Stock Acquisition Agreement

(a)  

“Agreement” shall mean this Agreement, and all the exhibits, schedules and other documents attached or referred hereto, and all amendments and supplements, if any, hereto;

(b)  

“Closing” shall mean the completion of the Transaction, in accordance with Section 7 hereof, at which the Closing Documents shall be exchanged by the parties, except for those documents or other items specifically required to be exchanged at a later time;

(c)  

“Closing Date” shall mean a date mutually agreed upon by the parties hereto in writing and in accordance with Section 7 hereof following the satisfaction or waiver by Buyer and Seller of the conditions precedent set out in Section 5 hereof, respectively, provided that such date shall be no later than April 26, 2013 unless mutually agreed to in writing by the Parties;

(d)  

“Closing Documents” shall mean the papers, instruments and documents required to be executed and delivered at the Closing pursuant to this Agreement;

(e)  

 “GAAP” shall mean United States generally accepted accounting principles applied in a manner consistent with prior periods;

(f)  

“Liabilities” shall include any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or unliquidated, secured or unsecured;

(g)  

 “SEC” shall mean the United States Securities and Exchange Commission;

(h)  

 “Taxes” shall mean all international, federal, state, provincial and local income taxes, capital gains taxes, value-added taxes, franchise, personal property and real property taxes, levies, assessments, tariffs, duties (including any customs duties), business license or other fees, sales, use and any other taxes relating to the assets of the designated party or the business of the designated party for all periods up to and including the Closing Date, together with any related charge or amount, including interest, fines, penalties and additions to tax, if any, arising out of tax assessments; and

(i)  

“Transaction” shall mean the purchase of all of the issued and outstanding shares of BSI by Buyer from the Seller in consideration for cash.

(a)  

Parties agree that the aggregate value of all of the issued and outstanding shares of BSI is US$6,500,000, and is based upon the year end of December 31, 2012 financial report of BSI and a valuation report by American Appraisal China Limited on March 5 , 2013;

(b)  

As consideration for the sale of all of the issued and outstanding shares of BSI by the Seller to Buyer, Buyer shall pay US$6,500,000 in cash to the Seller before April 26, 2013; and Buyer has previously paid US$3,000,000 to the Seller as deposit for this acquisition which will be a part of the payment of consideration.

BSI and its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation and each has the requisite corporate power and authority to own, lease and carry on its business as now being conducted. BSI and its subsidiaries are duly qualified to do business and are in good standing as foreign corporations in each of the jurisdictions in which they own property, lease property, do business, or are otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the business of BSI and its subsidiaries taken as a whole.

All of the issued and outstanding shares of BSI common stock have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to preemptive rights and were issued in full compliance with the laws of the BVI. There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating BSI to issue any additional shares of BSI Common Stock, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from BSI any shares of BSI Common Stock. There are no agreements purporting to restrict the transfer of the BSI Common Stock, no voting agreements, shareholders’ agreements, voting trusts, or other arrangements restricting or affecting the voting of the BSI Common Stock.

The issued and outstanding shares of each of BSI’s subsidiaries have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to preemptive rights and were issued in full compliance with all applicable laws. There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating BSI or any of its subsidiaries to issue any additional common stock of any of BSI’s subsidiaries, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any shares of the common stock of any of BSI’s subsidiaries. There are no agreements purporting to restrict the transfer of the common stock of any of BSI’s subsidiaries, no voting agreements, shareholders’ agreements, voting trusts, or other arrangements restricting or affecting the voting of the common stock of any of BSI’s subsidiaries.

(a)  

conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of BSI and its subsidiaries under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to BSI or any of its subsidiaries, or any of their respective material property or assets;

(b)  

violate any provision of the Articles of Incorporation, Bylaws or any other documents of BSI or any of its subsidiaries or any applicable laws; or

(c)  

violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory authority applicable to BSI or its subsidiaries or any of their respective material property or assets.

(a)  

Each of BSI and its subsidiaries is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other applicable regulation to its business or operations;

(b)  

None of BSI and its subsidiaries is subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a Material Adverse Effect;

(c)  

BSI and its subsidiaries have duly filed all reports and returns required to be filed with governmental authorities and have obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement. All such permits and consents are in full force and effect, and no proceeding for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or threatened, and none of them will be adversely affected by the consummation of the Transaction; and

(d)  

Each of BSI and its subsidiaries has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business.  None of BSI or its subsidiaries has received any notice of any violation thereof, nor is aware of a valid basis therefore.

(a)  

are in accordance with the books and records of their respective entity; and

(b)  

present fairly the financial condition of their respective entity as of the respective dates indicated and the results of operations for such periods.

(a)  

are not set forth in the BSI Financial Statements, respectively, and have not heretofore been paid or discharged;

(b)  

did not arise in the regular and ordinary course of business under any agreement, contract, commitment, lease or plan specifically disclosed in writing to Buyer; or

(c)  

have not been incurred in amounts and pursuant to practices consistent with past business practice, in or as a result of the regular and ordinary course of its business since the Accounting Date.

(a)  

None of BSI and its subsidiaries are presently under (nor have any of them received notice of any contemplated) investigation or audit by any regulatory or governmental agency or body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof;

(b)  

All taxes required to be withheld by BSI and its subsidiaries on or prior to the date hereof from employees for income taxes, social security taxes, unemployment taxes and other similar withholding taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate governmental agency; and

(c)  

BSI Financial Statements contain full provision for all taxes including any deferred taxes that may be assessed to BSI (as the case may be) for the accounting period ended on the Accounting Date or for any prior period in respect of any transaction, event or omission occurring, or any profit earned, on or prior to the Accounting Date or for any profit earned by BSI (as the case may be) on or prior to the Accounting Date or for which BSI is accountable up to such date and all contingent liabilities for taxes have been provided for or disclosed in the BSI Financial Statements.

(a)  

incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or to any of its assets or properties;

(b)  

sold, encumbered, assigned or transferred any material fixed assets or properties except for ordinary course business transactions consistent with past practice;

(c)  

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of  BSI or any of BSI’s other subsidiaries to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever;

(d)  

made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

(e)  

declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares or equity securities;

(f)  

suffered any damage, destruction or loss, whether or not covered by insurance, that materially and adversely effects its business, operations, assets, properties or prospects;

(g)  

suffered any material adverse change in its business, operations, assets, properties, prospects or condition (financial or otherwise);

(h)  

received notice or had knowledge of any actual or threatened labor trouble, termination, resignation, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations, assets, properties or prospects;

(i)  

made commitments or agreements for capital expenditures or capital additions or betterments exceeding in the aggregate $5,000;

(j)  

other than in the ordinary course of business, increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its employees or directors or made any increase in, or any addition to, other benefits to which any of its employees or directors may be entitled;

(k)  

entered into any transaction other than in the ordinary course of business consistent with past practice; or

(l)  

agreed, whether in writing or orally, to do any of the foregoing.

(a)  

a Material Adverse Effect; or

(b)  

any material change by BSI in its accounting methods, principles or practices.

(a)  

Intellectual Property Assets.  BSI and its subsidiaries own or hold an interest in all intellectual property assets necessary for the operation of the business of BSI and its subsidiaries as they are currently conducted (collectively, the “Intellectual Property Assets”), including:

(i)  

all functional business names, trading names, registered and unregistered trademarks, service marks and applications (collectively, the “Marks”);

(ii)  

all patents, patent applications, and inventions, methods, processes and discoveries that may be patentable (collectively, the “Patents”);

(iii)  

all copyrights in both published works and unpublished works (collectively, the “Copyrights”); and

(iv)  

all know-how, trade secrets, confidential information, customer lists, technical information, data, process technology, plans, drawings, and blue prints owned, used, or licensed by BSI and its subsidiaries as licensees or licensors (collectively, the “Trade Secrets”).

(b)  

Agreements. To the best knowledge of the Seller, there are no outstanding or threatened disputes or disagreements with respect to any agreements to which BSI or any its subsidiaries is a party.

(c)  

Intellectual Property and Know-How Necessary for the Business. BSI and its subsidiaries are the owners of all rights, titles and interests in and to each of the Intellectual Property Assets, free and clear of all liens, security interests, charges, encumbrances and other adverse claims, and has the right to use without payment to a third party of all the Intellectual Property Assets. Each of BSI and is subsidiaries and all former and current employees and contractors of BSI and its subsidiaries have executed written contracts, agreements or other undertakings with BSI and its subsidiaries that assign all rights to any Intellectual Property Assets or other inventions, improvements, discoveries, or information relating to the business of BSI to BSI. No employee, director, officer or shareholder of BSI or any of its subsidiaries owns directly or indirectly in whole or in part, any Intellectual Property Asset which BSI is presently using or which is necessary for the conduct of its business. No employee or contractor of BSI and its subsidiaries has entered into any contract or agreement that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work to anyone other than BSI.

(d)  

Trade Secrets. BSI and its subsidiaries have taken all reasonable precautions to protect the secrecy, confidentiality and value of its Trade Secrets. BSI and its subsidiaries have good title and an absolute right to use the Trade Secrets. The Trade Secrets are not part of the public knowledge or literature. BSI and its subsidiaries have not been used, divulged, or appropriated either for the benefit of any person or entity or to the detriment of BSI and its subsidiaries. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any way.

(a)  

Representations and Warranties. The representations and warranties of BSI and the Seller set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and Seller will have delivered to Buyer a certificate dated as of the Closing Date, to the effect that the representations and warranties made by BSI and the Seller in this Agreement are true and correct.

(b)  

Performance. All of the covenants and obligations that BSI and the Seller are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.

(c)  

Transaction Documents. This Agreement, the BSI Financial Statements and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance reasonably satisfactory to Buyer, will have been executed and delivered to Buyer.

(d)  

Third Party Consents. Buyer will have received duly executed copies of all third party consents and approvals contemplated by this Agreement, in form and substance reasonably satisfactory to Buyer.

(e)  

No Material Adverse Change. No Material Adverse Effect will have occurred since the date of this Agreement.

(f)  

No Action. No suit, action, or proceeding will be pending or threatened against Seller or BSI and its subsidiaries before any governmental or regulatory authority wherein an unfavorable judgment, order, decree, stipulation, injunction or charge would:

(i)  

prevent the consummation of any of the transactions contemplated by this Agreement; or

(ii)  

cause the Transaction to be rescinded following consummation.

(g)  

Delivery of Financial Statements. BSI will have delivered to Buyer the BSI Financial Statements, which financial statements will include audited financial statements for BSI’s two most recent fiscal years, prepared in accordance with GAAP.

(h)  

Due Diligence Review of Financial Statements. Buyer will be reasonably satisfied with its due diligence investigation and review of the BSI Financial Statements.

(i)  

Due Diligence Generally. Buyer will be reasonably satisfied with its due diligence investigation of BSI and its subsidiaries that is reasonable and customary in a transaction of a similar nature to that contemplated by the Transaction, including:

(i)  

materials, documents and information in the possession and control of BSI or its subsidiaries which are reasonably germane to the Transaction;

(ii)  

a physical inspection of the assets of BSI by Buyer or its representatives;

(iii)  

a review by Buyer of all Material Agreements entered into by BSI or its subsidiaries; and

(iv)  

title to the material assets of BSI.

(j)  

Surrender of Shares.  Seller shall surrender all of the issued and outstanding shares of BSI to Buyer endorsed in blank for transfer from Seller to Buyer.

(a)  

Representations and Warranties. The representations and warranties of Buyer set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and Buyer will have delivered to Seller a certificate dated the Closing Date, to the effect that the representations and warranties made by Buyer in this Agreement are true and correct.

(a)  

amend its Articles of Incorporation, Bylaws or other documents;

(b)  

incur any liability or obligation other than in the ordinary course of business or encumber or permit the encumbrance of any of its properties or assets except in the ordinary course of business;

(c)  

dispose of or contract to dispose of any of its property or assets, including the Intellectual Property Assets, except in the ordinary course of business consistent with past practice;

(d)  

issue, deliver, sell, pledge or otherwise encumber or subject to any lien any shares of BSI Common Stock, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities;

(i)  

declare, set aside or pay any dividends on, or make any other distributions in respect of the BSI Common Stock, or

(ii)  

split, combine or reclassify any BSI Common Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of BSI Common Stock; or

(e)  

not materially increase the benefits or compensation expenses of BSI and its subsidiaries, other than as contemplated by the terms of any employment agreement in existence on the date of this Agreement, increase the cash compensation of any director, executive officer or other key employee or pay any benefit or amount not required by a plan or arrangement as in effect on the date of this Agreement to any such person.

(a)  

afford Buyer and its representatives full and free access to its personnel, properties, assets, contracts, books and records, and other documents and data;

(b)  

furnish Buyer and its representatives with copies of all such contracts, books and records, and other existing documents and data as required by this Agreement and as Buyer may otherwise reasonably request; and

(c)  

furnish Buyer and its representatives with such additional financial, operating, and other data and information as Buyer may reasonably request.

(a)  

a fully executed and completed copy of this Agreement;

(b)  

share certificates representing the BSI Shares as required by Section 2.3 of this Agreement;

(c)  

all certificates and other documents required by Section 2.3 of this Agreement; and

(d)  

the BSI Financial Statements and any other necessary documents, each duly executed by Seller, as required to give effect to the Transaction.

(a)  

copies of the resolutions or consent action adopted by or on behalf of the Board of Directors of Buyer evidencing approval of this Agreement and the Transaction;

(b)  

any other necessary documents, each duly executed by Buyer, as required to give effect to the Transaction; and

(a)  

the breach by the Seller or BSI of any representation or warranty of the Seller or BSI contained in or made pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement;

(b)  

the breach or partial breach by the Seller or BSI of any covenant or agreement of the Seller or BSI made in or pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement;

(a)  

the breach by Buyer of any representation or warranty of Buyer contained in or made pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement; or

(b)  

the breach or partial breach by Buyer of any covenant or agreement of Buyer made in or pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement.

(a)  

mutual agreement of Buyer, BSI and Seller;

(b)  

Buyer, if (i) there has been a material breach by BSI or the Seller of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of BSI or the Seller that is not cured, to the reasonable satisfaction of Buyer, within ten business days after notice of such breach is given by Buyer (except that no cure period will be provided for a breach by BSI or the Seller that by its nature cannot be cured); or (ii) the due diligence inquiry into the BSI Financial Statements reveals material discrepancies from what has previously been represented to Buyer;

(c)  

BSI, if there has been a material breach by Buyer of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of Buyer that is not cured by the breaching party, to the reasonable satisfaction of BSI, within ten business days after notice of such breach is given by Buyer (except that no cure period will be provided for a breach by Buyer that by its nature cannot be cured);

(d)  

BSI or Buyer if any permanent injunction or other order of a governmental entity of competent authority preventing the consummation of the Transaction contemplated by this Agreement has become final and non-appealable.

(a)  

In the case of email, on the day after the email has been sent;

(b)  

in the case of personal delivery, on the date of such delivery;

(c)  

in the case of a fax, when the party sending such fax has received electronic confirmation of its delivery;

(d)  

in the case of delivery by internationally-recognized express courier, on the third business day following dispatch; and

(e)  

in the case of mailing, on the seventh business day following mailing.

Per:

_________________________________

 

Name:  Wong Ya Ming

 

Title:  Chief Executive Officer

Per:

_________________________________

 

Name:  Zhu Wei

 

Title:  Sole Director and Shareholder