EQUITY TRANSFER AGREEMENT

EQUITY TRANSFER AGREEMENT

This EQUITY TRANSFER AGREEMENT (this " Agreemen t"), dated as of July 1, 2008, by and between Jin Zhu Cai, an individual (the " Transferor ") and Jiang Huai Lin, an individual (the " Transferee ") (each a "Party" and collectively the "Parties").

BACKGROUND

The Transferor owns 24% of the equity of iASPEC Software Co. Ltd. (the " Company "), a limited liability company established and validly existing under the laws of the People’s Republic of China (the " PRC "). The Transferee owns 76% of the equity interest of the Company and is the Chief Executive and Chairman of Information Security Technology (China) Co. Ltd. (" IST "), a PRC limited liability company and the Company’s exclusive commercial partner, and of IST’s parent company, China Information Security Technology, Inc. (" CIST "), a Nevada corporation listed on the Nasdaq Global Select market. The Transferor agrees to transfer and sell to the Transferee, all of his equity in the Company (the " Equity "), and the Transferee agrees to purchase such Equity on the terms and conditions set forth in this Agreement, such that upon completion of the transfer hereunder, the Transferee shall fully own 100% of the equity and control power of the Company.

Pursuant to a management services agreement (" MSA "), dated as of July 1, 2007, by and among CIST, IST, the Company and the Parties, the Board of Directors of IST is required to authorize, in advance, certain material actions taken by the Company and its shareholders, including but not limited to, the sale or transfer by any of the Parties of any part of the Company’s equity held by them, including the Equity.

AGREEMENT

1.

Equity Transfer

1.1

On and subject to the terms and conditions of this Agreement, the Transferee agrees to purchase from the Transferor, and the Transferor agrees to sell to the Transferee the Equity of the Company for the consideration specified below in Section 2 hereof.

1.2

The Parties agree that from and after the Completion Date (defined herein), the Transferee will be entitled to all legal rights derived from the Equity and responsible for related legal obligations. All legal rights and obligations related to the Equity are determined by certain PRC laws and regulations and the articles of incorporation of the Company. The Transferee shall fully indemnify and shall keep indemnified the Transferee from any liabilities or debts in connection with the Equity, except those that have been disclosed to the Transferees prior to the execution of this Agreement. The Transferee shall have the right to claim damages against the Transferor if the Transferee incurs damages due to undisclosed liabilities or debts. " Completion Date " means the date on which the rights of ownership of the Equity have been transferred to the Transferee and the change of registration is complete in accordance with applicable PRC laws, administrative regulations, local regulations, department rules, normative documents and other administrative orders with a general binding force in the PRC; provided however , that the Completion Date shall be no later than July 15, 2008 .

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1.3

The Transferor shall provide the Transferee with any assistance necessary to effect the registration of the transfer of the Equity.

1.4

After the Completion Date, the Purchaser will become the sole owner of 100% of the equity in the Company.

2.

Purchasing Price and Payment Method

2.1

The consideration for the transfer of the Equity shall be RMB60,000,000 (approximately $8,720,996 at a conversion rate of RMB6.88:$1) (the " Purchase Price ").

2.2

Upon the terms and subject to the all of the conditions contained herein, Transferee shall pay the Purchase Price by transferring and delivering an aggregate of 1,527,855 shares of restricted common stock of CIST owned by Transferee, valued at $8,720,996 in the aggregate, or at $5.708 per share (the " Shares "). The Parties understand and acknowledge that the Purchase Price is based upon a valuation of the Equity at 24% of Company’s registered capital of RMB50 million, times a multiple of 5.

2.3

The Transferee shall deliver to the Transferor certificates evidencing the Shares, endorsed in blank or accompanied by duly executed assignment documents and including a Medallion Guarantee or a customary substitute therefor, on or before the Completion Date.

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3.

Conditions Precedent to Transfer

This Agreement shall become effective when all the terms and conditions set forth below are satisfied:

(1)

each Party has executed this Agreement;

(2)

the shareholder meeting of the Company has approved the transfer of the Equity; and

(3)

the Board of Directors of IST has approved the transactions contemplated by the Agreement, as required by the MSA.

4.

Representations, Warranties, and Undertakings

4.1

The Transferor hereby represents, warrants and undertakes to the Transferee unconditionally and irrevocably as follows:

(1)

The Transferor has and shall have full power and authority to enter into and execute this Agreement which constitutes binding obligations on the Transferor in accordance with the terms at the date of this Agreement;

(2)

The Transferor has all the legally required authorizations and approvals to execute the Agreement and perform the obligations hereunder;

(3)

The Transferor legally holds the Equity, free of pledge, mortgage, charges or claims, and the Transferor does not know any third party that has claimed or will claim any right which would have a material and adverse effect over all or part of Equity and there are no disputes, l