Exhibit 10.1

 
STOCK PURCHASE AGREEMENT

 
This STOCK PURCHASE AGREEMENT is made as of May 15, 2014 by and between CN
Resources, Inc., a Nevada corporation (the “Company”), 1547698 Ontario Limited,
a company organized under the laws of Ontario, Canada (“Ontario”), and Shanghai
Yuankai Group Co., Ltd., a company organized under the law of the People's
Republic of China (“Yuankai”). Each of Ontario and Yuankai shall also be
referred to as “Purchaser,” and together, as “Purchasers”.

RECITALS

 
1. Ontario is indirectly controlled by Oliver Xing , a resident of Canada
(“Xing”), who owns, beneficially and  of record, a total of 5,000,000 shares of
Common  Stock prior  to the consummation of the transactions contemplated
herein, which constitutes 19.16% of all issued and outstanding capital stock of
the Company;

2. Yuankai owns, beneficially and of record, a total of 14,000,000 shares of
Common Stock prior to the consummation of the transactions contemplated herein,
which constitutes 53.64% of all issued and outstanding capital stock of the
Company and which it acquired form Xing pursuant to a Stock Purchase Agreement
dated April 25, 2014 (“SPA”);

3. The Company desires to sell to the Purchasers an aggregate of 30,000,000
shares of Common Stock (the “New Shares”) pursuant to the terms and conditions
set forth in this Agreement.

4. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree:
 
1.  Definitions. As used herein, the capitalized terms shall have the meanings
set forth below:
 
“Affiliate”  means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

“Agreement” means this Stock Purchase Agreement and all schedules and exhibits
attached hereto, as the same may be supplemented, modified or otherwise amended
from time-to-time.
 
“CNRR-Canada”  means  CN  Resources,  Inc.,  a  corporation  incorporated  under  the  laws  of Ontario,
Canada.
 
“Common Stock” means the common stock of the Company, par value $.00001 per
share. “Company” shall have the meaning set forth in the preamble.
 
“Contract” means any contract, agreement, commitment, arrangement, undertaking
or understanding of any kind whatsoever, written or oral, together with all
related amendments, modifications, supplements, waivers and consents.
 
“Dollar or Dollars” means the United States dollar or dollars.

“Exchange Act” means the Securities Exchange Act of 1934, and the rules and
regulations thereunder, each as amended.
 
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, or preemptive right.
 
 
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“Material Adverse Effect” means (i) a material adverse effect on the legality,
validity or enforceability of the Agreement, (ii) a material adverse effect on
the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company or CNRR-Canada, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis
its obligations hereunder.
 
“New Shares” shall have the meaning set forth in the Recitals. “Ontario” shall
have the meaning set forth in the Recitals.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Purchaser” or “Purchasers” shall have the meaning set forth in the Recitals.
“SEC” means the U.S. Securities and Exchange Commission.
 
“Schedule” means each schedule attached hereto on which the parties hereto
disclose information as part of their respective representations and warranties.
The number of each Schedule corresponds to the section number of the related
representation or warranty.
 
“Securities Act” means the Securities Act of 1933, and the rules and regulations
thereunder, each as amended.
 
“Trading Day” means a day on which the principal Trading Market is open for
trading.
 
“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any
successors to any of the foregoing). As of the date hereof the Trading Market is
OTCQB.
 
“Yuankai” shall have the meaning set forth in the Recitals.

2.  Issuance of New Shares.

2.1. Purchase Price. Subject to and upon the terms and conditions of this
Agreement, the Company hereby sells to , transfers, conveys, assigns and
delivers to each of the Purchasers, and each Purchaser hereby severally
purchases, acquires and accepts from the Company, the number of New Shares
listed opposite its name below for the respective purchase price set forth below
opposite its name (the “Purchase Price”).

Purchaser
New Shares Purchased
Total Purchase Price
Yuankai
25,000,000
$5,000,000
     
Ontario
5,000,000
$1,000,000

2.2. Payment of Purchase Price. Simultaneously with the execution and delivery
of this Agreement, each Purchaser shall pay to the Company, by wire transfer of
immediately available funds in US Dollars, the Purchase Price listed above
opposite the name of such Purchaser, to an account designated by the Company in
writing.

2.3. Issuance of Certificate: Together with the execution and delivery of this
Agreement, the Company will deliver to the transfer agent of the Company (the
“Transfer Agent”) instructions directing the Transfer Agent to deliver to each
Purchaser a certificate evidencing the New Shares hereby purchased by such
Purchaser, issued to such Purchaser, duly signed by or on behalf of the
appropriate officers of the Company.

 
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3. Representations and Warranties of Company. The Company hereby represents and
warrants to the Purchasers as follows:

3.1. Company.  Each of the Company and CNRR-Canada is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor CNRR-Canada is in violation or default of any of the
provisions of its respective certificate or articles of incorporation or bylaws.
Each of the Company and CNRR-Canada is duly qualified to conduct business and is
in good standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

3.2. Subsidiaries. The Company owns, of record, all of the issued and
outstanding capital stock or other equity interests of CNRR-Canada, free and
clear of any Liens. All of the issued and outstanding shares of capital stock of
CNRR-Canada are duly authorized, validly issued, fully paid, and non-assessable.
There are no outstanding options, warrants, rights, agreements, contracts,
calls, commitments or demands of any character obligating CNRR-Canada to issue
any authorized but unissued capital stock or securities, including securities
convertible into or evidencing the right to purchase any capital stock or other
securities of CNRR-Canada. Other than CNRR-Canada, the Company does not own,
directly or indirectly, any equity interests of any other entity.

3.3. Capital Stock. Prior to the consummation of the transactions contemplated
herein, the Company has a total of 26,100,000 shares of the Common Stock issued
and outstanding. All of such shares are validly issued, fully-paid and
non-assessable, and have been issued in accordance with applicable securities
laws. None of the Company’s preferred stock has been issued. There are no
outstanding options, warrants, rights, agreements, contracts, calls, commitments
or demands of any character obligating the Company to issue any authorized but
unissued stock or to redeem any capital stock or securities, including
securities convertible into or evidencing the right to purchase any capital
stock or other securities of the Company. After the consummation of the
transactions contemplated herein, the Company will have a total of 56,100,000
shares of the Common Stock issued and outstanding; Yuankai will own 39,000,000
shares of Common Stock, constituting 69.52% of all issued and outstanding
capital of the Company, and Xing will own, beneficially and of record, together
with the New Shares purchased by Ontario hereunder, a total of 10,000,000 shares
of Common, constituting 17.82% of all issued and outstanding capital stock of
the Company.

3.4. Authorization; Enforcement. The Company has the requisite power, authority
and power to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement and the performance of its
obligations hereunder by the Company have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s shareholders. This Agreement
has been duly executed by the Company and, when delivered, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law or
public policy.

3.5. No  Conflicts.  The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s or CNRR-Canada’s certificate of incorporation or
bylaws, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or result in the
creation of any Lien upon any of the properties or assets of the Company or
CNRR- Canada under any agreement, instrument or other understanding to which the
Company or CNRR-Canada is a party or by which any property or asset of the
Company or CNRR-Canada is bound, or (iii) conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or
CNRR-Canada is subject, or by which any property or asset of the Company or
CNRR-Canada is bound; except in the case of each of clauses (ii) and (iii), such
as could not reasonably be expected to result in a Material Adverse Effect.
 
 
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3.6. SEC Reports. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

3.7. Financial Statements. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited interim financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited interim statements, to normal,
immaterial, year-end audit adjustments.

3.8. Material Changes; Undisclosed Events, Liabilities or Developments. Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in an SEC Report filed prior to the
date hereof: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the SEC, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its shareholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, or any of their family members or Affiliates except
pursuant to existing Company stock option plans, if any. The Company does not
have pending before the SEC any request for confidential treatment of
information. Except for the transfer of the Shares contemplated by this
Agreement, no event, liability, fact, circumstance, occurrence or development
has occurred or exists, or is reasonably expected to occur or exist, with
respect to the Company or its subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to
be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least one trading day prior to the date that this representation is made.

3.9. Sarbanes-Oxley; Internal Accounting Controls. The Company and its
subsidiaries are in compliance in all material respects with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof. The Company and
its subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that:  (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and its subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and its subsidiaries and designed such disclosure
controls and procedures to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms. The Company’s certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and
its subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in the
internal control over financial reporting (as such term is defined in the
Exchange Act) of the Company and its subsidiaries that have materially affected,
or are reasonably likely to materially affect, the internal control over
financial reporting of the Company or its subsidiaries.
 
 
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3.10. Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the SEC is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received notice from any Trading Market to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.

3.11. No  Prior  Offering. Other than the sale by Xing pursuant to the SPA,
neither the Company, nor any of its Affiliates, nor any Person acting on its or
their behalf has, directly or indirectly, has made any offers or sales of any
security or solicited any offers to buy any security of the Company in the last
six months.

3.12. Regulation M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has: (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the New Shares, (ii) sold, bid
for, purchased, or paid any compensation for soliciting purchases of, the New
Shares, or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company.

3.13. Intangibles. The Company does not own any trademarks, trademark
registrations or applications therefor, trade names, patents or applications
therefor, copyrights, copyright registrations or applications therefor. No claim
has been made against the Company that the Company has infringed any unexpired
patent, trademark, trademark registration, trade name, copyright, copyright
registration, trade secret or any other proprietary or intellectual property
right of any party in connection with the operation of its business.

3.14. Title to Assets. Neither the Company nor CNRR-Canada owns any real
property. The Company and CNRR-Canada have good and marketable title in all
personal property, in each case free and clear of all Liens, except for (i)
Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and CNRR-Canada and (ii) Liens for the payment of federal, state
or other taxes, for which appropriate reserves have been made therefor in
accordance with GAAP and the payment of which is neither delinquent nor subject
to penalties.

3.15. Contracts. A true copy of each written Contract has been furnished to
Purchasers, (i) each Contract is legal, binding, enforceable and in full force
and effect; and will continue to be legal, binding, enforceable and in full
force and effect on identical terms following the Closing; (ii) the Company has
complied in all material respects with all provisions of each Contract, and to
the knowledge of the Company and Seller, any other party to each Contract is not
in breach or default under the Contract, and no event has occurred which with
notice or lapse of time would constitute a breach or default by the Company or,
to the knowledge of the Company and Seller, any other party; and (iii) no party
has repudiated any provision of any Contract.

Compliance. Neither the Company nor CNRR-Canada: (i) is in default under or in
violation of, nor has the Company or CNRR-Canada received notice of a claim that
it is in default under or that it is in violation of, any agreement or any other
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any judgment, decree, or order of any court, arbitrator or other
governmental authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.
 
 
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3.16. Taxes. A true copy of each such tax return has been furnished to the
Purchasers. Except for matters that would not, individually or in the aggregate,
have a Material Adverse Effect, the Company and CNRR-Canada each (i) has made or
filed all United States federal, state and local income, and all foreign income,
and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, and (iii) has set aside on its
books provision reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company or
CNRR-Canada know of no basis for any such claim.

3.17. Litigation. There is no Proceeding which (i) adversely affects or
challenges the legality, validity or enforceability of the Agreement or the New
Shares or (ii) would, if there were an unfavorable decision against the Company
or CNRR-Canada, have or reasonably be expected to result in a Material Adverse
Effect. There is not pending or, to the knowledge of the Company, contemplated,
any investigation by the SEC or any other governmental authority involving the
Company or any current or former director or officer of the Company. The SEC has
not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.

3.18. Permits  and  Licenses.  The Company and CNRR-Canada have all
certificates, authorizations, permits, licenses, orders and approvals
(collectively, “Permits”) issued by all federal, state, local or foreign
governmental or regulatory bodies required for each of them to carry on their
respective business as presently conducted, except where the failure to possess
such Permits could not reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor CNRR-Canada has received any notice of
proceedings relating to the revocation or modification of any Permit.

3.19. Broker Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Agreement. Neither Purchaser shall have any
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Agreement.

3.20. Approvals. Neither the execution and delivery by the Company of this
Agreement, nor the consummation by the Company of the transactions contemplated
by this Agreement, requires the consent or approval of, or the giving of advance
notice by the Company to, or the registration by the Company with, any federal,
state, local or foreign governmental authority.
 
3.21.  Employees.   Other than Xing, the Company does not have, and has
never had any employees.
 
3.22. Employee Compensation Plans. Neither the Company nor CNRR-Canada maintains
or contributes to, or has any obligation to contribute to or has any liability
(including a liability arising out of an indemnification, guarantee, hold
harmless or similar agreement) with respect to any plan, program, arrangement,
agreement or commitment which is a written employment, consulting or deferred
compensation agreement, or a written executive compensation, incentive bonus or
other bonus, employee pension, profit sharing, savings, retirement, stock
option, stock purchase, stock appreciation rights, severance pay, life, health,
disability or accident insurance plan, or other written employee benefit plan,
program, arrangement, agreement or commitment. Neither the Company nor
CNRR-Canada has any liability with respect to an obligation to provide benefits,
including death or medical benefits (whether or not insured) with respect to any
Person.
 
3.23. Shareholder Loans; Transactions with Affiliates. Except as set forth in
the Company’s periodic filing, there are no outstanding shareholder loans to
either the Company or CNRR-Canada. Except as set forth in the SEC Reports and
except for this Agreement and the SPA, none of the officers or directors of the
Company or CNRR-Canada and, to the knowledge of the Company, none of the
employees of the Company or CNRR-Canada is presently a party to any transaction
with the Company or CNRR-Canada (other than for services as employees, officers
and directors), other than for: (i) payment of salary or consulting fees for
services rendered, and (ii) reimbursement for expenses incurred on behalf of the
Company or CNRR-Canada.
 
 
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3.24. Insurance. The Company and CNRR-Canada have obtained adequate insurance
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and CNRR-Canada are engaged.

3.25. Foreign Corrupt Practices. Neither the Company nor CNRR-Canada or any
agent or other Person acting on behalf of the Company or CNRR-Canada, has: (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or CNRR-Canada (or made by any Person acting on
its behalf of which the Company is aware) which is in violation of law or (iv)
violated in any material respect any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended.

3.26. Investment Company. The Company is not, and is not an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

3.27. Registration Rights. No Person has any right to cause the Company to
effect  the registration under the Securities Act of any securities of the
Company or CNRR-Canada.

3.28. Disclosure. Except with respect to the material terms and conditions of
the transactions contemplated by this Agreement, the Company confirms that
neither the Company, nor any other Person acting on its behalf has provided
Purchasers or their agents or counsel with any information that they believe
constitutes or might constitute material, non-public information. The Company
understands and confirms that Purchasers may rely on the foregoing
representation in effecting transactions in securities of the Company. All of
the disclosure furnished by or on behalf of the Company to Purchasers regarding
the Company and CNRR-Canada, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is
true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and agrees that Purchasers have not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 4 hereof.

4. Representations and Warranties of Purchasers.  Each Purchaser hereby
represents and warrants severally, but not jointly, to the Company as follows:

4.1. Organization; Authority. Such Purchaser is a business company duly formed
under the laws of the jurisdiction in which it is formed, with full right,
company power and authority to enter into and to consummate the transactions
contemplated by the Agreement and to perform its obligations hereunder. The
execution and delivery of the Agreement and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary company action on the part of such Purchaser. This Agreement has been
duly executed by such Purchaser and, when delivered, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law or by public policy.

4.2. Own  Account. Such Purchaser understands that the New Shares are
"restricted securities." Such Purchaser is acquiring the New Shares for its own
account and not with a view to or for distributing or reselling such New Shares
or any part thereof in violation of the Securities Act or any applicable state
securities law. Such Purchaser has no present intention of distributing any of
such New Shares in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other Persons to distribute or regarding the distribution of such New Shares
in violation of the Securities Act or any applicable state securities law.
 
 
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4.3. Purchaser Status. Such Purchaser is either: (i) an "accredited investor" as
defined in the Securities Act, (ii) a "qualified institutional buyer" as defined
in the Securities Act, or (iii) a non U.S.-Person as such term is defined in
Rule 902 of Regulation S promulgated under the Securities Act, and such
Purchaser is able to bear the economic risk of an investment in the Securities.
Such Purchaser is not required to be registered as a broker- dealer under
Section 15 of the Exchange Act.

4.4. Experience   of   Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the New Shares, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the New Shares and, at the present time, is able to
afford a complete loss of such investment.

4.5. General Solicitation. Such Purchaser is not purchasing the New Shares as a
result of any advertisement, article, notice or other communication regarding
the New Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

4.6. No  Conflicts. The execution, delivery and performance by such Purchaser of
this Agreement and the consummation by such Purchaser of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of such Purchaser’s Articles of Association or other charter
documents, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under any agreement,
instrument or other understanding to which such Purchaser is a party, or (iii)
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which such Purchaser is subject.
 
5.  Covenants of Parties.

5.1. Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m.
(New York City time) on the Trading Day immediately following the execution and
delivery of this Agreement, issue a press release disclosing the material terms
of the transactions contemplated hereby, (b) file a Current Report on Form 8-K,
including the Agreement as exhibit thereto, with the SEC within the time
required by the Exchange Act, and (c) file any other documents and instruments
required by the Exchange Act in connection with the consummation of the
transactions contemplated hereby with the SEC and any state securities
regulatory authorities. From and after the issuance of such press release, the
Company represents to Purchasers that it shall have publicly disclosed all
material, non-public information delivered to Purchasers by the Company in
connection with the transactions contemplated hereby.
 
5.2.  Transfer Restrictions.

(a) The New Shares may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of New Shares other than
pursuant to an effective registration statement under the Securities Act to the
Company or to an Affiliate of either Purchaser (in a “no-sale transaction”), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by such transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this Section.
 
 
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(b) Each Purchaser agrees to the imprinting, so long as is required by this
Section, of a legend on any of the certificates representing the New Shares in
the following form:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE  SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE FORM AND SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.
 
6. Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile or e-mail at the facsimile
number or e-mail address set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile or e-mail at the facsimile number or e-mail address set forth on
the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, or (c) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

7. Fees and Expenses. Each party shall pay the fees and expenses of its own
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of the New Shares to Purchasers.

8. Entire  Agreement;  Amendment.  This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between such
parties. No modification of or amendment to this Agreement, nor any waiver of
any rights under this Agreement, shall be effective unless in writing signed by
all parties to this Agreement.

9. Severability. Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provision of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.

10. Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

11. Language. This Agreement has been written in English, which shall be the
controlling language of this Agreement. Any Chinese translation of this
Agreement shall be for convenience purposes only.  In the event of any
inconsistency between the English version and the Chinese version of this
Agreement, the English version shall control.

12. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns.
 
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
 
 
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14. Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the New Shares.

15. Counterparts;  Facsimile  Signatures. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which shall be one and the same document. This Agreement may be executed by
facsimile signatures.

16. WAIVER  OF  JURY  TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 

 

 

[Signature pages follow.]
 
 

 
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of and on the date first above written.
 

 
COMPANY:
         
CN RESOURCES, INC.
         
By: /s/ Oliver Xing
   
Oliver Xing, President
               
ONTARIO:
         
1547698 ONTARIO LIMITED
               
By: /s/ Oliver Xing
         
Name: Oliver Xing
         
Title: Authorized person
               
YUANKAI:
         
SHANGHAI YUANKAI GROUP CO., LTD.
         
By: /s/ Congkai Li
         
Name: Congkai LI
         
Title: President
 

 
 
 
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