PLAN OF EXCHANGE BY WHICH CAPITAL RESOURCE FUNDING, INC. (a North Carolina corporation) SHALL ACQUIRE DA LIAN XIN YANG HIGH-TECH DEVELOPMENT CO. LTD. (a corporation organized under the laws of the Peoples’ republic of China)
Exhibit
10
BY
WHICH
CAPITAL
RESOURCE FUNDING, INC.
(a
North Carolina corporation)
SHALL
ACQUIRE
DA
LIAN ▇▇▇ ▇▇▇▇ HIGH-TECH
DEVELOPMENT
CO. LTD.
(a
corporation organized under the laws of the Peoples’ republic of
China)
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I.
RECITALS
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1.
The Parties to this Agreement:
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(1.1)
Capital Resource Funding, Inc.
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(1.2)
Da Lian ▇▇▇ ▇▇▇▇ High-tech Development Co. Ltd.
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(1.3)
▇▇▇▇▇ ▇▇▇▇▇
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2.
Capital of the Parties:
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(2.1)
The Capital of CFRU
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(2.2)
The Capital of ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ High-tech Development Co. Ltd.
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3.
Transaction Descriptive Summary:
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4.
SEC compliance.
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5.
North Carolina compliance.
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6.
Audited Financial Statements.
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II.
PLAN OF EXCHANGE
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1.
Conditions Precedent to Closing.
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(1.1)
Shareholder Approval.
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(1.2)
Board of Directors.
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(1.3)
Due Diligence Investigation.
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(1.4)
The rights of dissenting shareholders,
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(1.5)
All of the terms, covenants and conditions
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(1.6)
The representations and warranties
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(1.7)
Certification of ▇▇▇▇▇ ▇▇▇▇▇...…
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(1.8)
Absence of CRFU Liabilities, Corporate Name Rights and Transaction
Fees
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(1.9)
Delivery of Audited Financial Statements
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2.
Conditions Concurrent and Subsequent to Closing.
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(2.1)
Delivery of Registered Capital of Sun Group.
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(2.2)
Acquisition Share Issuance and Purchase of Common Stock and Option
to
Subscribe and Purchase New Shares
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(2.3)
Resignation of ▇▇▇▇▇ ▇▇▇▇▇ and Appointment of Sun Group
Nominee
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(3.1)
Exchange and Reorganization:
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(3.2)
Delivery of Common Stock and Grant of Option:
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(3.3)
Issuance of Common Stock:
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(3.4)
Closing/Effective Date:
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(3.5)
Surviving Corporations
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(3.6)
Rights of Dissenting Shareholders:
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(3.7)
Service of Process and Address:
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(3.8)
Surviving Articles of Incorporation:
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(3.9)
Surviving By-Laws:
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(3.10)
Further Assurance, Good Faith and Fair Dealing:
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(3.11)
General Mutual Representations and Warranties.
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(3.11.1)
Organization and Qualification.
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(3.11.2)
Corporate Authority.
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(3.11.3)
Ownership of Assets and Property.
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(3.11.4)
Absence of Certain Changes or Events.
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(3.11.5)
Absence of Undisclosed Liabilities.
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(3.11.6)
Legal Compliance.
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(3.11.7)
Legal Proceedings.
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(3.11.8)
No Breach of Other Agreements.
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(3.11.9)
Capital Stock.
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(3.11.10)
SEC Reports, Liabilities and Taxes
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(3.11.11)
Brokers' or Finder's Fees.
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(3.11)
Miscellaneous Provisions
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(3.11.1)
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(3.11.2)
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(3.11.3)
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(3.11.4)
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(3.11.5)
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(3.11.6)
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4.
Termination.
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5.
Closing
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6.
Merger Clause
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Signatures
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2
BY
WHICH
CAPITAL
RESOURCE FUNDING, INC.
(a
North Carolina corporation)
SHALL
ACQUIRE
DA
LIAN ▇▇▇ ▇▇▇▇ HIGH-TECH DEVELOPMENT CO. LTD.
(a
corporation organized under the laws of the Peoples' Republic of
China)
ADJUSTMENTS:
lead This
Plan of Exchange (“Agreement”
or “Plan of Exchange”) is made and dated as of this 6th day of September, 2006,
and is intended to supersede all previous oral or written agreements, if any,
between the parties, with respect to its subject matter. Notwithstanding the
foregoing, it is subject to, and shall be interpreted together with the Letter
of Intent, dated August 31, 2006 ("LOI"), and the Escrow Agreement, dated August
31, 2006 ("Escrow Agreement"). This Agreement anticipates that extensive due
diligence shall have been performed by both parties. As stated in the Letter
of
Intent, all due diligence shall have been completed by the Parties no later
than
September 6, 2006.
3
I.
RECITALS
1.
The Parties to this Agreement:
(1.1)
Capital Resource Funding, Inc. ("CRFU"), ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇,
a North
Carolina corporation.
(1.2)
Da Lian ▇▇▇ ▇▇▇▇ High-tech Development Co. Ltd. ("Sun Group"),
▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇’ ▇▇▇▇▇▇▇▇ of China a
corporation organized and existing under the laws of the Peoples' Republic
of
China.
(1.3)
▇▇▇▇▇ ▇▇▇▇▇, President,
Chief Executive Officer and controlling shareholder of CRFU ("▇▇.
▇▇▇▇▇").
2.
The Capital of the Parties:
(2.1)
The Capital of CRFU consists
of 100,000,000 shares of common voting stock of $.00000005
par
value authorized, of which 12,347,971 shares are issued and outstanding, and
100,000,000 shares of preferred stock of $.00000005
par value authorized,
of
which no shares are issued and outstanding.
(2.2)
The Capital of Sun Group consists
of RMB 106,000,000 in registered capital (US$1=RMB 8), which for the purposes
of
this Agreement, is referred to as “common stock” or “capital
stock”.
3.
Transaction Descriptive Summary:
CRFU and
its directors and shareholders have approved the acquisition of Sun Group and
the shareholders of Sun Group (“Sun Group Shareholders”) have consented to the
acquisition of Sun Group by CRFU, a publicly traded company. CRFU would acquire
a 70% interest (RMB 74,200,000) in Sun Group in exchange for the issuance of
30,000,000 new shares of CRFU to Sun Group Shareholders. CRFU will also grant
to
Sun Group a two (2) year non-transferable option to subscribe for and purchase
10,000,000 new shares of CRFU stock in exchange for RMB 31,800,000. In addition,
Sun Group and/or the Sun Group Shareholders will acquire 9,500,000 freely
transferable common shares of CRFU from ▇▇. ▇▇▇▇▇ for a payment by Sun Group
and/or the Sun Group Shareholders of an amount equal to $600,000, less related
expenses. The distributions of payments will be made by Sun Group to CRFU and
▇▇. ▇▇▇▇▇ in accordance with the Escrow Agreement. The
above
purchase and issuance will give Sun
Group
a
'controlling interest' in CRFU
representing approximately 94% of
the
issued and outstanding shares.
The
transaction will not immediately close but shall be conditioned upon
(1)
the
delivery into escrow of the 9,500,000 shares from ▇▇. ▇▇▇▇▇, (2) the delivery
into escrow of the 30,000,000 shares for the benefit of Sun
Group
Shareholders, (3) grant to Sun Group of the two (2) year option for the
subscription and purchase of the additional 10,000,000 new shares for RMB
31,800,000 (4) the absence of material liabilities in CRFU
as
defined by the Generally Accepted Accounting Principles, and (5)
the
delivery into escrow the copies of restricted and non-transferable stock
certificates pursuant to the lock-up agreement, including 250,000 shares
belonging to ▇▇. ▇▇▇▇▇, 200,000 shares belonging to ▇▇▇▇▇ ▇▇▇▇▇ and 200,000
shares belonging to ▇▇▇▇▇▇▇ ▇▇▇▇▇,
prior to
Closing. The parties intend that the transactions qualify and meet the Internal
Revenue Code requirements for a tax free reorganization, in which there is
no
corporate gain or loss recognized by the parties, with reference to Internal
Revenue Code (IRC) sections 354 and 368.
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4.
SEC compliance.
CRFU
shall cause the filing with the Commission of a Current Report on Form 8-K,
within four business days of the date hereof, reporting the execution of this
Agreement, and, after the closing,
the filing and mailing to its shareholders of an Information Statement on
Schedule 14F-1 pursuant to Rule 14f-1 under the Securities Exchange Act of
1934,
as amended,
which is required to be filed and mailed ten days before a change in the
majority of the Board of Directors of CRFU other than at a shareholders’
meeting. The parties contemplate that any change in the majority of the Board
of
Directors
will occur after the closing.
5.
North Carolina compliance.
Articles
of Exchange are required to be filed by North Carolina law as the last act
to
make the acquisition final and effective under North Carolina law.
6.
Audited Financial Statements.
Certain
filings under the Securities Exchange Act of 1934, such as a Current Report
on
Form 8-K, require audited financial statements of Sun Group to be filed with
the
SEC within 71 days of the initial Form 8-K filing with respect to this
transaction. In connection with CRFU’s filing of a Current Report on Form 8-K/A
within 71 days after the closing, as it relates to this transaction, audited
financial statements of Sun Group will be filed with the SEC in accordance
with
Form 8-K. Sun Group has agreed to provide audited financial statements prepared
in conformity with U.S. GAAP to CRFU within 71 days upon signing this Plan
of
Exchange.
The
Remainder of this Page is Intentionally left Blank
5
II.
PLAN OF EXCHANGE
1.
Conditions Precedent to Closing.
The
obligation of the parties to consummate the transactions contemplated herein
are
subject to the fulfillment or waiver prior to the closing of the following
conditions precedent:
(1.1)
Shareholder Approval.
Each
corporate party shall have secured shareholder approval for this transaction,
if
required, in accordance with the laws of its place of incorporation and its
constituent documents.
(1.2)
Board of Directors.
The
Boards of Directors of each corporate party shall have approved the transaction
and this Agreement, in accordance with the laws of its place of incorporation
and its constituent documents.
(1.3)
Due Diligence Investigation.
Each
party shall have furnished to the other party all corporate and financial
information which is customary and reasonable, to conduct its respective due
diligence, normal for this kind of transaction. If either party determines
that
there is a reason not to complete the Plan of Exchange as a result of their
due
diligence examination, then they must give written notice to the other party
prior to the expiration of the due diligence examination period. The due
diligence period, for purposes of this paragraph, shall have expired on
September 6, 2006. The Closing Date shall be three days after the satisfaction
or waiver of all of the conditions precedent to closing set forth in this Plan
of Exchange, unless extended to a later date by mutual agreement of the parties.
(1.4)
The rights of dissenting shareholders,
if any,
of each party shall have been satisfied or will be satisfied within a reasonable
time and the Board of Directors of each party shall have determined to proceed
with the Plan
of
exchange.
(1.5)
All of the terms, covenants and conditions
of the
Plan
of
exchange
to be
complied with or performed by each party before Closing shall have been complied
with, performed or waived in writing;
(1.6)
The representations and warranties
of the
parties, contained in the Plan
of
exchange,
as
herein contemplated, except as amended, altered or waived by the parties in
writing, shall be true and correct in all material respects at the Closing
Date
with the same force and effect as if such representations and warranties are
made at and as of such time; and each party shall provide the other with a
certificate, certified either individually or by an officer, dated the Closing
Date, to the effect, that all conditions precedent have been met, and that
all
representations and warranties of such party are true and correct as of that
date. The form and substance of each party's certification shall be in form
reasonably satisfactory to the other. In addition, it shall be a condition
precedent to Sun Group’s obligation to consummate the closing that a certificate
of good standing on CRFU shall have been delivered to it from the Secretary
of
State of North Carolina.
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Certification
of ▇▇. ▇▇▇▇▇ and CRFU. It
shall be a condition precedent to the obligation of Sun Group and
the Sun
Group Shareholders to consummate the transactions contemplated herein
that
a certification of ▇▇. ▇▇▇▇▇, signed in his individual capacity,
and
substantially similar to the following form be delivered to Sun Group
on
the date of execution:
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| (i) |
CRFU
is a corporation duly organized and validly existing under the laws
of the
State of North Carolina and has all requisite corporate power to
own,
operate and lease its properties and assets and to carry on its
business.
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| (ii) |
The
authorized capitalization and the number of issued and outstanding
capital
shares of CRFU are accurately and completely set forth in the Plan
of
Exchange.
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| (iii) |
The
issued and outstanding shares of CRFU (including 30,000,000 new investment
shares of Common Stock of CRFU to be issued to the Sun Group Shareholders
pursuant to Regulation S) have been duly authorized and validly issued
and
are fully paid and non-assessable.
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| (iv) |
▇▇.
▇▇▇▇▇ has the full right, power and authority to sell, transfer and
deliver the 9,500,000 shares of Common Stock of CRFU to the Sun Group
Shareholders for the total purchase price of $600,000, and CRFU has
the
full right, power and authority to sell, transfer and deliver the
30,000,000 new investment shares of Common Stock of CRFU to the Sun
Group
Shareholders, and, upon delivery of the certificates representing
such
shares as contemplated in the Plan of Exchange, will transfer to
the Sun
Group Shareholders good, valid and marketable title thereto, free
and
clear of all liens.
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| (v) |
CRFU
has taken all steps in connection with the Plan of Exchange and the
issuance of the 30,000,000 new investment shares of Common Stock
of CRFU
to the Sun Group Shareholders pursuant to Regulation S, which are
necessary to comply in all material respects with the Securities
Act of
1933, as amended, and the Securities Exchange Act of 1934, as well
as the
rules and regulations promulgated pursuant thereto.
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| (vi) |
▇▇.
▇▇▇▇▇ and CRFU has granted to Sun Group the two (2) year option for
the
subscription and purchase of 10,000,000 new shares of CRFU stock
at the
price of RMB 31,800,000.
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| (vii) |
CRFU
has no material liabilities as such term are defined by U.S. Generally
Accepted Accounting Principles.
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| (vii) |
CRFU
and ▇▇. ▇▇▇▇▇ confirm that ▇▇. ▇▇▇▇▇
shall retain 500,000 shares of CRFU
as
an investment, of which 250,000 shall be restricted and non-transferable
pursuant to the lock-up agreement, for twelve months after the Closing.
In
addition, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ also agree, pursuant to the
lock-up agreement, that their 200,000 restricted and non-transferable
shares of CRFU, respectively, shall be locked-up and non-transferable
for
a period of twelve months after
Closing.
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(1.8)
Absence of CRFU Liabilities, Corporate Name Rights and Transaction Fees.
CRFU
shall have no material liabilities as such term is defined by U.S. Generally
Accepted Accounting Principles and counsel to CRFU shall deliver to Sun Group
a
comfort letter with respect to the absence of said liabilities prior to closing.
Pursuant to the LOI, ▇▇. ▇▇▇▇▇ will retain the right to future use of Capital
Resource Funding, Inc. only if the new management changes CRFU's corporate
name.
All expenses to prepare and file documents connected to the Plan of Exchange
will be paid by Sun Group. The quarterly accounting review fees will also be
paid by Sun Group after Closing.
(1.9)
Delivery of Audited Financial Statements.
Sun
Group shall have delivered to CRFU audited financial statements and an audit
report thereon for the year ended December 31, 2005 and unaudited financial
statements for the quarter ended August 31, 2006, any required audits shall
be
prepared by a PCAOB member audit firm in accordance with U.S. GAAP at Sun
Group’s expense.
2.
Conditions Concurrent and Subsequent to Closing.
(2.1)
Delivery of Registered Capital of Sun Group. Immediately
upon or within 30 days from the date of this Agreement, CRFU shall acquire
70%
of the beneficial interest of Da Lian ▇▇▇ ▇▇▇▇ High-tech Development Co.
Ltd.
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(2.2)
Acquisition Share Issuance and Purchase of Common Stock and Option to Subscribe
and Purchase New Shares. Immediately
upon the Closing, ▇▇. ▇▇▇▇▇ shall deliver his 9,500,000 shares of Common Stock
of CRFU to the Sun Group Shareholders in exchange for total payments of $600,000
in cash, less related expenses. In addition, CRFU shall issue 30,000,000 new
investment shares of Common Stock of CRFU to the Sun Group Shareholders in
exchange for a 70% interest in Sun Group, and, as a result, the then outstanding
shares shall be as follows:
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CRFU
Shares Issued and Outstanding
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12,347,971
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Of
which, shares purchased from ▇▇. ▇▇▇▇▇
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9,500,000
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Acquisition
Share Issuance
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30,000,000
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Resulting
Total
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42,347,971
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Of
which, shares controlled by Sun Group
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39,500,000
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CRFU
shall grant to Sun Group a two (2) year non-transferable option to subscribe
for
and purchase 10,000,000 new shares of CRFU stock in exchange for RMB
31,800,000.
(2.3)
Resignation of ▇▇▇▇▇ ▇▇▇▇▇ and Appointment of Sun Group Nominee.
On
or
immediately after the Closing, ▇▇▇▇▇ shall resign from the positions of director
and officer of CRFU
and a
nominee of Sun
Group
shall be
appointed to the Board of Directors of CRFU
to fill
the vacancy created by ▇▇▇▇▇'s resignation. Said appointment will occur within
10 days of the closing after proper notice has been given pursuant
to Rule 14f-1 under the Securities Exchange Act of 1934, as amended.
Upon
resignation, ▇▇▇▇▇ shall deliver to Greentree Financial Group, Inc. a signed
letter regarding and confirming his resignation to the positions of director
and
officer of CRFU.
3.
Plan of Exchange
(3.1)
Exchange and Reorganization: CRFU and
Sun
Group shall be hereby reorganized, such that CRFU shall acquire a 70% interest
in Sun Group, and Sun Group shall become a 70% owned subsidiary of
CRFU.
(3.2)
Delivery of Common Stock and Grant of Option:
Upon
signing this Plan of Exchange, ▇▇. ▇▇▇▇▇ shall deliver the 9,500,000 shares
of
Common Stock of CRFU to or for the Sun Group Shareholders. In addition, ▇▇.
▇▇▇▇▇ and CRFU shall granted to Sun Group a two (2) year option for the
subscription and purchase of 10,000,000 new shares of CRFU stock at the price
of
RMB 31,800,000.
(3.3)
Issuance of Common Stock:
Within
60 days upon the effective date of the Plan, CRFU shall issue 30,000,000 new
investment shares of Common Stock of CRFU to or for the Sun Group
Shareholders.
(3.4)
Closing/Effective Date:
The
Plan
of
exchange shall
become effective immediately upon approval and adoption by the parties hereto,
in the manner provided by the law of the places of incorporation and constituent
corporate documents, and upon compliance with governmental filing requirements,
such as, without limitation, filings under the Securities Exchange Act of 1934,
and the filing of Articles of Exchange, if applicable under State Law. Closing
shall occur when all conditions of closing
have been met or are waived by the parties. The parties anticipate the filing
of
a Schedule 14F-1 Information Statement at least ten days prior to any change
in
majority of the Board of Directors of CRFU.
The
Parties expect to make such filing after the Closing.
8
(3.5)
Surviving Corporations:
Both
corporations shall survive the exchange and reorganization herein contemplated
and shall continue to be governed by the laws of its respective jurisdiction
of
incorporation.
(3.6)
Rights of Dissenting Shareholders:
Each
Party is the entity responsible for the rights of its own dissenting
shareholders, if any.
(3.7)
Service of Process and Address:
Each
corporation shall continue to be amenable to service of process in its own
jurisdiction, exactly as before this acquisition. The address of CRFU is
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇.
The
address of Sun Group is ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇’
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
(3.8)
Surviving Articles of Incorporation:
the
Articles of Incorporation of each Corporation shall remain in full force and
effect, unchanged.
(3.9)
Surviving By-Laws:
the
By-Laws of each Corporation shall remain in full force and effect,
unchanged.
(3.10)
Further Assurance, Good Faith and Fair Dealing:
the
Directors of each Company shall and will execute and deliver any and all
necessary documents, acknowledgments and assurances and do all things proper
to
confirm or acknowledge any and all rights, titles and interests created or
confirmed herein; and both companies covenant expressly hereby to deal fairly
and in good faith with each other and each others shareholders. In furtherance
of the parties desire, as so expressed, and to encourage timely, effective
and
businesslike resolution the parties agree that any dispute arising between
them,
capable of resolution by arbitration, shall be submitted to binding arbitration.
As a further incentive to private resolution of any dispute, the parties agree
that each party shall bear its own costs of dispute resolution and shall not
recover such costs from any other party.
(3.11)
General Mutual Representations and Warranties.
The
purpose and general import of the Mutual Representations and Warranties are
that
each party has made appropriate full disclosure to the others, that no material
information has been withheld, and that the information exchanged is accurate,
true and correct. These warranties and representations are made by each party
to
the other, unless otherwise provided, and they speak and shall be true
immediately before Closing.
(3.11.1)
Organization and Qualification.
Each
Corporation is duly organized and in good standing (where applicable as a matter
of law), and is duly qualified to conduct any business it may be conducting,
as
required by law or local ordinance.
(3.11.2)
Corporate Authority.
Each
Corporation has corporate authority, under the laws of its jurisdiction and
its
constituent documents, to do each and every element of performance to which
it
has agreed, and which is reasonably necessary, appropriate and lawful, to carry
out this Agreement in good faith.
(3.11.3)
Ownership of Assets and Property.
Each
Corporation has lawful title and ownership of it property as reported to the
other, and as disclosed in its financial statements.
9
(3.11.4)
Absence of Certain Changes or Events.
Each
Corporation has not had any material changes of circumstances or events which
have not been fully disclosed to the other party, and which, if different than
previously disclosed in writing, have been disclosed in writing as currently
as
is reasonably practicable. Specifically, and without limitation:
|
(3.11.4-a)
The
business of each Corporation shall be conducted only in the ordinary
and
usual course and consistent with its past practice, and neither party
shall purchase or sell (or enter into any agreement to so purchase
or
sell) any properties or assets or make any other changes in its
operations, respectively, taken as a whole, or provide for the issuance
of, agreement to issue or grant of options to acquire any shares,
whether
common, redeemable common or convertible preferred, in connection
therewith;
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(3.11.4-b)
Except
as set forth in this Plan of Exchange, neither corporation shall
(i) amend
its Articles of Incorporation or By-Laws, (ii) change the number
of
authorized or outstanding shares of its capital stock, or (iii) declare,
set aside or pay any dividend or other distribution or payment in
cash,
stock or property to the extent that which might contradict or not
comply
with any clause or condition set forth in this Plan of Exchange,
LOI or
Escrow Agreement;
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(3.11.4-c)
Except
for the issuance of shares set forth in this Plan of Exchange, neither
Corporation shall (i) issue, grant or pledge or agree or propose
to issue,
grant, sell or pledge any shares of, or rights of any kind to acquire
any
shares of, its capital stock, (ii) incur any indebtedness other than
in
the ordinary course of business, (iii) acquire directly or indirectly
by
redemption or otherwise any shares of its capital stock of any class
or
(iv) enter into or modify any contact, agreement, commitment or
arrangement with respect to any of the
foregoing;
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(3.11.4-d)
Except
in the ordinary course of business, neither party shall (i) increase
the
compensation payable or to become payable by it to any of its officers
or
directors; (ii) make any payment or provision with respect to any
bonus,
profit sharing, stock option, stock purchase, employee stock ownership,
pension, retirement, deferred compensation, employment or other payment
plan, agreement or arrangement for the benefit of its employees (iii)
grant any stock options or stock appreciation rights or permit the
exercise of any stock appreciation right where the exercise of such
right
is subject to its discretion (iv) make any change in the compensation
to
be received by any of its officers; or adopt, or amend to increase
compensation or benefits payable under, any collective bargaining,
bonus,
profit sharing, compensation, stock option, pension, retirement,
deferred
compensation, employment, termination or severance or other plan,
agreement, trust, fund or arrangement for the benefit of employees,
(v)
enter into any agreement with respect to termination or severance
pay, or
any employment agreement or other contract or arrangement with any
officer
or director or employee, respectively, with respect to the performance
or
personal services that is not terminable without liability by it
on thirty
days notice or less, (vi) increase benefits payable under its current
severance or termination, pay agreements or policies or (vii) make
any
loan or advance to, or enter into any written contract, lease or
commitment with, any of its officers or
directors;
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(3.11.4-e)
Neither
party shall assume, guarantee, endorse or otherwise become responsible
for
the obligations of any other individual, firm or corporation or make
any
loans or advances to any individual, firm or corporation, other than
obligations and liabilities expressly assumed by the other that
party;
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(3.11.4-f)
Neither
party shall make any investment of a capital nature either by purchase
of
stock or securities, contributions to capital, property transfers
or
otherwise, or by the purchase of any property or assets of any other
individual, firm or corporation.
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(3.11.5)
Absence of Undisclosed Liabilities.
Each
Corporation has, and has no reason to anticipate having, any material
liabilities which have not been disclosed to the other, in the financial
statements or otherwise in writing.
(3.11.6)
Legal Compliance.
Each
Corporation shall comply in all material respects with all Federal, state,
local
and other governmental (domestic or foreign) laws, statutes, ordinances, rules,
regulations (including all applicable securities laws), orders, writs,
injunctions, decrees, awards or other requirements of any court or other
governmental or other authority applicable to each of them or their respective
assets or to the conduct of their respective businesses, and use their best
efforts to perform all obligations under all contracts, agreements, licenses,
permits and undertaking without default.
(3.11.7)
Legal Proceedings.
Each
Corporation has no legal proceedings, administrative or regulatory proceeding,
pending or suspected, which have not been fully disclosed in writing to the
other.
(3.11.8)
No Breach of Other Agreements.
This
Agreement, and the faithful performance of this Agreement, will not cause any
breach of any other existing agreement, or any covenant, consent decree, or
undertaking by either, not disclosed to the other.
(3.11.9)
Capital Stock.
The
issued and outstanding shares and all shares of capital stock of each
Corporation is as detailed herein, that all such shares and options are in
fact
issued and outstanding, duly and validly issued, were issued as and are fully
paid and non-assessable shares, and that, other than as represented in writing,
there are no other securities, options, warrants or rights outstanding, to
acquire further shares of such
Corporation.
(3.11.10)
SEC
Reports, Liabilities and Taxes.(i) CRFU has
filed
all required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since the date of its
registration under the Securities Act of 1933, as amended (collectively,
including all exhibits thereto, the "CRFU
SEC
Reports"). None of the CRFU
SEC
Reports, as of their respective dates, contained any untrue statements of
material fact or failed to contain any statements which were necessary to make
the statements made therein, in light of the circumstances, not misleading.
All
of the CRFU
SEC
Reports, as of their respective dates (and as of the date of any amendment
to
the respective CRFU
SEC
Reports), complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder.
(ii)
Except as disclosed in the CRFU
SEC
Reports filed prior to the date hereof, CRFU
has not
incurred any liabilities or obligations (whether or not accrued, contingent
or
otherwise) that are of a nature that would be required to be disclosed on a
balance sheet of CRFU
or the
footnotes thereto prepared in conformity with GAAP, other than (A) liabilities
incurred in the ordinary course of business or (B) liabilities that would not,
in the aggregate, reasonably be expected to have a material adverse effect
on
CRFU.
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(iii)
Except as disclosed in the CRFU
SEC
Reports filed prior to the date hereof, CRFU
(i) has
prepared in good faith and duly and timely filed (taking into account any
extension of time within which to file) all material tax returns required to
be
filed by any of them and all such filed tax returns are complete and accurate
in
all material respects; (ii) have paid all taxes that are shown as due and
payable on such filed tax returns or that CRFU
is
obligated to pay without the filing of a tax return; (iii) have paid all other
assessments received to date in respect of taxes other than those being
contested in good faith for which provision has been made in accordance with
GAAP on the most recent balance sheet included in CRFU’s
financial statements; (iv) have withheld from amounts owing to any employee,
creditor or other person all taxes required by law to be withheld and have
paid
over to the proper governmental authority in a timely manner all such withheld
amounts to the extent due and payable; and (v) have not waived any applicable
statute of limitations with respect to United States federal or state income
or
franchise taxes and have not otherwise agreed to any extension of time with
respect to a United States federal or state income or franchise tax assessment
or deficiency.
(3.11.
11) Brokers' or Finder's Fees.
Each
Corporation is not aware of any claims for brokers' fees, or finders' fees,
or
other commissions or fees, by any person not disclosed to the other, which
would
become, if valid, an obligation of either company.
(3.12)
Miscellaneous Provisions
(3.12.1)
.
Except
as required by law, no party shall provide any information concerning any aspect
of the transactions contemplated by this Agreement to anyone other than their
respective officers, employees and representatives without the prior written
consent of the other parties hereto. The aforesaid obligations shall terminate
on the earlier to occur of (a) the Closing, or (b) the date by which any party
is required under its articles or bylaws or as required by law, to provide
specific disclosure of such transactions to its shareholders, governmental
agencies or other third parties. In the event that the transaction does not
close, each party will return all confidential information furnished in
confidence to the other. In addition, all parties shall consult with each other
concerning the timing and content of any press release or news release to be
issued by any of them.
(3.12.2)
This
Agreement may be executed simultaneously in two or more counterpart originals.
The parties can and may rely upon facsimile signatures as binding under this
Agreement, however, the parties agree to forward original signatures to the
other parties as soon as practicable after the facsimile signatures have been
delivered.
(3.12.3)
The
Parties to this Agreement have no wish to engage in costly or lengthy litigation
with each other. Accordingly, any and all disputes which the parties cannot
resolve by agreement or mediation shall be submitted to binding arbitration
under the rules and auspices of the American Arbitration Association. As a
further incentive to avoid disputes, each party shall bear its own costs, with
respect thereto, and with respect to any proceedings in any court brought to
enforce or overturn any arbitration award. This provision is expressly intended
to discourage litigation and to encourage orderly, timely and economical
resolution of any disputes which may occur.
(3.12.4)
If
any
provision of this Agreement or the application thereof to any person or
situation shall be held invalid or unenforceable, the remainder of the Agreement
and the application of such provision to other persons or situations shall
not
be effected thereby but shall continue valid and enforceable to the fullest
extent permitted by law.
(3.12.5)
No
waiver
by any party of any occurrence or provision hereof shall be deemed a waiver
of
any other occurrence or provision.
(3.12.6)
The
parties acknowledge that both they and their counsel have been provided ample
opportunity to review and revise this Agreement and that the normal rule of
construction shall not be applied to cause the resolution of any ambiguities
against any party presumptively. The Agreement shall be governed by and
construed in accordance with the laws of the State of North
Carolina.
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4.
Termination.
The
Plan
of
exchange
may be
terminated by written notice, at any time prior to closing, (i) by mutual
consent, (ii) by either party during the due diligence phase, (iii) by either
party, in the event that the transaction represented by the anticipated
Plan
of
exchange
has not
been implemented and approved by the proper governmental authorities 60 days
from the date of this Agreement, (iv) if payments scheduled in the Escrow
Agreement are not received when due or (v) by either party in the event that
a
condition of closing is not met by September 6, 2006. In the event that
termination of the Plan
of
exchange
by
either or both, as provided above, the Plan
of
exchange
shall
forthwith become void and there shall be no liability on the part of either
party or their respective officers and directors.
5.
Closing.
The
parties hereto contemplate that the closing of this Plan of Exchange shall
occur
no more than three days after all of the conditions precedent have been met
or
waived. The closing deliveries will be made pursuant to this Agreement and
the
LOI and the Escrow Agreement. Upon signing this Plan of Exchange, the
certificate of the
9,500,000 shares of Common Stock of CRFU from ▇▇. ▇▇▇▇▇ will
be
delivered (along with the Option to subscribe and purchase 10,000,000 shares)
to
Sun
Group
for
distribution to the Sun
Group
Shareholders and ▇▇. ▇▇▇▇▇ shall be paid by Sun
Group
and/or
the Sun
Group
Shareholders an amount aggregately equal to $600,000, less related expenses.
In
addition, within 60 days of signing the Plan of Exchange, CRFU
shall
issue 30,000,000
new investment shares of Common Stock of CRFU
pursuant
to Regulation S under the Securities Act of 1933, as amended, to the
Sun
Group
shareholders for a 70% interest in Sun
Group.
The
parties acknowledge that the Escrow Agreement has a default provision that
governs the rights of the parties in the event that certain performances are
not
made on a timely basis and they expressly accept the terms thereof.
6.
Merger Clause. This
Plan
of Exchange, together with the LOI and Escrow Agreement, constitute the entire
agreement of the parties hereto with respect to the subject matter hereof,
and
such documents supercede all prior understandings or agreements between the
parties hereto, whether oral or written, with respect to the subject matter
hereof, all of which are hereby superceded, merged and rendered null and
void.
The
Remainder of this Page is Intentionally left Blank
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The
parties hereto, intending to be bound, hereby sign this Plan of Exchange below
as of the date first written above.
CAPITAL
RESOURCE FUNDING, INC. ("CRFU")
▇▇▇▇▇
▇▇▇▇▇
By: ___________________________
________________________
Name:
▇▇▇▇▇
▇▇▇▇▇,
(Individually)
Title:
Chief Executive Officer
Majority
Shareholder
/
Selling Shareholder
▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇ HIGH-TECH DEVELOPMENT CO. LTD. ("SUN GROUP")
By: ___________________________
Name:
▇▇▇▇, ▇▇▇
Title:
President
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