a Vancouver based Canadian company, trading on the TSX Venture Exchange under the symbol TSN. Tranzcom is a leading Security Network Service Provider in China, and operating a state of the art security dispatch centre in Beijing. Tranzcom's subsidiaries, Beijing Tranzcom Technology Co. and Beijing Huaxun Datacom Co. Ltd. design and manufacture security products and provide Integrated Security Service Solutions throughout China.

Corporate Inquiries

For further information, please contact Barry McGowan, Vice President, Corporate Development.

ON BEHALF OF THE BOARD

Barry McGowan, Vice President, Corporate Development

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.

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