ASSET PURCHASE AND SALE AGREEMENT

ASSET PURCHASE AND SALE AGREEMENT

THIS ASSET PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of October 6, 2007, by and between TRANSNATIONAL FINANCIAL NETWORK, INC.., a California Corporation ("Seller"), and TFN Funding LLC , an Arizona Limited Liability Company ("Buyer").

WITNESSETH:

WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to purchase from Seller substantially all of the assets of Seller's residential mortgage lending division (the "Business") upon the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

I.

PURCHASE AND SALE OF ASSETS.

A.

Sale of Assets .

1.

Assets .  Seller shall cause to be sold, assigned, transferred, conveyed and delivered to Buyer, at the Closing (as defined herein), good and valid title to the Assets (as defined below), free of any encumbrances, on the terms and subject to the conditions set forth in this Agreement.  For purposes of this Agreement, "Assets" shall mean and include all of the properties, rights, interest and other tangible and intangible assets of the Business (wherever located and whether or not required to be reflected on a balance sheet prepared in accordance with generally accepted accounting principles) required to operate the Business in the ordinary course of business.  Without limiting the generality of the foregoing, the Assets specifically shall include those assets of the Business listed on Schedule I(A)(1) attached hereto and made a part hereof but shall not include the Excluded Assets (hereafter defined).

2.

Excluded Assets .  Ownership of the Assets of the Business set forth in Schedule I(A)(2) (the "Excluded Assets") shall not be transferred to Buyer and shall be retained by Seller following the consummation of the transactions contemplated by this Agreement.

3.

Mortgage Loans .  From time to time between the date hereof and the Closing, Seller may sell to Buyer, and Buyer may purchase from Seller, mortgage loans originated by Seller and typically sold by Seller to investors and servicers in the ordinary course of the Business (the "Mortgage Loans").  The terms and conditions of Buyer's purchase of any Mortgage Loans shall be governed by Seller's standard form of note purchase agreement.

B.

Liabilities .  In connection with its purchase of the Assets, Buyer shall assume only those liabilities of Seller which are listed on Schedule I(B)(1) attached hereto and made a part hereof (the "Assumed Liabilities").  Except as specifically set forth in this Section I(B) , Buyer shall not be liable for any debt, obligation, claim or liability of Seller of any kind or description whatsoever, contingent or otherwise, known or unknown, whether incurred prior to, or for claims for events prior to Closing but paid subsequent to or at the Closing, all such un-assumed liabilities being hereinafter collectively referred to as the "Retained Liabilities".  Notwithstanding the foregoing, Buyer shall be liable for any debt, obligation, claim or liability of Seller of any kind or description whatsoever, contingent or otherwise, known or unknown, incurred prior to, or for claims for events prior to Closing.  Seller shall promptly inform Buyer of any any debt, obligation, claim or liability of Seller that is or may be Buyer’s obligation under this Buyer shall have the option to challenge said purported liabilities of Seller in court or in other legal forums at Buyer’s sole cost and expense.  Seller hereby grants Buyer an irrevocable limited power of attorney to deal with said third party claims against Seller that are or may become the responsibility of Buyer at Buyer’s sole discretion.   Buyer shall assume the Assumed Liabilities at or prior to the Closing and, upon the assumption of the Assumed Liabilities, shall pay when due the Assumed Liabilities and shall perform executory obligations arising from the Assumed Liabilities after the assumption thereof pursuant to the express terms of those contracts, leases and agreements, if any, listed on Schedule I(B)(2) attached hereto and made a part hereof (the "Assumed Contracts and Leases").

II.

PURCHASE PRICE .

A.

Subject to the adjustment set forth in Section II(B) hereof, the purchase price (the "Purchase Price") payable by Buyer to Seller for the Assets shall be $10.00 plus assumption of all outstanding liabilities and assumption of all contingent liabilities.

III.

REPRESENTATIONS AND WARRANTIES OF SELLER .

Seller makes the following representations and warranties to Buyer on and as of the date of signing this Agreement, which shall be equally true on the Closing Date as though made on such date, and only through such date.

A.

Organization and Qualification .  Seller is a  corporation organized, validly existing and in good standing under the laws of the State of California, is qualified and in good standing in each state where the nature of its business requires it to be so qualified, and has the requisite power and authority to own, lease and operate its properties including the Assets and to carry on the Business as now being conducted.  Seller has the power and authority to execute and deliver this Agreement and to consummate the transactions and perform its obligations contemplated by this Agreement.

B.

Authority .  The execution and delivery of, and the consummation of the transactions contemplated by, this Agreement (and all other agreements & instruments to be executed by them in connection herewith) have been duly authorized by all necessary corporate action of Seller.  This Agreement constitutes, and all instruments required to be executed and delivered by Seller at the Closing will constitute, the valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms.  All persons who have executed this Agreement on behalf of Seller have been duly authorized to do so by all necessary corporate action of Seller, and all persons who execute instruments required to be executed and delivered by Seller at the Closing shall have been duly authorized to do so by all necessary corporate action of Seller.  Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will (i) violate, conflict with or result in the breach or termination of, or otherwise give any other contracting party the right to terminate, or constitute a default (by way of substitution, novation or otherwise) under the terms of, any agreement or instrument to which Seller is a party or by or to which Seller or any of the Assets may be bound or subject or affected; (ii) result in the creation of any lien, charge or encumbrance upon any of the Assets pursuant to the terms of any agreement or instrument to which Seller is a party or by or to which Seller or any of the Assets may be bound or subject or affected; (iii) violate any judgment, order, injunction, decree or award against, or binding upon, Seller or upon the securities, property or business of Seller; or (iv) to the best knowledge of Seller (and assuming that Seller and Buyer execute and deliver the Put/Call Agreement), constitute a violation by Seller of any law or regulation of any jurisdiction, to an extent that such violation or result will adversely affect the Assets or Buyer's rights thereto or enjoyment thereof after Closing.

C.

Title to and Condition of Assets .  Seller has as of the date of this Agreement, and will have as of the Closing, good and valid title to each of the Assets being sold or transferred by it, and the absolute power and right to sell, assign, transfer and deliver the Assets to Buyer without the requirement of notice to or consent or approval of any third party, free and clear of any lien, security interest, or encumbrance except as described on Schedule III(C)(1), attached hereto and made a part hereof.  Attached hereto as Schedule III(C)(2) is a complete and accurate list of all vehicles, equipment and other properties, if any, including real property, used in the operation of the Business of Seller which are leased from third parties, and Seller has furnished to Buyer true and complete copies of all leases relating to such vehicles, equipment, real property and other properties.

D.

Filing of Tax Returns and Payment of Taxes .  Seller will have duly filed all federal, state and local tax returns required to be filed through the Closing Date with respect to the Business and the Assets and, except as otherwise stated herein, has duly paid all taxes, interest, assessments, penalties or charges which have become due pursuant to such returns.  Seller has also paid all other assessments or taxes of every kind relating to the Business and the Assets to the extent that the same have become due and payable.  All sales or other transfer taxes payable to any jurisdiction by reason of the sale and transfer of the Assets pursuant to this Agreement shall be paid by Seller, except that Buyer will pay any sales taxes assessed or charged incident to the purchase and sale of vehicles sold as a part of this transaction.

E.

Compliance with Laws and Agreements .

1.

Seller operates the Business in the states listed in Schedule III(E) attached hereto and made a part hereof.

2.

The operations of the Business have not violated and are not now in violation of any judgment, order, injunction, award or decree.

3.

Seller has not received any notice that the Business is in violation of any law, ordinance or regulation, which violation could have a material adverse affect on the Business.

4.

Seller has performed all material obligations required to be performed by it under any lease, license, mortgage, note, indenture, loan or other instrument, document, or agreement relating to the Business, to which Seller is a party or by or to which it or any of the Assets is bound or subject or affected.

F.

Contracts .  Except as described in Schedule III(F) or other Schedules to this Agreement, Seller is not a party to (in its own name or as successor in interest to any predecessor) or bound by any of the following, whether written or oral, relating to the Business or properties of Seller used in the Business:

1.

contract not made in the ordinary course of the Business;

2.

employment or advisory contract or consulting contract;

3.

lease with respect to any property (real, personal or mixed), whether as lessor or lessee;

4.

continuing contract for the future purchase of materials, supplies, equipment or services;

5.

single contract for expenditures or commitment for expenditures in excess of $5,000 or in any amount extending beyond one year after the Closing Date;

6.

contract not cancelable without penalty by either party upon thirty (30) or a lesser number of days' notice;

7.

contract containing covenants limiting the freedom of Seller to compete in the Business;

8.

agreement with any officer, director or Shareholder of Seller; or

9.

any written contract or agreement of any other kind relating to the Business or properties of Seller which involves a value of $5,000 or more or a time of performance of more than one year.

True and complete copies of all contracts referenced in the preceding sentence have been furnished to Buyer.  To the best of Seller's knowledge, there does not now exist, nor will there exist at closing, any default or event which, with passage of time or notice or both, would constitute an event of default by Seller under any contract related to the Assets or the Business, which would have a material adverse affect on the Business.

G.

Financial Statements; Absence of Material Adverse Changes .  Seller has delivered to Buyer the following financial statements (collectively, the "Financial Statements"); (a) the audited balance sheets of Seller as of April 30, 2007, the related statements of income and retained earnings and cash flows, the notes thereto and the report of Bedinger & Company with respect thereto; and (b) the balance sheet of Seller as of July 31, 2007 (the "Unaudited Interim Balance Sheet"), and the related statements of income and retained earnings and cash flows for the six months then ended.  The Financial Statements are accurate and complete in all respects, have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered (except that the Unaudited Interim Balance Sheet does not have notes) and present fairly the financial position of Seller as of the respective dates thereof and are the results of operations and cash flows of Seller for the periods covered thereby.  Seller hereby certifies that there are no financial transactions, assets or liabilities, fixed or contingent, which individually or collectively represent a significant claim or liability against the Business or the Assets, which are not disclosed or set forth in the Financial Statements.  Seller further certifies that, since July 31, 2007, Seller has not entered into any transaction with respect to its operation (other than this Agreement) not in the ordinary course of the Business, and there has not been any change in the Assets the effect of which was or will be in any case, or in the aggregate, materially adverse to the Business.

Seller agrees to allow access to all financial and other information necessary for Buyer and its agents to perform a complete audit of the Business, and not Seller as a whole, prior to Closing.  Seller does not hereby make any representations or warranties, nor shall Seller be deemed to make or to have made any representations or warranties, as to the accuracy, completeness or correctness of any pro forma financial statements or financial forecasts with respect to the Business which Buyer and Seller may prepare jointly, or severally, between the date of this Agreement and the Closing.

H.

Legal and Administrative Proceedings .   Schedule III(H) to this Agreement contains a complete and accurate list and description as of the date of Closing  of each of the following: all suits, actions, administrative proceedings, workers compensation claims or proceedings, governmental investigations, arbitrations, mediations or other similar proceedings relating to the Business, to which Seller is a party or against or affecting the Business or the Assets and of which Seller has received notice, and each judgment, order, injunction, decree or award (whether rendered by a court, administrative agency, or by arbitrator) relating to the Business, to which such Seller is a party or against or affecting the Business or the Assets properties (such suits, actions, administrative proceedings, governmental investigations, arbitrations or similar proceedings, and judgments, orders, injunctions, decrees or awards being hereinafter referred to as "Legal Proceedings").

I.

Insurance .   Schedule III(I) to this Agreement contains a complete and accurate list and description of all insurance policies of Seller presently in effect with respect to the Business and the Assets, copies of which shall be delivered to Buyer upon request.

J.

Patents, Trademarks and Trade Names .   Schedule III(J) to this Agreement contains a complete and accurate description of all trademarks (including service marks), trademark registrations, and applications therefore, trade names, copyrights and copyright registrations, and applications therefore, patents, patent applications and patent licenses owned by Seller and used in connection with the Business.  In the operation of the Business, to the best of Seller's knowledge, Seller is not infringing upon, or otherwise violating the rights of any third party with respect to, any trademark, service mark, trade name, copyright or patent.  Seller has not received notice of any proceedings instituted or threatened, or any claim, against Seller alleging any such infringement or violation.

K.

No Labor Activity; Employees .  None of Seller's employees are represented as of the date of this Agreement by any unit or group as his or his representative for collective bargaining or other labor purposes and no such representation will exist as of the Closing.  Seller has not received notice of any (i) charges of unfair labor practices or of employment discrimination against Seller, or (ii) of any union representation questions which involve any of Seller's employees which are pending or threatened before any governmental agency or authority.  Seller is not currently, nor during the past twenty-four (24) months has it been, involved in any labor discussion with any unit or group seeking to become the bargaining unit for any of its employees.

L.

No Change in Conduct of Business .  Since September 1, 2007, there has been no material change in the manner in which Seller conducts the Business.

M.

Customers .  Seller has made available to Buyer information concerning each and every person, company or other entity, including contact address, to whom or which Seller has provided any Business services in the twelve (12) months immediately preceding the date of this Agreement and every person, company or other entity with which Seller has an agreement to provide Business services after the date hereof.

IV.

REPRESENTATIONS AND WARRANTIES OF BUYER .

Buyer makes the following representations and warranties on and as of the date of signing this Agreement, which shall be equally true on the Closing Date as though made on such date, and only through such date:

A.

Corporate Organization and Qualification .  Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Arizona, and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.  Buyer has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions and perform its obligations contemplated by this Agreement.

B.

Authority .  The execution delivery and consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action of Buyer.  This Agreement constitutes, and all instruments required to be exe