Document:

China Security & Surveillance Technology, Inc.: Exhibit 10.2 - Prepared
by TNT Filings Inc.

  

Exhibit 10.2

April 2, 2008

Transferor:

ZHUANG, WEILAN

Transferee:

CHINA SAFETECH HOLDINGS LIMITED

Party C:

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

  
	

Equity
Transfer Agreement 

of 

All Issued Shares 

of 

SINCERE ON LIMITED 

(English Translation) 

  

 

 

 

This Equity Transfer Agreement (the “Agreement”) is entered into by and among the following parties on April 2, 2008:

(1)

ZHUANG, WEILAN whose address is Unit B1, 9/F, Loyong Court Commercial Building, 212-220 Lockhart Road, Wanchai, Hong Kong (the ID Card No. in Hong Kong is G351610(4)) (hereinafter referred to as “Transferor”);

(2)

CHINA SAFETECH HOLDINGS LIMITED, a company incorporated in British Virgin Islands, whose address is F13, Press Plaza, Shennan Avenue Special Zone, Futian District, Shenzhen (hereinafter referred to as  “Transferee”);

(3)

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC., a company incorporated in Delaware, United States, whose address is F13, Press Plaza, Shennan Avenue Special Zone, Futian District, Shenzhen (hereinafter referred to as “Party C”);

The Transferor, the Transferee and Party C above shall be individually referred to as a “Party” and collectively referred to as the “Parties”.

WHEREAS

SINCERE ON LIMITED, a limited liability company legally organized and validly existing under the Company Ordinance of Hong Kong, whose information is listed as Exhibit I (hereinafter referred to as “Sincere On”), and whose all issued shares are beneficially held by the Transferor.

WHEREAS

Sincere On invests and acquires Shenzhen Longhorn Security Technology Co., Ltd., a wholly foreign owned company legally organized and validly existing under the laws of People’s Republic of China, whose information is listed as Exhibit III (hereinafter referred to as “Longhorn”), and whose all shares are beneficially held by Sincere On.

WHEREAS

The Transferee desires to purchase from the Transferor and the Transferor desires to transfer to the Transferee 100% issued shares of Sincere On. Upon completion of the transfer under this Agreement, the Transferee shall indirectly and fully acquire 100% shares and control power of Longhorn.

NOW, THEREFORE, the Parties hereby agree as follows:

Article 1  Definitions

1.1

Unless otherwise defined in this
Agreement, the following terms shall have the meanings indicated as follow:

	
  
  “Company Ordinance”

	
  
  means Chapter 32 Company Ordinance of the laws of Hong Kong;

 

	
  
  “Shares for Transfer”

	
  
  means 10,000 common share of Sincere On owned by the Transferor to be transferred from the Transferor to the Transferee under this Agreement, constituting 100% issued and outstanding stock of Sincere On (for details please refer to Exhibit II - Part A);

	
   
	 
	
  
  “Share Transfer”

	
  
  means 100% issued shares of Sincere On to be transferred from the Transferor to the Transferee under Article 2.1 hereof;

	
   
	 
	
  
  “Total Transfer Price”

	
  
  means total price paid to the Transferor by the Transferee under Article 3.1 hereof;

	
   
	 
	
  
  “Closing Date”

	
  
  April 2, 2008;

	
   
	 
	
  
  “Accounts of Sincere On”

	
  
  means management and financial statements of Sincere On as of February 29, 2008, the copies of which are attached as Exhibit A hereof;

	
   
	
   
	
  
  “Longhorn Accounts”

	
  
  means management and financial statements of Longhorn as of February 29, 2008 verified by PRC auditors, the copies of which are attached as Exhibit B hereof;

	
   
	 
	
  
  “Business Day and Working Hours”

	
  
  means the days when banks in Hong Kong normally provide general bank services (excluding Saturday, Sunday and other Hong Kong public holidays) and general working hours;

	
   
	
   
	
  
  “PRC”

	
  
  means the People’s Republic of China;

	
   
	 
	
  
  “Hong Kong”

	
  
  means the Hong Kong Special Administrative Region of PRC;

	
   
	 
	
  
  “HKD”

	
  
  means the legal currency of Hong Kong;

	
   
	
   
	
  
  “USD”

	
  
  means the legal currency of United States;

	
   
	 
	
  
  “RMB”

	
  
  means the legal currency of PRC.

2

1.2

In this Agreement:

(i)

Any rule or law involved herein shall include any and all amendments, supplements or reenactments thereof from time to time;

(ii)

Words and terms contained in Companies Ordinance shall be interpreted according to definitions stipulated in Companies Ordinance except as otherwise defined or stated in this Agreement, however, any amendment or change to Companies Ordinance shall be excluded which is not enforced before or on the date to execute this Agreement.

(iii)

Single word also includes plural meaning; word referred to any gender also includes the other gender and neuter, word referred to person also includes groups (legal person or non-legal person) and (under every circumstance), vice versa;

(iv)

The parties, descriptions, exhibits, appendices and terms and conditions mentioned herein shall be respectively referred to the parties, descriptions, exhibits, appendices and terms and conditions hereof; and

(v)

The headings and table of contents in this Agreement are provided for reference only and will not affect its construction or interpretation.

Article 2  Share Transfer

2.1

According to the provisions in this Agreement, the Transferor, as the beneficial owner of all issued and outstanding shares of Sincere On (for more details please refer to Part A, Exhibit II), will transfer such Shares for Transfer to the Transferee (for more details please refer to Part B, Exhibit II). After such transfer, the Transferee will own 100% issued and outstanding shares of Sincere On.

2.2

Upon the completion of transaction hereunder, Shares for Transfer shall be free and clear of any mortgage, lien or property encumbrances of any form, and Shares for Transfer shall be transferred with all rights attached or accumulated thereto, including all dividends, profits, the investment in Longhorn by Sincere On and relevant benefits accumulated and distributed from the completion date.
 

Article 3 Transfer Price

3.1

Transfer Price

The Transferor and the Transferee agree, the Transferor shall transfer to the Transferee Shares for Transfer. In return, the Transferee shall pay to the Transferor the Total Transfer Price of RMB120,557,510, consisting of RMB 36,000,000 in cash and shares listed on the New York Stock Exchange of Party C with the value of RMB 84,557,510.

3

3.2

Method of Payment

3.2.1

The Transferee shall pay the Total Transfer Price to the Transferor as follows:

(1)

The Transferee has paid to the Transferor RMB 36,000,000 before the Closing Date.
 

(2)

The Transferee (through its parent company, Party C) shall issue restricted shares equal to RMB84,557,510 to the Transferor or its designees within ninety days after the execution date of this Agreement, and the share value shall be calculated on the average closing price (USD 15.2175/share) of twenty trading days before the Closing Date, amounting to 790,502 shares to the Transferor.  If the shares are issued to Qingfeng Chen, Zhiming Wu or any of the directors or general manager of Longhorn, the restriction period of such shares shall be two years from and after the execution date of this Agreement.  The Transferor shall pledge certain shares to the Transferee as provided under Article 5.2 hereof.

Article 4  Closing

4.1

The Share Transfer shall be completed on the Closing Date at the place stipulated by both parties in accordance with Exhibit V.

4.2

Terms and conditions to be performed hereof shall remain in force after the Closing Date.

4.3

From the Closing Date, debts and credits and all risks of Sincere On and Longhorn shall be promptly borne by the Transferee (except otherwise undertaken by the Transferor in Exhibit IV).

4.4

From the Closing Date, the Transferee shall have the right to consolidate profits of Sincere On and Longhorn with the Transferee group. At the meantime, the Transferee shall have the right to appoint manager or financial person, or authorize to appoint existing personnel of Sincere On and Longhorn to take charge of management and operation of Sincere On and Longhorn as well as all files, materials, financial documents and so on.  The Transferor shall not enjoy any shareholder right and/or interest of Sincere On and Longhorn from the Closing Date because of such Share Transfer, provided that all obligations relevant to the Share Transfer shall be borne by the Transferor under law and this Agreement.

4

Article 5  Warrants, Representations and Covenants of the Transferor

5.1

In addition to the information disclosed in this Agreement, the Transferor shall warrant, represent and covenant to the Transferee under terms and conditions stipulated in Exhibit IV, which also constitute the base for the Transferee to accept the Shares for Transfer.

5.2

The Transferor covenants to the Transferee that the profits after tax in 2007 audited by US Auditors shall reach RMB 7,000,000. If Sincere On and Longhorn reach profits after tax of RMB7,000,000, the Transferee shall release 225,858 shares pledged by the Transferor.  The Transferor further covenants to the Transferee that the profits after tax in 2008 which are audited by US Auditors shall reach RMB18,000,000.  If Sincere On and Longhorn reach profits after tax of RMB18,000,000, the Transferee shall release additional 225,858 shares pledged by the Transferor.

5.3

The Transferor covenants to grant an exclusive right to the Transferee to use pending trademark “Longhorn” (including but not limited to the trademark with the application number 4768252 with the Trademark Office of the State Administration for Industry and Commerce of PRC and the trademark with Madrid International Registration Number of 882263) on Electronic Audio Surveillance Equipment 090151, Camera 090630, Speaker 090575, Photoelectric Switch 090168, Electric Switch 090164, Monitor 090470 under Series 9, No. 20 and 8. The Transferor shall file with the Trademark Office of the State Administration for Industry and Commerce of PRC within 30 days after these applications are approved.
 

Article 6  Warrants, Representations and Covenants of the Transferee and Party C

6.1

The Transferee covenants to keep the organization structure of Sincere On and Longhorn after the Share Transfer, builds up its brand recognition, fully support business development of Sincere On and Longhorn.  The Transferee shall also provide financial support as required by business based on the real situation according to relevant laws and regulations.

6.2

The Transferee undertakes that existing employees of Sincere On and Longhorn shall remain employed given that they are willing to stay and their stay will not impede development of companies after the Share Transfer; arrangement of senior management and technical staff and the operation rights and benefits of such persons shall be governed by separate agreements to be entered after the Share Transfer. In addition, the Transferee covenants that benefits of such persons shall not be lower than their previous benefits.

6.3

The Transferee shall provide appropriate operation funds to Sincere On and Longhorn in order to support the Transferor to realize profits after tax for 2007 and 2008, dates and amounts of providing such funds shall be otherwise stipulated.

6.4

Party C shall file required reports with the U.S. Securities and Exchange Commission (“SEC”) and issue shares to the Transferor under Article 3.2 (2) of this Agreement.

5

Article 7 Governing Law

This Agreement shall be governed and construed by rules and laws of Hong Kong.

Article 8  Settlement of Disputes and Agent of  Receiving Legal Procedure Documents

8.1

Any dispute arising out of or relating to this Agreement, shall be settled by friendly negotiation and consultation. If no agreement is reached through friendly negotiation and consultation, such dispute shall be finally arbitrated by Hong Kong International Arbitration Center (HKIAC) in accordance with HKIAC Arbitration Rules then in effect. Unless otherwise provided in the arbitration rules of HKIAC then in effect, the arbitration shall be the sole and exclusive method and procedure of any dispute arising out of or relating to this Agreement.

8.2

The Parties to this Agreement agree that unless not permitted by the applicable laws and rules, the arbitration terms hereto shall be interpreted as and constitute the currently effective arbitration agreement in writing with legal effect, and shall be granted with such effect.  The Parties to this Agreement hereby expressly waive any right of possibly requested local administrative, judicial or alternative dispute settlement methods, as the conditions of any settlement procedure which arising out of this Agreement.

8.3

The Parties to this Agreement expressly represent that the award made according to Article 8 hereof shall be final award binding upon the Parties.  In addition, the Parties to this Agreement hereby waive the right to appeal the award made according to Article 8 hereof.  The Article 8 shall constitute the most comprehensive exclusive agreement to the extent permitted by the applicable laws.

8.4

(1)

The Transferee irrevocably entrusts BOYU ENTERPRISE CONSULTING CO., LIMITED, whose address is Unit B1, 9/F, Loyong Court Commercial Building, 212-220 Lockhart Road, Wanchai, Hong Kong (“Agent”), to receive legal procedure documents and to be on behalf of the Transferee to receive claims arising out of or relevant to the Agreement or the legal procedures in Hong Kong (including but not limited to, claims for reimbursement, summons, arbitration application and arbitration award) (“Legal Procedure Documents”).

(2)

Transferee undertakes to consecutively entrust the Agent as the agent of receiving Legal Procedure Documents, in order to on behalf of the Transferee receive Legal Procedure Documents in Hong Kong and immediately notify the Transferor in writing if the Agent or its address is modified.

(3)

The Transferee agrees and confirms that Legal Procedure Documents which have been sent to its Agent shall be deemed as having been sent to any Transferee.

6

Article 9  Liabilities for Breach of Contract

9.1

If any statement or warrants made by any Party in this Agreement is untrue or false, it shall be deemed as breach of contract by the Party.

9.2

Any Party to this Agreement changes minds on purpose and causes the failure of the Share Transfer, it shall be deemed as breach of contract by the Party.

9.3

The breaching party shall, in addition to performance of other obligations under this Agreement, compensate the observant party all losses, damages, expenses suffered by the observant party due to breach of contract caused by breaching party.

9.4

If the Transferor changes minds on purpose and cause that the shares can not be transferred to the Transferee or the shares is forfeited after transfer, the Transferee shall have the right to terminate the Agreement, and The Transferor shall return the share transfer price or the shares and assume liabilities under Article 9.3 of this Agreement.

Article 10  Force Majeure and Change of Circumstances

10.1  

If any Party to this Agreement can not perform any part or all of the terms hereto directly or indirectly because of events such as fire, flood, earthquake or other unforeseeable, unavoidable and/or uncontrollable events, the Party shall be exempted from liabilities to the extent as affected by force majeure.

10.2  

If any Party or Parties lose(s) its/their interests under this Agreement because of legislation, or administration order or specific administration act of government, any Party shall have the right to terminate this Agreement and to restore to the conditions before the execution of this Agreement.

10.3  

Any Party affected by force majeure shall deliver the other Party the written notice regarding the occurrence of force majeure within 12 days after the occurrence of the force majeure event.

10.4  

After the occurrence of force majeure event, the Parties to this Agreement shall immediately consultant and decide whether to delay the performance of this Agreement to a day in the future agreed by the Parties or to terminate this Agreement.

10.5  

If any Party delays or is unable to perform all or part of the terms of this Agreement for more than 30 days as a result of force majeure, the other Party shall have the right to rescind this Agreement, and the Parties shall take all necessary actions to restore the rights and obligations of all parties to their respective original positions.

7

Article 11  Miscellaneous

11.1

This Agreement and its involved relevant documents constitute the full understanding of the Parties regarding the Share Transfer, and replace any previous intention, expression and understanding of the Parties.

11.2

If any term of this Agreement is regarded as illegal, invalid or unenforceable at any time, the validity, effectiveness and enforceability of other terms of this Agreement shall not be affected or impaired in any way and shall remain the full validity.

11.3

This Agreement shall bind the Parties and their respective successors and assignees. The interests of this Agreement shall be assigned to the Parties hereto and their respective successors and assignees. Without the permission of the Parties in writing, any Party shall not amend, modify or revise this Agreement.

11.4

This Agreement shall be effective upon signature.

11.5

Without the permission of the Parties in writing (the relevant permission shall not be withheld without reasonable reasons), the Parties hereto shall not transfer any rights or obligations under this Agreement.

11.6

The Parties agree to bear all the cost and expense in respect of the negotiation, preparation, execution and performance of the Agreement and the taxes arising from the transfer of Shares for Transfer. The stamp tax and all other tax and expenses arising out of the transfer of Shares for Transfer (including but not limited to, arising out of in China or in any other areas), shall be borne and paid by the Transferor.

11.7

Unless provided and required by laws, regulations, order or judgments by the competent authorities or courts (including, but not limited to, applicable regulation of security exchanges), without the previous permission of the other Party in writing (the relevant permission shall not be withheld without reasonable reasons), any Party shall not make or distribute any related press statement or announcement.

11.8

Without the prior permission of the other Party in writing, any Party shall not disclose the Agreement or any content or material in connection with any transaction of this Agreement, excluding the following disclosure:

(1)

the disclosure is made according to the provisions of applicable laws, regulations and rules (including, but not limited to,  regulations of security exchanges) or requirements of relevant government authorities or supervision authorities, or court orders;

(2)

the disclosure is made to Sincere On, Longhorn, or its higher competent authorities or approval and examination authorities, or to contacted bank or professional consultant of the disclosing Party;

8

(3)

the disclosure is made by the Transferor to the company of its company group or senior management thereof.

11.9

If any term of this Agreement is or becomes illegal, invalid or unenforceable at any time in any respect, other terms of this Agreement shall not be affected or impaired.

11.10

Any notice required to be sent under this Agreement shall be sent in writing. The notice shall be delivered to the following address or fax number or other address or fax number that the recipient designates according to this Agreement:

(1)

Transferor:

ZHUANG, WEILAN

                
  Address:

Unit B1,9/F.,Loyong Court Commercial Building ,212-220 Lockhart Road,Wanchai,Hong Kong

     
          Telephone:

(852) 21161199

         
                   Fax:

(852) 21161232

(2)

Transferee:

CHINA SAFETECH HOLDINGS LIMITED

    Address:

Floor 13, Press Plaza, Shennan Avenue Special Zone, Futian District, Shenzhen

 Telephone:

(86-755) 83510888

              Fax:

(86-755) 83510815

(3)

      Party C:

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

    Address:

Floor 13, Press Plaza, Shennan Avenue Special Zone, Futian District, Shenzhen

Telephone:

(86-755) 83510888

                             Fax:

(86-755) 83510815

11.11

Any notice can be sent by mail with postage pre-paid, personal delivery, courier with good reputation or by facsimile, and shall be deemed as delivered at the following time:

(1)

two days (seven days if sending by airmail with postage prepaid) after post (the date of postmark is the posting date) for those sent by mail with postage prepaid;

(2)

the next business day for those sent by fax;

(3)

the receiving time for those sent by courier or personal delivery.

Any notice to the Transferee, when properly delivered to any Transferee, shall be regarded as delivered to the other Transferee.

11.12

This Agreement shall be written in Chinese in three copies with each Party holding one copy.

9

IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written and the Parties confirm that the Parties have carefully reviewed and fully understand all the provisions of the Agreement.

	The Transferor
	ZHUANG, WEILAN
	Signature: 
     /s/ ZHUANG, WEILAN                      
    
	Place of Signature: 
    Shenzhen
	 
	 
	Witness:  PENG
    Yaoguang
	 
	The Transferee
	 
	TU Guoshen
    for and on behalf of
	CHINA SAFETECH
    HOLDINGS LIMITED
	Signature:  /s/
    Tu Guoshen                                  
    
	Place of Signature:  
    Shenzhen
	 
	 
	Witness: LUO Ganqi
	 
	 
	Party C
	To execute, chop
    and deliver
	TU Guoshen
    for and on behalf of
	CHINA SECURITY &
    SURVEILLANCE TECHNOLOGY, INC.
	 
	Place of Signature: 
    Shenzhen
	 
	 
	Witness:  LUO
    Ganqi

10f8k032708ex10_maxlife.htm

     

    
      
        
          
            	
                    CAPITAL GROWTH PLANNING,
      INC.

                    
                      
      A Diversified
      Investment & Financial Services Corporation

                  	
                    
                      Est.
      1969

                    

                  	
                    

                  
	 	
                     

                  	 

          

           

        

      

    

     

    Maxlife - CGP Partners ,
LLC

    Joint Venture Agreement
& Terms for Strategy One

     

    Maxlife
Fund, Inc. with the assistance of Capital Growth Planning, Inc. will
primarily be
responsible for locating, introducing, and delivering capital to the Maxlife -
CGP Partners Joint Venture, ("JV"), using its "public company" status and
institutional contacts and clients. CGP will assist in capital raising efforts
by providing its back office support, specialized services, expertise,
settlement strategies and methods to be used by the JV.

     

    Capital
Growth Planning, Inc. ("CGP") and its subsidiaries will be primarily
responsible for locating and sourcing policies for the JV, which will include
identifying, negotiating, and making specific offers to purchase individual
policies that fit the purchase strategy of the JV, as well as negotiating
brokerage fees, when applicable. Once a policy is targeted for purchase at the
appropriate discount to market, a full and complete due diligence review will be
completed (see Due Diligence Check List attached). Once passing the due
diligence review, settlement documents will be drafted to purchase the policy
(see Settlement Process). CGP Settlement documentation has been conformed to
purchase several variations of policy ownership, including Trust Powers and/or
Beneficial Interest (see Settlement Documents list attached). CGP has in house
legal counsel to deal with most documentation issues and to perform final review
of settlement documents. If in certain situations, CGP's Counsel cannot deal
with documentation issues that arise, the JV will consent to either passing on
the policy or locating outside counsel to complete documentation, for an agreed
upon fee. Once clear ownership has been transferred to the JV, CGP will
immediately begin marketing the policy to identify interested buyers for policy
resale. All policies will be put to all our potential market contacts so as to
bring the highest possible price. Once offers are received, CGP will negotiate
an appropriate sales price and third party brokerage fees, if applicable.
Documents will be prepared and sent to escrow for closing.

     

    During
this process certain policy Administrative services will be required to complete
the processing of the policy, premiums, purchase and the sale.

     

    JV agrees
to contract with Capital Administrative Services, Inc. ("CAS"), a subsidiary of
CGP to perform these interim required services. There will be some additional
services that CAS may contract out to third parties. These services may include,
but will not be limited to, updating medical records, ordering life expectancy
reports ("LEs"), and/or life tracking services, when and if
necessary.

     

    Capital
Administrative Services, Inc. specializes in life settlement policy
administration services. CAS will charge the JV a fee of $2,500 per policy to
service all policies from purchase to sale, which will include, but is not
limited to the following, in no specific order:

     

     

    HOME
OFFICE

     

    405 E.
Lexington Avenue, Suite 201  u  El Cajon, California
92020

    (800)
440-1023  u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

    
      
        

      

    

    BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    
      
        
          
            
              	
                      CAPITAL GROWTH PLANNING,
      INC.

                      
                        
      A Diversified
      Investment & Financial Services Corporation

                    	
                      
                        Est.
      1969

                      

                    	
                      

                    
	 	
                       

                    	 

            

             

          

        
 

    

    Perform
it portion of the Due Diligence required to purchase and process all
Policies

     

    Review
policy(s), trust documents and/or beneficial interests accompanying all required
transfer settlement documents

     

    Work with
a third party escrow to verify funds for sale and purchase

     

    Package
portfolios of policies per the direction of the JV

     

    Make
timely payment of required premiums due for the life insurance policies owned by
the JV as provided by JV / Beneficiary

     

    Order and
review in-force illustrations from the carriers

     

    Order and
review updated medical information

     

    Order and
authenticate Life Expectancy reports, for updating valuation or preparing policy
for sale 

     

    Order
Tracking of lives, if needed

     

    Organize
and prepare individual and packaged policies for bidding

     

    Prepare
transfer documents for the sale of policies

     

    Prepare
quarterly statements on the portfolio's activities and performance

     

    Prepare
and provide quarterly statements for JV regarding deposits, payments, and
expenses, and account for all of CAS services and activities for each policy
transacted on behalf of the JV Receive and distribute trust funds, under the
direction of the JV

     

    Receive
any collections of death benefits on maturing policies.

     

    Make the
determination when working with all parties how the Trust's fund accounts will
be organized. CAS administers will maintained separate bank account for all
Trusts, so that no funds are commingled, except for funds of various combined
trusts for whom CAS provides trust administrative services; and, as long as CAS
maintains a separate accounting of each Trust's funds held in such
account.

     

    
      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        
           

          
            
              	
                      CAPITAL GROWTH PLANNING,
      INC.

                      
                        
      A Diversified
      Investment & Financial Services Corporation

                    	
                      
                        Est.
      1969

                      

                    	
                      

                    
	 	
                       

                    	 

            

             

          

        

      

    

    Joint
Venture Distributions:

     

    To build
JV value and provide for possible interest payments if funds raised are borrowed
25% of all net JV earnings per completed policy transaction will be retained in
the JV's cash account, and the balance of net earnings (75%) will be distributed
equally to the JV members.

     

    Joint
Venture Stock Participation and Performance Milestones:

     

    To
further strengthen its corporate relationships in the underlying Companies
backing the JV, Capital Growth Planning, Inc. and Maxlife have agreed to issue
one another under the follow Warrant and Milestone marks:

     

    Maxlife has agreed to issue
CGP the following Warrants at the Milestones listed below:

     

    
      	
              1)

            	
              $1,000,000
      of net profit earned in the JV

            	
              100,000
      warrants @

            	
              $15

            
	
              2)

            	
              $5,000,000
      of net profit earned in the JV

            	
              150,000
      warrants @

            	
              $20

            
	
              3)

            	
              $10,000,000
      of net profit earned in the JV

            	
              200,000
      warrants @

            	
              $25

            
	
              4)

            	
              $15,000,000
      of net profit earned in the JV

            	
              250,000
      warrants @

            	
              $30

            
	
              5)

            	
              $20,000,000
      of net profit earned in the JV

            	
              300,000
      warrants @

            	
              $35

            
	
              6)

            	
              $25,000,000
      of net profit earned in the JV

            	
              350,000
      warrants @

            	
              $40

            

    

     

    Maxlife
Warrants (in the publicly traded company) will vest one (1) year from date the
Warrant is issued, and will expire 2 years thereafter.

     

    
      CGP
has agreed
to issue
Maxlife the following Warrants at the Milestones
listed
below:

       

    

    
      	1)	
              $1,000,000
      of net profit earned in the J/V 

            	100,000
      warrants @	$1.00
	
              2) 

            	
              $5,000,000 of net profit earned
      in the J/V

            	
              150,000
      warrants @

            	
              $2.00

            
	
              3) 

            	
              $10,000,000 of net profit earned
      in the J/V

            	
              200,000
      warrants @

            	
              $3.00

            
	
              4) 

            	
              $15,000,000 of net profit earned
      in the J/V

            	
              250,000
      warrants @

            	
              $4.00

            
	
              5) 

            	
              $20,000,000 of net profit earned
      in the J/V

            	
              300,000
      warrants @

            	
              $5.00

            
	
              6) 

            	
              $25,000,000 of net profit earned
      in the J/V

            	
              350,000
      warrants @

            	
              $6.00

            

    

    

     

    CGP
Warrants will be issued with a three year term to purchase CGP's Series B Non-voting Common
Stock at the price per share listed above.

     

     

      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
       

      
        
           

          
            
              	
                      CAPITAL GROWTH PLANNING,
      INC.

                      
                        
      A Diversified
      Investment & Financial Services Corporation

                    	
                      
                        Est.
      1969

                      

                    	
                      

                    
	 	
                       

                    	 

            

             

          

        

      

    

    Dissolution
of Joint Venture:

     

    Dissolution
of the JV will be caused by one of three events: 1) both parties agree to
dissolve the JV, in this situation the partnership will sell all its policy
assets, distribute all proceeds to members and the JV will end; 2) Maxlife and
CGP come to terms for a merger, acquisition, or purchase that would render the
JV moot, such that the JV would be owned by the surviving entity, with the
proceeds going to the surviving company; and/or, 3) one party agrees to buyout
the other party's interest in the JV on terms acceptable to both
parties.

     

    Items
Exclusive to Joint Venture partners:

     

    All
information, proforma' s, computer modeling, programs, strategies, structures,
products, and/or marketing ("intellectual property") that was created, developed
and/or produced by Capital Growth Planning and/or Maxlife is property of the
respective parties and can be used by JV for the JV in all efforts that directly
or indirectly benefits JV, for as long as JV is in place. All personal and
professional relationships, and/or contacts ("relationships") brought by Capital
Growth Planning and/or Maxlife is available for the JV in all efforts that
directly or indirectly benefits JV, for as long as JV is in place. None of the
intellectual property and/or relationships shall be circumvented by either
party, without prior written approval, in any venture other than the
JV.

     

    Settlement
Process:

     

    Prior to presenting an
offer, CGP will review an in-force illustration, review one or two current LE
reports, perform price modeling for both a bid price and targeted sale price to
establish anticipated margins, and make an offer.

     

    After negotiating a
purchase price, (which may or may not include a brokerage fee), CGP will send a
due diligence checklist to insured/settler along with a letter of intent ("LOI")
to purchase.

     

    Upon the receipt of the
offer acceptance CAS and CGP will complete their due diligence and if acceptable
will prepare and send the purchase settlement documents to the
insured/settler.

     

    Upon the receipt of the
completed settlement documents, a review of all executed documents and final
processing will be performed, first by "CAS" and then secondly by
"CGP".

     

    "See attached
list of settlement documents and required addendums."

     

    After the review is
completed, the JV will deposit funds into an escrow account sufficient to cover
the purchase and any prepaid premium reimbursements or premium payments due or
pending.

     

     

    
      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          
             

            
              
                	
                        CAPITAL GROWTH PLANNING,
      INC.

                        
                          
      A Diversified
      Investment & Financial Services Corporation

                      	
                        
                          Est.
      1969

                        

                      	
                        

                      
	 	
                         

                      	 

              

               

            

          

        

         

      

    

    Upon the
acceptance of all required documents and sign off by CGP the JV will instruct
escrow to release the funds for the transfer.

     

    Immediately
thereafter, CGP will begin to market the policy to any and all potential,
acceptable buyers. A complete set of new documents will be prepared for the sale
transaction once a buyer has been identified and the price negotiations
completed. Again, through the use of an escrow company, the transaction will be
completed once all the required documentation is received and approved, and
money is deposited the for sale transaction to be closed.

     

    CAS will
perform and supply to both MaxLife Fund and CGP, an accounting of each case.
Upon receipt of the accounting, and on a schedule, to be determined, the JV will
pay out distributions to its members based on the JV Operating
Agreement.

     

    Due
Diligence Checklist

     

    "CGP"
will complete the following due diligence on all cases. 

     

    Preliminary
Due diligence:

     

    Review a
current "in-force" illustration from the carrier. 

     

    Review
one or two current LE reports

     

    Perform
price modeling for both a bid price and targeted sale price to establish
anticipated margins, and make an offer.

     

    After
negotiating a purchase price, (which may or may not include a brokerage fee),
"CGP" will prepare and send a due diligence checklist to insured/settler along
with a letter of intent ("LOI") to purchase.

     

    Subsequent Due
Diligence:

     

    Review a
Verification of Coverage, ("VOC")

     

    Review a
copy of the original insurance application and policy for any
inconsistencies.

     

    Review
additional required documentation such as driver's license, recorded state of
residence, etc. for inconsistencies.

     

     

    
      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      
        
          
             

            
              
                	
                        CAPITAL GROWTH PLANNING,
      INC.

                        
                          
      A Diversified
      Investment & Financial Services Corporation

                      	
                        
                          Est.
      1969

                        

                      	
                        

                      
	 	
                         

                      	 

              

               

            

          

        

      

    

    Review
the paper trail of ownership, if the policy has changed hands from original
insured and confirm the policy is free of any liens

     

    Review
all executed settlement documents and additional required
documentation.

     

    Settlement
Documents Check List

     

    -  Life Settlement
Agreement

     

    -  Life Insurance Policy,
including Policy Application 

     

    -  Life Settlement Proceeds
Disbursement Instructions 

     

    -  Consent of Insured's
Spouse (Signature must be Notarized) 

     

    -  Confirmation of no
spouse

     

    -  Designation of
Contacts

     

    -  Notification to
Contact

     

    -  Authorization for
Disclosure of Protected Health Information 

     

    -  Authorization for
Disclosure of Life Insurance Policy Information

     

    -  Authorization for
Disclosure of Personal Information 

     

    -  Acknowledgment of Life
Settlement Transaction 

     

    -  Life Insurance Policy
Owner's Disclosure of Liens 

     

    -  Disclosure
Form

     

    -  Release of Lien on
Policy

     

    -  Trust
Agreement

     

    -  Amendment to
Trust

     

    -  Second Amendment to Trust
(if Applicable)

     

    -  Copy of Valid Drivers
License or Valid Picture ID 

     

    -  Insurer's Statement of
Policy Status

     

    
      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
       

      
        
           

          
            
              	
                      CAPITAL GROWTH PLANNING,
      INC.

                      
                        
      A Diversified
      Investment & Financial Services Corporation

                    	
                      
                        Est.
      1969

                      

                    	
                      

                    
	 	
                       

                    	 

            

             

          

        

      

    

     

     

     

    Approved
as to content on this 25th day of February,
2008:

     

     

    
    

     

    
      	 Capital
      Growth Planning, Inc.	Max
      Life Fund Corp.,
Inc.

    

     

     

                                                

    
      
      

       

      
        	 	 	 	 
	Douglas Miller
      CEO	 	Bennet Kurtz,
      CEO	 

      

       

       

       

       

       

    

     

                                                                

     

     

     

     

     

     

     

     

     

     

     

    
      HOME
OFFICE

       

      405
E. Lexington Avenue, Suite 201  u 
El Cajon, California 92020

      (800) 440-1023 
u 
(619) 440-7023  u
 FAX (619)
579-6378  u
 www.cgpfinancial.com

      
        
          

        

      

      BROKER/DEALER:
CAPITAL GROWTH RESOURCES  u  MEMBER NASD/SIPC

    

     

     

    7

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