MEMORANDUM OF UNDERSTANDING Between MR. NG TUNG WO PAUL/TUNG SHING (USA-CAN) LTD And TAGALDER (2000) INCORPORATED This is to confirm that Mr. Ng Tung Wo Paul/Tung Shing (USA-CAN) Ltd ("Ng") agrees to sell and Tagalder (2000) Incorporated ("Tagalder") agrees to purchase additional ownership of Tung Shing Development Ltd ("TSD") up to 40% of the holding under the following terms and conditions: 1. "TSD" is a Hong Kong registered company: Certificate no: 07178935-000-04-007 Flat/RM 1706, Bonham Trade CTR, 50 Bonham Strand, Hong Kong 2. "TSD" is owned by "Ng". 3. "TSD" is in the business of investment, import/export, and general trading in the plywood business. "TSD" confirmed that "TSD" has 51% ownership in Jiangxi Tung Shing Plywood Factory Co., Ltd ("TSPF"). 4. "TSD" has acquired 75% of Shenzhen Punluen Industrial Co., Ltd at the purchase price of C$2,399,627.00. 5. "Tagalder" already acquired 20% of TSD without the Shenzhen Punluen Insdutrial Co., Ltd. 6. The Price: As agreed by both parties, the purchase price of 40% of the ownership with the holding in Shenzhen Punluen Insdutrial Co., Ltd is fixed at C$3,246,672.00. Tagalder already paid C$1,113,208.00. The remaining balance of C$2,133,464,00 will be paid at closing. 7. The Management Both parties agree that Tagalder will elect one director to the board and retain the current management of "TSD" until further notice. 8. The Business Both parties agree to further develop and expand the current core business through corporate restructure and acquisition. 9. Payment Both parties agree that Tagalder will issue common shares to pay for the purchase:. The price: C$0.17 Total quantity of shares: 12,549,788 shares 10. Official Approval This agreement is conditional upon the following official approval: - - Tagalder's Board - - Regulatory Approval - - Tagalder shareholders 11. This Memorandum of understanding is signed on June 18, 2001 by: "Mr. Ng Tung Wo Paul" "Mr.Peter Chun" - ------------------------ --------------- Tung Shing Development Limited Tagalder (2000) Incorporated Date: June 18,2001 Date: June 18,2001