Document:

Unassociated Document

     

    
      

      

    

     

    

    SUBSCRIPTION
      AGREEMENT

     

    BY
      AND
      AMONG

     

    HOME
      SYSTEM GROUP

     

    AND

     

    THE
      INVESTORS LISTED ON SCHEDULE 1

     

    

     

    Dated
      as
      of May 23, 2007

     

    

    

    
      

      

    

    

    THE
      SECURITIES OFFERED BY THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED
      WITH
      OR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
      COMMISSION, NOR HAS SUCH COMMISSION OR ANY STATE SECURITIES BUREAU, COMMISSION
      OR OTHER REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS
      OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT.
      ACCORDINGLY, YOU MAY NOT OFFER OR SELL THE OFFERED SECURITIES IN THE UNITED
      STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN RULE 902(K) PROMULGATED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) IN THE
      ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
      EVIDENCE ACCEPTABLE TO US AND OUR COUNSEL, WHICH MAY INCLUDE AN OPINION OF
      COUNSEL, THAT REGISTRATION IS NOT REQUIRED. HEDGING TRANSACTIONS INVOLVING
      THE
      OFFERED SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
      ACT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

    

    

    THIS
      SUBSCRIPTION AGREEMENT MAY NOT BE SHOWN OR GIVEN TO ANY PERSON OTHER THAN THE
      PERSON WHOSE NAME APPEARS ON SCHEDULE 1 AND MAY NOT BE PRINTED OR REPRODUCED
      IN
      ANY MANNER WHATSOEVER. FAILURE TO COMPLY WITH THIS DIRECTIVE CAN RESULT IN
      A
      VIOLATION OF THE SECURITIES ACT. ANY FURTHER DISTRIBUTION OR REPRODUCTION OF
      THIS SUBSCRIPTION AGREEMENT IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF
      ITS
      CONTENTS BY AN OFFEREE, IS UNAUTHORIZED. BY ACCEPTING THIS SUBSCRIPTION
      AGREEMENT, YOU EXPRESSLY AGREE TO COMPLY WITH THESE AND THE OTHER RESTRICTIONS
      CONTAINED HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    LIST
      OF EXHIBITS

     

    

    
      	 	
              EXHIBIT
                A

            	
              Accredited
                Investor Questionnaire

            

    

    

    
      	 	
              EXHIBIT
                B 

            	
              Promissory
                Note

            

    

    

    
      	 	
              EXHIBIT
                C 

            	
              Stock
                Power

            

    

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    

      SUBSCRIPTION
        AGREEMENT

       

      THIS
        SUBSCRIPTION AGREEMENT
        (this
“Agreement”) is made and entered into as of May 23, 2007 by and among Home
        System Group, a Nevada corporation (the “Company”),
        and
        the investors named on Schedule
        1
        attached
        hereto (each such investor is referred to herein as an “Investor” and
        collectively as the “Investors”).
        Certain terms used and not otherwise defined in the text of this Agreement
        are
        defined in Article 7 of this Agreement. 

       

      W
        I T N E S S E T H

       

      WHEREAS,
        the
        Company desires to issue and to sell to the Investors,
        and the
        Investors desire to purchase from the Company, an aggregate of ten million
        (10,000,000) shares of Common Stock at an average per share purchase price
        of
        $4.00, for an aggregate purchase price of Forty Million Dollars ($40,000,000),
        all in accordance with the terms and provisions of this Agreement.

       

      NOW,
        THEREFORE,
        in
        consideration of the foregoing and the mutual representations, warranties
        and
        covenants herein contained, the parties hereto hereby agree as
        follows:

      

      ARTICLE
        I

      AUTHORIZATION
        OF SECURITIES

       

      1.1 Authorization
        of Securities.
        Prior to the Closing Date, the Company’s Board of Directors shall have taken all
        action necessary to authorize the issuance and sale of 10,000,000 shares
        of its
        Common Stock (the “Securities”)
        to the Investors pursuant to the terms set forth herein. The purchase price
        for
        the Securities shall be paid as per the terms set forth under Section 3.3(b)
        hereunder, with each Investor issuing the Company a promissory note (the
        “Promissory Note”) as payment for a portion of the Purchase Price (as defined
        below). 

       

      ARTICLE
        II

      SALE
        AND
        PURCHASE OF THE SECURITIES 

       

      2.1 Subject
        to the terms and conditions set forth in this Agreement, each Investor hereby
        subscribes for and agrees to acquire from the Company at the Closing, and
        the
        Company hereby agrees that it shall issue to each Investor at the Closing,
        free
        and clear of any Encumbrances, the number of shares of Common Stock set forth
        opposite such Investor's name on Schedule
        1
        hereto against payment of the purchase price (the “Purchase
        Price”)
        set forth on Schedule
        1
        hereto. Each Investor acknowledges that the Securities acquired hereunder
        are
        subject to restrictions on transfer under both the federal securities laws
        of
        the U.S. and applicable state securities laws in the U.S., and the terms
        of this
        Agreement and the Promissory Note.

       

      ARTICLE
        III

      CLOSING

       

      3.1 Closing.
        The closing of the sale to, and purchase by, the Investors of the Securities
        (the “Closing”)
        shall occur at the offices of the Company, or at such other location or by
        such
        other means as the parties hereto may agree, on the date hereof or at such
        other
        time and place as the parties hereto may agree (the “Closing
        Date”).
        In the event that such date is not a Business Day, the Closing Date shall
        be
        deemed to be the first Business Day following such date.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      3.2 Deliveries
        by the Investors.
        At the Closing, each Investor shall deliver to the Company:

       

      (a) The
        cash component of the Purchase Price, which calculates to 16.25% of the Purchase
        Price payable by wire transfer of immediately available funds to an account
        that
        the Company designated in writing to each Investor prior to the Closing Date
        or
        such other funds as the Company may accept; 

       

      (b) An
        executed Promissory Note in the form annexed hereto as Exhibit B, for the
        payment of the remaining 83.75% of the Purchase Price; 

       

      (c) An
        executed Subscription Agreement;

       

      (d) An
        executed Accredited Investor Questionnaire;

       

      (e) An
        executed Stock Power in the form annexed hereto as Exhibit C.

       

      (f) Such
        other documents as are required to be delivered by the Investor to the Company
        or that are, in the opinion of legal counsel to the Company, necessary or
        advisable for the completion of the transaction.

       

      3.3 Other
        Deliveries.
        At the Closing, the Company and the Investors will deliver such duly executed
        Transaction Documents as are required to be executed by the parties hereunder
        or
        thereunder.

       

      ARTICLE
        IV

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS OF THE INVESTORS

       

      Each
        Investor acknowledges that this Agreement is made with the Company in reliance
        upon Investor’s representation to the Company. Each Investor, severally as to
        itself and not jointly, represents and warrants to and agrees with the Company
        as follows:

       

      4.1 Regulation
        S Representations and Warranties.

       

      US
        Person.
        Investor represents that it is not an “U.S. Person” as that term is defined in
        Rule 902(k) of Regulation S promulgated under the Securities Act, that the
        Investor resides outside of the United States, and that the Investor has
        accurately completed the accredited investor questionnaire set forth as
Exhibit
        A
        attached hereto. At the time of the origination of contact concerning this
        Agreement and the date of the execution and delivery of this Agreement, the
        Subscriber was outside of the United States. The transactions contemplated
        by
        this Agreement have not been pre-arranged with a buyer located in the United
        States or with a U.S. Person, and are not part of a plan or scheme to evade
        the
        registration requirements of the Securities Act. 

       

      Dealer;
        Distributor.
        Investor represents that it is not a distributor or dealer as such term is
        defined in Section 2(a)(12) of the Securities Act, or a person receiving
        a
        selling concession, fee or other remuneration in connection with the
        Securities.

       

      Resale
        Limitations.
        Investor understands that the Securities have not been, and will not upon
        issuance be, registered under the Securities Act of 1933, as amended (the
        “Securities
        Act”),
        and further understands that the Securities are “restricted securities” as such
        term is defined in Rule 144 promulgated under the Act and may be resold without
        registration under the Act and the applicable rules and regulations under
        the
        Act, only in very limited circumstances. In this connection, Investor represents
        that it is familiar with the terms and provisions of Regulation S (including
        Rule 903 and Rule 904 promulgated under the Securities Act) and Rule 144
        promulgated under the Securities Act, as presently in effect, and understands
        the resale limitations imposed thereby and by the Securities Act. Investor
        further agrees that all offers and sales of the Securities prior to the
        expiration of the one year distribution compliance period shall be made in
        accordance with the terms and provisions of the Securities Act including
        without
        limitation Rules 144, 903 and 904 promulgated under the Securities Act, pursuant
        to a registration of the Securities under the Securities Act, or pursuant
        to an
        available exemption from the registration requirements of the Securities
        Act.
        Neither the undersigned nor or any person acting on its behalf has engaged,
        nor
        will engage, in any directed selling efforts to U.S. Persons with respect
        to the
        Shares and the undersigned and any person acting on its behalf have complied
        and
        will comply with the "offering restrictions" requirements of Regulation S
        under
        the Securities Act.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      Hedging
        Transactions.
        Investor agrees not to engage in hedging transactions with regard to the
        Securities prior to the expiration of the one-year distribution compliance
        period.

       

      Restrictive
        Legends.
        Investor further understands that the certificates evidencing the Securities
        shall bear one or more of the following legends:

       

      “These
        securities have not been registered under the Securities Act of 1933, as
        amended
        (the “Act”).
        They
        may not be sold, offered for sale, pledged or hypothecated in the absence
        of a
        registration statement in effect with respect to the securities under the
        Act
        unless an opinion of counsel to the Company is delivered to the effect that
        such
        registration is not required or that the securities are being sold pursuant
        to
        Rule 144 of the Act and therefore this legend should be removed.” 

       

      “Transfer
        of these securities is prohibited except in accordance with the provisions
        of
        Regulation S promulgated under the Securities Act of 1933, as amended (the
        “Act”), pursuant to registration under the Act, or pursuant to an available
        exemption from registration. Hedging transactions involving these securities
        may
        not be conducted unless in compliance with the Act.”

       

      “These
        securities are subject to the provisions of that certain Subscription Agreement
        and Promissory Note between the Company and the original holder hereof, and
        may
        not be sold, offered for sale, pledged or hypothecated unless permitted under
        such documents.”

       

      Any
        legend required by the securities laws of any applicable
        jurisdictions.

       

      Acquisition
        for Own Account.
        Investor hereby confirms that the Securities will be acquired for investment
        for
        Investor’s own account, not as a nominee or agent and not with a view to the
        resale or distribution of any part thereof, not for the benefit or the account
        of a U.S. Person, and that Investor does not have any present intention of
        selling, granting any participation in or otherwise distributing any such
        Securities. Investor further represents that Investor does not have any
        contract, undertaking, agreement or arrangement with any person to sell,
        transfer, encumber, pledge, hypothecate or grant participations to such person
        or to any third person, with respect to any of the Securities.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      No
        Public Review/ No Soliciting Materials.
        Investor understands that no federal or state agency has recommended or endorsed
        the purchase of the Securities or passed on the adequacy or accuracy of the
        information set forth in this Agreement. Investor acknowledges that it has
        not
        seen, received, been presented with, or been solicited by any leaflet, public
        promotional meeting, newspaper or magazine article or advertisement, radio
        or
        television advertisement, or any other form of advertising or general
        solicitation with respect to the sale of the Securities.

      4.2 General
        Representations and Warranties.

       

      Organization.
        If Investor is an entity, Investor is validly existing and in good standing
        under the laws of its jurisdiction of organization, and has all requisite
        power
        and authority to enter into this Agreement and consummate the transactions
        contemplated hereby.

       

      Validity.
        The execution, delivery and performance of this Agreement, and the other
        documents and instruments referred to herein, in each case to which Investor
        is
        a party, and the consummation of the transactions contemplated hereby, have
        been
        duly authorized by all necessary action on the part of Investor. This Agreement
        and each other Transaction Document have been duly and validly executed and
        delivered by Investor and assuming their due authorization, execution and
        delivery by the Company constitute a valid and binding obligation of Investor,
        enforceable against it in accordance with the terms of each Transaction
        Document, subject to bankruptcy, insolvency, reorganization, fraudulent
        transfer, moratorium and other similar laws now or hereafter in effect relating
        to or affecting creditors' rights generally and the rights of creditors of
        insurance companies generally.

       

      Disclosure
        of Information.
        Investor acknowledges that it has received or has had the opportunity to
        review
        all the information it considers necessary or appropriate for deciding whether
        to purchase the Securities. Investor further represents that it has had an
        opportunity to ask questions and receive answers from the Company regarding
        the
        terms and conditions of the offering of the Securities and the business,
        properties, prospects and financial condition of the Company. Investor further
        acknowledges that it has been advised to, and has, carefully reviewed the
        Company’s filings with the U.S. Securities and Exchange Commission.

       

      Investment
        Experience.
        Investor is an investor in securities of companies in the development stage
        and
        acknowledges that it is able to fend for itself, can bear the economic risk
        of
        its investment and has such knowledge and experience in financial or business
        matters such that it is capable of evaluating the merits and risks of the
        investment in the Securities. If the Investor is an entity, Investor represents
        that it has not been organized for the purpose of acquiring the Securities.
        

       

      Acknowledgment
        of Risk.
        Investor understands the risks involved in investing in the Company and
        represents that it can bear the full loss of its investment in the
        Company.

       

      Tax
        Consequences.
        Investor is aware that there can be no assurance regarding the federal, state
        or
        local tax consequences of an investment in the Company, nor can there be
        any
        assurance that the Code or the regulations promulgated thereunder or other
        applicable laws and regulations will not be amended at some future time in
        such
        manner as to deprive the Company and its stockholders of any tax benefits
        that
        might be received. In making this investment, Investor is relying upon the
        advice of its personal tax advisor with respect to the tax aspects of an
        investment in the Company and not on the Company or any agent
        thereof.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      Tax
        Allocation.
        Investor understands that taxable income and gain allocated to the Investor
        by
        the Company and the tax on the portion thereof allocated to the Investor
        for any
        year may exceed the cash distributions from the Company to the Investor and,
        if
        so, the Investor will have to look to sources other than distributions from
        the
        Company to pay such tax.

      Brokers.
        There is no broker, investment banker, financial advisor, finder or other
        Person
        which has been retained by or is authorized to act on behalf of Investor
        who
        might be entitled to any fee or commission for which the Company will be
        liable
        in connection with the execution of this Agreement.

       

      ARTICLE
        V

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS BY THE COMPANY

       

      The
        Company represents and warrants to and agrees with each Investor as
        follows:

       

      5.1 Limitation.
        The Company makes no representations or warranties other than the
        representations and warranties contained in this Agreement.

       

      5.2 Due
        Issuance and Authorization of Capital Stock.
        All of the outstanding shares of capital stock of the Company have been validly
        issued and are fully paid and nonassessable. No shares of capital stock of
        the
        Company are subject to any lien, claim, judgment, charge, mortgage, security
        interest, pledge, escrow equity or other encumbrance of any kind (including
        any
        agreement to give any of the foregoing, any conditional sale or other title
        retention agreement, and any lease in the nature thereof, but specifically
        excluding any restrictive legend required by applicable US Securities Laws)
        and
        any option, trust or other preferential arrangement having the practical
        effect
        of any of the foregoing (collectively, “Encumbrances”)
        and the sale and delivery of the Securities to the Investor pursuant to the
        terms hereof will vest in the Investor legal and valid title to such Securities
        free and clear of all Encumbrances.

       

      5.3 Organization.
        The Company is a corporation validly existing and in good standing under
        the
        laws of the State of Nevada. 

       

      5.4 Authorization;
        Enforcement.
        The Company has all requisite corporate power and has taken all necessary
        corporate action required for the due authorization, execution, delivery
        and
        performance by the Company of this Agreement and the consummation of the
        transactions contemplated hereby (including, without limitation, the issuance
        of
        the Securities). 

       

      5.5 Issuance
        of Shares.
        Upon issuance against payment of the Purchase Price, the Securities will
        be duly
        authorized, validly issued, fully paid and non-assessable, and such Securities
        will be free from all taxes, liens, claims and Encumbrances, and will not
        impose
        personal liability upon the holder thereof.

       

      5.6 Registration.
        The Company shall use commercially reasonable efforts to file with the SEC
        a
        Registration Statement covering the resale of the Securities within two months
        of the date of this Agreement. The Company shall use commercially reasonable
        efforts to cause the Registration Statement to be declared effective within
        nine
        months of the date of this Agreement. If the Registration Statement
        required to be filed by the Company is not declared effective by the SEC
        on or
        prior to close of business on the nine month anniversary of the date hereof,
        then the Company will pay to the Investors, pro rata, an aggregate amount
        of
        $65,000. It shall be a condition precedent to the obligations of the Company
        to
        complete the registration pursuant to this Agreement with respect to the
        Securities that such Investor shall furnish to the Company such information
        regarding itself, the Securities held by it and the intended method of
        disposition of the Securities held by it as shall be reasonably required
        to
        effect the registration of such Securities and shall execute such documents
        in
        connection with such registration as the Company may reasonably
        request.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      ARTICLE
        VI

      RISK
        FACTORS

       

      THIS
        OFFERING INVOLVES AN EXTREMELY HIGH DEGREE OF RISK. IT IS POSSIBLE THAT EACH
        INVESTOR MAY LOSE HIS ENTIRE INVESTMENT IN THE COMPANY. THERE CAN BE NO
        ASSURANCE THAT AN ADEQUATE MARKET WILL DEVELOP IN THE SECURITIES OF THE COMPANY
        NECESSARY TO SELL THE SECURITIES. THE SECURITIES ARE SUBJECT TO SUBSTANTIAL
        RESTRICTIONS ON TRANSFER THAT MAY MAKE IT DIFFICULT FOR INVESTORS TO LIQUIDATE
        THEIR INVESTMENT IN THE COMPANY. THESE RISK FACTORS ARE NOT, AND ARE NOT
        MEANT
        TO BE, COMPLETE. INVESTORS SHOULD CAREFULLY CONSIDER ALL RISKS ASSOCIATED
        WITH
        THE INVESTMENT, AND SHOULD CAREFULLY REVIEW THE COMPANY’S FILINGS WITH THE
        SECURITIES AND EXCHANGE COMMISSION.

       

      ARTICLE
        VII

      DEFINITIONS

       

      7.1 Definitions.
        Unless the context otherwise requires, the terms defined in this Section
        7.1
        shall have the meanings specified for all purposes of this
        Agreement.

       

      Except
        as
        otherwise expressly provided, all accounting terms used in this Agreement,
        whether or not defined in this Section 7.1, shall be construed in accordance
        with United States generally accepted accounting principles.

       

      “Affiliate”
        of any Person means any other Person which directly, or indirectly through
        one
        or more intermediaries, controls, or is controlled by, or is under common
        control with, such Person. The term “control” (including the terms “controlled
        by” and “under common control with”) as used with respect to any Person means
        the possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies of such Person, whether through
        the
        ownership of voting securities, by contract or otherwise.

       

      “Agreement”
        means this Subscription Agreement.

       

      “Business
        Day” means a day other than a Saturday, Sunday or day on which banking
        institutions in Los Angeles, California are authorized or required to remain
        closed.

       

      “By-Laws”
        shall mean the By-Laws of the Company as in effect on the Closing Date and
        as
        hereafter from time to time amended, modified, supplemented or
        restated.

       

      “Common
        Stock” means the shares of the Company's common stock with a par value of $0.001
        per share authorized in, and designated as, “Common Stock” in the Company's
        Articles of Incorporation.

       

      “Closing”
        has the meaning assigned to it in Section 3.1 hereof.

       

      “Closing
        Date” has the meaning assigned to it in Section 3.1 hereof.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      “Code”
        means the Internal Revenue Code of 1986, as amended.

       

      “Encumbrances”
        has the meaning assigned to it in Section 5.2 hereof.

       

      “Indemnification
        Period” shall have the meaning set forth in Section 8.3.

       

      “Indemnified
        Party” shall have the meaning set forth in Section 8.3.

       

      “Indemnifying
        Party” shall have the meaning set forth in Section 8.3.

       

      “Investor”
        has the meaning set forth in the recitals.

       

      “Losses”
        shall have the meaning set forth in Section 8.3.

       

      “Person”
        means any individual, sole proprietorship, partnership, limited liability
        company, joint venture, trust, incorporated organization, association,
        corporation, institution, public benefit corporation, government (whether
        federal, state, country, city, municipal or otherwise, including, without
        limitation, any instrumentality, division, agency, body or department thereof)
        or other entity.

       

      “Purchase
        Price” has the meaning assigned it in Section 2.1 hereof.

       

      “Registration
        Statement” shall mean the registration statement to be filed by the Company with
        the SEC under the Securities Act for the resale of the Securities by the
        Investors.

       

      “SEC”
        means the Securities and Exchange Commission.

       

      “Securities”
        shall have the meaning assigned to such term in Section 1.1 hereof.

       

      “Securities
        Act” or “Act” means the Securities Act of 1933, as amended.

       

      “Third
        Party Claimant” shall have the meaning set forth in Section 8.3.

       

      “Transaction
        Documents” shall mean this Agreement and all other documents as are required to
        be delivered by the Investor to the Company pursuant to this
        Agreement.

       

      “U.S.”
        means the United States of America.

       

      ARTICLE
        VIII

      MISCELLANEOUS

       

      8.1 Waivers
        and Amendments.
        Upon the approval of the Company, and the written consent of the each of
        the
        Investors (a) the obligations of the Company, and the rights of an Investor
        under this Agreement may be waived (either generally or in a particular
        instance, either retroactively or prospectively and either for a specified
        period of time or indefinitely), and (b) the Company, may enter into a
        supplemental agreement for the purpose of adding any provisions to or changing
        in any manner or eliminating any of the provisions of this Agreement, or
        of any
        supplemental agreement or modifying in any manner the rights and obligations
        hereunder or thereunder of the Investors and the Company; provided, however,
        that without each Investor's written consent, no such amendment or waiver
        shall
        affect adversely such Investor's rights hereunder in a discriminatory manner
        inconsistent with its adverse effects on rights of other Investors hereunder
        (other than as reflected by the different number of shares held by such
        Investors).

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      Neither
        this Agreement, nor any provision hereof, may be changed, waived, discharged
        or
        terminated orally or by course of dealing, but only by a statement in writing
        signed by the party against which enforcement of the change, waiver, discharge
        or termination is sought, except to the extent provided in this
        Section.

       

      8.2 Notices.
        All notices, requests, consents and other communications required or permitted
        hereunder shall be in writing and shall be hand delivered or mailed postage
        prepaid by registered or certified mail or transmitted by facsimile transmission
        (with immediate telephonic confirmation thereafter), 

       

      
        	 	
                (a)

              	
                If
                  to an Investor, to the respective addresses set forth on the counterpart
                  signature pages of this Agreement signed by such
                  Investor:

              

      

      

      
        	 	
                or

              	
                (b)

              	
                If
                  to the Company:

              
	 	 	 	
                No.
                  5A, Zuanshi Ge, Fuqiang Yi Tian Ming Yuan, 

              
	 	 	 	
                Fu
                  Tian Qu, Shenzhen City, P.R. China

              
	 	 	 	
                Facsimile
                  No.: (213) 223-2276

              

      

      

      or
        at
        such other address as the Company or an Investor each may specify by written
        notice to the others, and each such notice, request, consent and other
        communication shall for all purposes of the Agreement be treated as being
        effective or having been given when delivered if delivered personally, upon
        receipt of facsimile confirmation if transmitted by facsimile, or, if sent
        by
        mail, at the earlier of its receipt or 72 hours after the same has been
        deposited in a regularly maintained receptacle for the deposit of United
        States
        mail, addressed and postage prepaid as aforesaid. 

       

      8.3 Indemnification
        of the Company. 

       

      Each
        Investor, severally as to itself and not jointly, hereby indemnifies the
        Company
        against and agrees to hold the Company harmless from any and all Losses arising
        out of any misrepresentation or breach of any representation, warranty or
        covenant by such Investor pursuant to this Agreement.

       

      Claims
        Notice.
        In the event the Company wishes to assert a claim for indemnification hereunder,
        (the “Indemnified
        Party”)
        it shall deliver written notice (a “Claims
        Notice”)
        to the applicable Investor (the “Indemnifying
        Party”),
        specifying the facts constituting the basis for, and the amount (if known)
        of
        the claim asserted.

       

      Third
        Party Claims.
        Upon making any indemnification payment, the Indemnifying Party will, to
        the
        extent of such payment, be subrogated to all rights of the Indemnified Party
        against any third party in respect of the Loss to which the payment relates;
        provided, however, that until the Indemnified Party recovers full payment
        of its
        Loss, any and all claims of the Indemnifying Party against any such third
        party
        on account of the payment are hereby made expressly subordinated and subjected
        in right of payment to the Indemnified Party’s rights against such third party.
        Without limiting the generality of any other provision hereof, the Indemnified
        Party and Indemnifying Party will duly execute upon request all instruments
        reasonably necessary to evidence and perfect the above-described subrogation
        and
        subordination rights.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (a) Right
        to Contest Claims of Third Parties.
        

       

      (i) If
        an Indemnified Party asserts, or may in the future seek to assert, a claim
        for
        indemnification hereunder because of any action, cause of action or suit
        brought
        by any Person not a party to this Agreement (a “Third
        Party Claimant”)
        that may result in a Loss with respect to which the Indemnified Party would
        be
        entitled to indemnification pursuant to this Section 8.3 (an “Asserted
        Liability”),
        the Indemnified Party shall deliver to the Indemnifying Party a Claims Notice
        with respect thereto, which Claims Notice shall, in accordance with the
        provisions of Section 8.2 hereof, be delivered as promptly as practicable
        after
        an action in connection with such Asserted Liability is commenced against
        the
        Indemnified Party.

       

      (ii) The
        Indemnifying Party shall have the right, upon written notice to the Indemnified
        Party, to investigate, contest, defend or settle any Asserted Liability that
        may
        result in a Loss with respect to which the Indemnified Party is entitled
        to
        indemnification pursuant to this Section 8.3; provided that (A) the counsel
        for
        the Indemnifying Party who conducts the defense of such claim or litigation
        is
        reasonably satisfactory to the Indemnified Party, and (B) the Indemnified
        Party
        may, at its option and at its own expense, participate in the investigation,
        contesting, defense or settlement of any such Asserted Liability through
        representatives and counsel of its own choosing (it being understood that
        the
        Indemnifying Party shall bear the cost of such counsel if the Indemnified
        Party
        in good faith determines that it may have one or more defenses or counterclaims
        that are inconsistent with one or more of those of the Indemnifying Party
        in
        respect of the Asserted Liability); and, provided further, that the Indemnifying
        Party shall not settle any Asserted Liability unless (i) such settlement
        is on
        exclusively monetary terms and provides as an unconditional term an immediate
        release of the Indemnified Party for all liability with respect to such Asserted
        Liability or (ii) the Indemnified Party has consented to the terms of such
        settlement. If requested by the Indemnifying Party, the Indemnified Party
        will,
        at the sole cost and expense of the Indemnifying Party, cooperate with
        reasonable requests of the Indemnifying Party and its counsel in contesting
        any
        Asserted Liability, including, if appropriate and related to the Asserted
        Liability in question, in making any counterclaim against the Third Party
        Claimant, or any cross-complaint against any Person (other than the Indemnified
        Party or its Affiliates). If the Indemnifying Party fails to undertake the
        defense of the Asserted Liability reasonably promptly, the Indemnified Party
        may, at its option and at the Indemnifying Party’s expense, to do so in such
        manner as it deems appropriate; provided, however, that the Indemnified Party
        shall not settle or compromise any Asserted Liability for which it seeks
        indemnification hereunder without the prior written consent of the Indemnifying
        Party (which shall not be unreasonably withheld or delayed).

       

      (iii) The
        Indemnifying Party may participate in (but not control) the defense of any
        Asserted Liability that it has not elected to defend with its own counsel
        and at
        its own expense.

       

      (iv) The
        Indemnifying Party and the Indemnified Party shall make mutually available
        to
        each other all relevant information in their possession relating to any Asserted
        Liability (except to the extent that such action would result in a loss of
        attorney-client privilege or would violate any applicable law) and shall
        cooperate with each other in the defense thereof.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      (e) No
        Duplication; Sole Remedy.

       

      (i) Any
        liability for indemnification hereunder shall be determined without duplication
        of recovery by reason of the state of facts giving rise to such liability
        constituting a breach of more than one representation or warranty.

       

      (ii) The
        parties’ respective rights to indemnification provided for in this Section 8.3
        shall be the exclusive remedy for any Losses for which indemnification is
        provided hereunder; provided, however, that nothing contained herein shall
        prevent an Indemnified Party from pursuing remedies that may be available
        to
        such party under applicable law in the event of an Indemnifying Party’s failure
        to comply with its indemnification obligations under this Section 8.3 or
        in the
        case of fraud.

       

      8.4 Survival
        of Representations, Warranties and Covenants.
        The representations and warranties of the parties hereto made pursuant to
        this
        Agreement shall survive the Closing until two (2) years after the Closing
        Date,
        provided that the representations and warranties contained in Sections 4.1,
        4.2,
        5.2, and 5.3 shall survive indefinitely.

       

      8.5 No
        Implied Waivers.
        No failure or delay by any party in exercising any right, power or privilege
        hereunder shall operate as a waiver thereof nor shall any single or partial
        exercise thereof preclude any other or further exercise thereof or the exercise
        of any other right, power or privilege. The rights and remedies herein provided
        shall be cumulative and not exclusive of any rights or remedies provided
        by
        law.

       

      8.6 Successors
        and Assigns.
        All the terms and provisions of this Agreement shall be binding upon and
        inure
        to the benefit of and be enforceable by the respective parties hereto, the
        successors and assigns of the respective Investors and the successors of
        the
        Company whether so expressed or not. None of the parties hereto may assign
        any
        of its rights or obligations hereunder without the prior written consent
        of the
        other parties hereto, except that an Investor may, without the prior consent
        of
        the Company, assign its rights hereunder to any of its Affiliates. This
        Agreement shall not inure to the benefit of or be enforceable by any other
        Person.

       

      8.7 Headings.
        The headings of the Sections and paragraphs of this Agreement have been inserted
        for convenience of reference only and do not constitute a part of this
        Agreement.

       

      8.8 Governing
        Law.
        This Agreement will be governed by and construed under the laws of the State
        of
        New York without regard to its conflicts of laws rules. 

       

      8.9 Expenses.
        Except as otherwise specifically provided in this Agreement, the parties
        to this
        Agreement shall bear their respective costs and expenses incurred in connection
        with the preparation and execution of this Agreement and the transactions
        contemplated hereby.

       

      8.10 Jurisdiction.
        Any suit, action or proceeding seeking to enforce any provision of, or based
        on
        any matter arising out of or in connection with, this Agreement or the
        transactions contemplated hereby may be brought in any federal or state court
        located in the County of New York and State of New York, and each of the
        parties
        hereby consents to the exclusive jurisdiction of such courts (and of the
        appropriate appellate courts therefrom) in any such suit, action or proceeding
        and irrevocably waives, to the fullest extent permitted by law, any objection
        which it may now or hereafter have to the laying of the venue of any such
        suit,
        action or proceeding in any such court or that any such suit, action or
        proceeding which is brought in any such court has been brought in an
        inconvenient forum. Process in any such suit, action or proceeding may be
        served
        on any party anywhere in the world, whether within or without the jurisdiction
        of any such court. Without limiting the foregoing, each party agrees that
        service of process on such party as provided in Section 8.2 shall be deemed
        effective service of process on such party.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      8.11 Waiver
        of Jury Trial.
        EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
        TRIAL
        BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
        OR
        THE TRANSACTIONS CONTEMPLATED HEREBY.

       

      8.12 Counterparts;
        Effectiveness.
        This Agreement may be executed in any number of counterparts and by different
        parties hereto in separate counterparts, with the same effect as if all parties
        had signed the same document. All such counterparts shall be deemed an original,
        shall be construed together and shall constitute one and the same instrument.
        This Agreement shall become effective when each party hereto has received
        counterparts hereof signed by all of the other parties hereto.

       

      8.13 Entire
        Agreement.
        This Agreement and the other Transaction Documents contain the entire agreement
        among the parties hereto with respect to the subject matter hereof and such
        Agreement supersedes and replaces all other prior agreements, written or
        oral,
        among the parties hereto with respect to the subject matter hereof.

       

      8.14 Severability.
        If any term, provision, covenant or restriction of this Agreement is held
        by a
        court of competent jurisdiction or other authority to be invalid, void or
        unenforceable, the remainder of the terms, provisions, covenants and
        restrictions of this Agreement shall remain in full force and effect and
        shall
        in no way be affected, impaired or invalidated so long as the economic or
        legal
        substance of the transactions contemplated hereby is not affected in any
        manner
        materially adverse to any party. Upon such a determination, the parties shall
        negotiate in good faith to modify this Agreement so as to affect the original
        intent of the parties as closely as possible in an acceptable manner in order
        that the transactions contemplated hereby are consummated as originally
        contemplated to the fullest extent possible.

       

      8.15 No
        Further Obligation.
        Following the Closing, except for the payment by each Investor of the Purchase
        Price in accordance with the terms hereof, no Investor has any further
        obligation to invest in the Company under this Agreement, the other Transaction
        Documents, or any of the transactions contemplated hereby or
        thereby.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the Investors hereto have caused this Subscription Agreement
        to
        be duly executed as of the day and year first above written.

      

       

      
        	
                Home
                  System Group:

                 

                 

                 

                 

                __________________________

                Weiqiu
                  Li

                Chief
                  Executive Officer

              	 

      

      

      Investors:
        

       

      

      
        	
                Name

              	
                Signature

              
	
                 

                1)
                  TOTAL GIANT GROUP LIMITED

                Xiaobin
                  Liu, President, Sole Director

              	 
	
                 

                2)
                  TOTAL SHINE GROUP LIMITED

                Chao
                  Zhang, President, Sole Director

                 

              	 
	
                 

                3)
                  VICTORY HIGH INVESTMENTS LIMITED

                Dongshan
                  Wang, President, Sole Director

              	 
	
                 

                4)
                  THINK BIG TRADING LIMITED

                Hanzhi
                  Mao, President, Sole Director

              	 
	 	 

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      EXHIBIT
        A

      ACCREDITED
        INVESTOR QUESTIONNAIRE

      

      To:
         Home
        System Group (the “Company”)

      

      The
        undersigned hereby represents and warrants that the information contained
        in
        this accredited investor questionnaire is true and accurate and acknowledges
        that the Company is relying thereon.

      

      Status
        as
        an “Accredited Investor”. Investor is (check ALL that apply):

      

      _____
        (i) A
        natural
        person whose individual net worth (assets less liabilities), or joint net
        worth
        with his or her spouse, exceeds $1,000,000.

      

      _____
        (ii) A
        natural
        person whose individual income was in excess of $200,000, or whose joint
        income
        with his or her spouse was in excess of $300,000, in each of the two most
        recent
        years, and who has a reasonable expectation of reaching the same income level
        for the current year.

      

      _____
        (iii) A
        director or an executive officer of the Company.

      

      _____
        (iv) A
        bank,
        insurance company, registered investment business development company, small
        business investment company or employee benefit plan.

      

      _____
        (v) A
        savings
        and loan association, credit union, or similar financial institution, or
        a
        registered broker or dealer.

      

      _____
        (vi) A
        private
        business development company.

      

      _____
        (vii) An
        organization described in Section 501(c)(3) of the Internal Revenue Code
        with
        assets in excess of $5,000,000. Any
        organization described in section 501(c)(3) of the Internal Revenue Code,
        corporation, Massachusetts or similar business trust, or partnership, not
        formed
        for the specific purpose of acquiring the securities offered, with total
        assets
        in excess of $5,000,000.

      

      _____
        (viii) A
        trust
        with assets in excess of $5,000,000.

      

      _____
        (ix) An
        entity
        in which all of the equity owners are accredited investors. Also check the
        item(s) [(i)-(ix)] that apply to the equity owners. [This item is not available
        to an irrevocable trust.]

      

      _____
        (x) A
        self-directed IRA, Keogh, or similar plan of which the individual directing
        the
        investments qualifies as an “accredited investor” in one or more of items
        (i)-(ix) above. Also check the item(s) [(i)-(ix)] that apply to the
        individual.

      

      _____
        (xi) None
        of
        the above.

      

      The
        undersigned submits this accredited investor questionnaire as of the date
        written below.

      
        	
                __________________________

                Name:
                  

              	 

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      PROMISSORY
        NOTE

      AND
        PLEDGE AGREEMENT

      

      

      

      May
        ,
        2007

      

      

      _______________
        residing at ________________________ (the “Maker”) promises to pay the principal
        amount of $_____________ (the “Principal Amount”) to the order of Home System
        Group (the “Payee”), a Nevada corporation, upon the earlier to occur of: (i) two
        years from the date of this Note; or (ii) within five business days of written
        notification from the Payee that a registration statement (the “Registration
        Statement”) pursuant to the Securities Act of 1933, as amended, filed by the
        Payee with the Securities and Exchange Commission (the “SEC”) registering the
        shares of Payee’s Common Stock was declared effective by the SEC (the “Maturity
        Date”).

      

      By
        Maker's execution and delivery of this Promissory Note and Pledge Agreement
        (the
“Note”) and Payee's acceptance of thereof, Maker and Payee acknowledge and agree
        that the proceeds of this Note to Maker shall be used to finance the Maker's
        purchase of ___________ shares of the Payee's common stock, par value $.001
        per
        share (the “Shares”) pursuant to a Subscription Agreement dated the date hereof
        (the “Subscription Agreement”).

      

      The
        rights, duties and obligations of (a) Maker under this Note may not be assigned
        without the prior consent of Payee and (b) Payee under this Note may be assigned
        without the prior consent of Maker. 

      

      In
        order
        to secure (i) the due and punctual payment of all monetary obligations hereunder
        of Maker to Payee and any reasonable costs and expenses (including, but not
        limited to, all legal fees and expenses) of collection or enforcement of
        any
        such obligations and (ii) the due and punctual payment of any costs and expenses
        incurred in connection with the realization of the security for which this
        Note
        provides and any reasonable costs and expenses (including, but not limited
        to,
        all legal fees and expenses) incurred in connection with any proceedings
        to
        which this Note may give rise (collectively referred to herein as
“Liabilities”), Maker hereby transfers, assigns, grants, bestows, sells, conveys
        and pledges to Payee a first security interest in the Collateral (as herein
        defined), which security interest shall remain in full force and effect until
        all of the Liabilities shall have been paid in full to Payee, or until this
        Note
        is cancelled as set forth herein.

      

      For
        purposes of this Note, “Collateral” shall mean all of Maker's right, title and
        interest in and to the Shares, represented by the stock certificate to be
        issued
        to the Payee in connection with the execution of this Note, and all proceeds
        and
        products thereof (as the foregoing terms are defined in the Uniform Commercial
        Code as in effect in the State of New York). 

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      Concurrently
        with the Maker's execution and delivery of this Note, Maker has (a) duly
        executed in blank a stock power required by the pledge of the Collateral
        hereunder; (b) delivered the stock certificate representing the Collateral
        to
        the Payee to be held by the Payee pending the payment in full of this Note;
        and
        (c) irrevocably appointed Payee as Maker's attorney-in-fact to complete the
        stock power to realize upon the Collateral upon nonpayment of principal or
        interest under this Note, with such appointment being coupled with an
        interest.

       

      This
        Note
        may be prepaid in whole or in part without premium or penalty or at any time
        and
        from time to time at the option of the Maker. Contemporaneously with Maker's
        final payment of all amounts due under this Note, the original copy shall
        be
        marked “Paid in Full” and signed by Payee, and the cancelled original copy of
        the Note and all Collateral shall be returned by Payee to Maker. 

      

      Except
        as
        contemplated by this Note, Maker shall not encumber or grant a security interest
        in any of the Collateral, without the prior written consent of Payee, and
        Maker
        hereby represents that he has not done so heretofore and, other than the
        grant
        of the security interest contemplated hereby, the Collateral pledged by him
        hereunder is, and will be, owned by him free and clear of all liens and
        encumbrances.

      

      In
        the
        event the Maker defaults in the payment of this Note, the Payee shall give
        written notice of such default to the Maker. In the event the Maker does
        not pay
        all outstanding principal due within five business days of his receipt of
        such
        notice, Payee may thereupon proceed against the Maker to collect the Principal
        Amount.

      

      If
        the
        Maker does not pay the Principal Amount to the Payee within such five business
        day period, then Payee may, to the extent permitted by applicable law, either
        (i) sell for the account of the Maker any and all of the Shares in the Payee's
        discretion in such quantities or lots as may seem best to the Payee, at which
        sale or sales the maker may bid and purchase, or (ii) return such shares
        to
        treasury. After first applying the proceeds of the sale to the payment of
        the
        expenses of sale, the Payee shall then apply the proceeds to the satisfaction
        of
        this Note, and thereafter may pay any surplus and deliver any unsold Shares
        to
        the Maker. In the event that Payee is prohibited by applicable law from selling
        the Shares, Payee shall be entitled to retain a sufficient number of Shares
        such
        that the product obtained by multiplying the number of shares retained by
        Payee
        hereunder times the officially reported market closing price for comparable
        Shares on the date this remedy is exercised shall be equal to the balance
        due
        hereunder. Thereupon, all obligations between the Maker and Payee under this
        Note and Pledge Agreement shall cease. In the event that the sale of the
        full
        amount of Shares does not generate sufficient funds to retire this Note and
        satisfy Maker's obligations hereunder, or in the event that the Maker is
        prohibited from selling such Shares and retains the Shares as provided herein,
        the Maker will be responsible for the balance of the Principal Amount
        due.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      This
        Note
        shall be governed by, and construed in accordance with the internal laws
        of the
        State of New York without giving effect to the conflict of laws provisions
        thereof. 

      

      IN
        WITNESS WHEREOF, Maker has executed and delivered this Note and Pledge Agreement
        as of the date first above written.

      

      
        	 	
                Maker

              
	 	 
	 	 
	 	 
	 	 
	 	
                ___________________________

              

      

      

      

      

      Acknowledged
        and Agreed to

      Effective
        as of the date first written above.

      

      Home
        System Group

      

      

      By:
        _______________________

                      
        Weiqiu Li, CEO

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      IRREVOCABLE
        STOCK POWER

      

      

      FOR
        VALUE
        RECEIVED, The undersigned does (do) hereby sell, assign and issue
        unto

      

      ______________________________________________________________________________

      

      ______________________________________________________________________________

      

      __________________________________________________      
        _________________________

      S.
        S. #
        or F. I. D. #

      

      

      __________________
        Shares of the Common Stock of Home System Group represented 

      

      by
        certificate(s) no(s) ________________________________________________ inclusive,
        standing 

      

      in
        the
        name of the undersigned on the books of said Company.

      

      The
        undersigned does (do) hereby irrevocably constitute and appoint Home
        System Group
        Attorney
        to transfer the said stock on the books of said Company, with full power
        of
        substitution 

      

      in
        the
        premises.

      

      

      

      

      _______________________________________________

      

      

      _______________________________________________

          person(s)
        executing this power sign(s) here

      

      

      _________________________________________________________________

                  WITNESS

      

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      SCHEDULE
        1

      

      

      
        	
                Investors

              	
                Address

              	
                Number
                  of Shares of 

                Common
                  Stock Acquired

              	
                Purchase
                  Price

              
	
                1)
                  TOTAL GIANT GROUP LIMITED

              	
                No.
                  5A, Zuanshi Ge, 

                Fuqiang
                  Yi Tian Ming Yuan, 

                Fu
                  Tian Qu, Shenzhen City, P.R. China 

              	
                2,500,000

              	
                USD
                  10,000,000

              
	
                2)
                  TOTAL SHINE GROUP LIMITED

              	
                No.
                  5A, Zuanshi Ge, 

                Fuqiang
                  Yi Tian Ming Yuan, 

                Fu
                  Tian Qu, Shenzhen City, P.R. China 

              	
                2,500,000

              	
                USD
                  10,000,000

              
	
                3)
                  VICTORY HIGH INVESTMENTS LIMITED

              	
                No.
                  5A, Zuanshi Ge, 

                Fuqiang
                  Yi Tian Ming Yuan, 

                Fu
                  Tian Qu, Shenzhen City, P.R. China 

              	
                2,500,000

              	
                USD
                  10,000,000

              
	
                4)
                  THINK BIG TRADING LIMITED

              	
                No.
                  5A, Zuanshi Ge, 

                Fuqiang
                  Yi Tian Ming Yuan, 

                Fu
                  Tian Qu, Shenzhen City, P.R. China 

              	
                2,500,000

              	
                USD
                  10,000,000

              

      

      

      

      
        
           

        

        
          18STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”),
      dated
      as of May 24, 2007, is made by and between MSTI Holdings, Inc., a Delaware
      corporation (“Seller”),
      and
      Ron Bell, an individual (“Buyer”).

     

    RECITALS

     

    A. Seller
      owns one thousand (1,000) shares of common stock, $.001 par value per share
      (the
“Shares”),
      of
      FXS Holdings, Inc., a Delaware corporation (the “Company”),
      which
      shares constitute, as of the date hereof, all of the issued and outstanding
      capital stock of the Company.

     

    B. Buyer
      holds 3,169,014 shares of common stock, $.001 par value per share, of Seller
      (the “Purchase
      Price Shares”),
      and
      Buyer has agreed to transfer such interest back to Seller for immediate
      cancellation (the “Redemption”).

     

    C. In
      connection with the Redemption, Buyer wishes to acquire from Seller, and Seller
      wishes to transfer to Buyer, the Shares, upon the terms and subject to the
      conditions set forth herein.

     

    Accordingly,
      the parties hereto agree as follows:

     

    1. Purchase
      and Sale of Stock.
      

     

    (a) Purchased
      Shares.
      Subject
      to the terms and conditions provided below, Seller shall sell and transfer
      to
      Buyer and Buyer shall purchase from Seller, on the Closing Date (as defined
      in
      Section 1(c)), all of the Shares.

     

    (b) Purchase
      Price.
      The
      purchase price for the Shares shall be the transfer and delivery by Buyer to
      Seller of the Purchase Price Shares, deliverable as provided in Section
      2(b).

     

    (c) Closing.
      The
      closing of the transactions contemplated in this Agreement (the “Closing”)
      shall
      take place as soon as practicable following the execution of this Agreement.
      The
      date on which the Closing occurs shall be referred to herein as the Closing
      Date
      (the “Closing
      Date”).

     

    2. Closing.

     

    (a) Transfer
      of Shares.
      At the
      Closing, Seller shall deliver to Buyer certificates representing the Shares,
      duly endorsed to Buyer or as directed by Buyer, which delivery shall vest Buyer
      with good and marketable title to all of the issued and outstanding shares
      of
      capital stock of the Company, free and clear of all liens and
      encumbrances.

     

    (b)
      Payment
      of Purchase Price.
      At the
      Closing, Buyer shall deliver to Seller a certificate or certificates
      representing the Purchase Price Shares duly endorsed to Seller, which delivery
      shall vest Seller with good and marketable title to the Purchase Price Shares,
      free and clear of all liens and encumbrances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Representations
      and Warranties of Seller.
      Seller
      represents and warrants to Buyer as of the date hereof as follows:

     

    (a) Corporate
      Authorization; Enforceability.
      The
      execution, delivery and performance by Seller of this Agreement is within the
      corporate powers and has been, duly authorized by all necessary corporate action
      on the part of Seller. This Agreement has been duly executed and delivered
      by
      Seller and constitutes the valid and binding agreement of Seller, enforceable
      against Seller in accordance with its terms, except to the extent that its
      enforceability may be subject to applicable bankruptcy, insolvency,
      reorganization, moratorium and similar Laws affecting the enforcement of
      creditors’ rights generally and by general equitable principles.

     

    (b) Governmental
      Authorization.
      The
      execution, delivery and performance by Seller of this Agreement requires no
      consent, approval, Order, authorization or action by or in respect of, or filing
      with, any Governmental Authority.

     

    (c) Non-Contravention;
      Consents.
      The
      execution, delivery and performance by Seller of this Agreement and the
      consummation of the transactions contemplated hereby do not (i) violate the
      certificate of incorporation or bylaws of Seller or (ii) violate any applicable
      Law or Order.

     

    (d) Capitalization.
      As of
      the date hereof, Seller owns the Shares, which shares represent 100% of the
      authorized, issued and outstanding capital stock of the Company. The Shares
      to
      be acquired by Buyer are duly authorized, validly issued, fully-paid,
      non-assessable and free and clear of any Liens.

     

    4. Representations
      and Warranties of Buyer.
      Buyer
      represents and warrants to Seller as of the date hereof as follows:

     

    (a) Enforceability.
      The
      execution, delivery and performance by Buyer of this Agreement are within
      Buyer’s powers. This Agreement has been duly executed and delivered by Buyer and
      constitutes the valid and binding agreement of Buyer, enforceable against Buyer
      in accordance with its terms, except to the extent that its enforceability
      may
      be subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and
      similar laws affecting the enforcement of creditors' rights generally and by
      general equitable principles.

     

    (b) Governmental
      Authorization.
      The
      execution, delivery and performance by Buyer of this Agreement require no
      consent, approval, Order, authorization or action by or in respect of, or filing
      with, any Governmental Authority.

     

    (c) Non-Contravention;
      Consents.
      The
      execution, delivery and performance by Buyer of this Agreement, and the
      consummation of the transactions contemplated hereby do not violate any
      applicable Law or Order.

     

    
      
        
        

      

      
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    (d) Purchase
      for Investment.
      Buyer
      is financially able to bear the economic risks of acquiring an interest in
      the
      Company and the other transactions contemplated hereby, and has no need for
      liquidity in this investment. Buyer has such knowledge and experience in
      financial and business matters in general, and with respect to businesses of
      a
      nature similar to the business of the Company, so as to be capable of evaluating
      the merits and risks of, and making an informed business decision with regard
      to, the acquisition of the Shares. Buyer is acquiring the Shares solely for
      his
      own account and not with a view to or for resale in connection with any
      distribution or public offering thereof, within the meaning of any applicable
      securities laws and regulations, unless such distribution or offering is
      registered under the Securities Act of 1933, as amended (the “Securities
      Act”),
      or an
      exemption from such registration is available. Buyer has (i) received all the
      information he has deemed necessary to make an informed investment decision
      with
      respect to the acquisition of the Shares, (ii) had an opportunity to make such
      investigation as he has desired pertaining to the Company and the acquisition
      of
      an interest therein, and to verify the information which is, and has been,
      made
      available to him and (iii) had the opportunity to ask questions of Seller
      concerning the Company. Buyer acknowledges that Buyer is a director and former
      officer of Seller, and a current director and officer of the Company and, as
      such, has actual knowledge of the business, operations and financial affairs
      of
      the Company. Buyer has received no public solicitation or advertisement with
      respect to the offer or sale of the Shares. Buyer realizes that the Shares
      are
“restricted securities” as that term is defined in Rule 144 promulgated by the
      Securities and Exchange Commission under the Securities Act, the resale of
      the
      Shares is restricted by federal and state securities laws and, accordingly,
      the
      Shares must be held indefinitely unless their resale is subsequently registered
      under the Securities Act or an exemption from such registration is available
      for
      their resale. Buyer understands that any resale of the Shares by him must be
      registered under the Securities Act (and any applicable state securities law)
      or
      be effected in circumstances that, in the opinion of counsel for the Company
      at
      the time, create an exemption or otherwise do not require registration under
      the
      Securities Act (or applicable state securities laws). Buyer acknowledges and
      consents that certificates now or hereafter issued for the Shares will bear
      a
      legend substantially as follows:

     

    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
      ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
      INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
      EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
      QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH
      REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE
      SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT
      AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER
      OF
      THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO
      THE
      AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR
      SUCH
      OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT
      VIOLATE THE SECURITIES LAWS.

     

    Buyer
      understands that the Shares are being sold to him pursuant to the exemption
      from
      registration contained in Section 4(1) of the Securities Act and that Seller
      is
      relying upon the representations made herein as one of the bases for claiming
      the Section 4(1) exemption. 

     

    
      
        
        

      

      
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    (e) Liabilities.
      Following the Closing, Seller will have no debts, liabilities or obligations
      relating to the Company or its business or activities, and there are no
      outstanding guaranties, performance or payment bonds, letters of credit or
      other
      contingent contractual obligations that have been undertaken by Seller directly
      or indirectly in relation to the Company or its business and that may survive
      the Closing. 

     

    (f) Title
      to Purchase Price Shares.
      Buyer
      is the sole record and beneficial owner of the Purchase Price Shares. At
      Closing, Buyer will have good and marketable title to the Purchase Price Shares,
      which Purchase Price Shares are, and at the Closing will be, free and clear
      of
      all options, warrants, pledges, claims, liens and encumbrances, and any
      restrictions or limitations prohibiting or restricting transfer to Seller,
      except for restrictions on transfer as contemplated by applicable securities
      laws.

     

    5. Indemnification
      and Release.
      

     

    (a) Indemnification.
      Buyer
      covenants and agrees to indemnify, defend, protect and hold harmless Seller,
      and
      its officers, directors, employees, stockholders, agents, representatives and
      affiliates (collectively, together with Seller, the “Seller
      Indemnified Parties”)
      at all
      times from and after the date of this Agreement from and against all losses,
      liabilities, damages, claims, actions, suits, proceedings, demands, assessments,
      adjustments, costs and expenses (including specifically, but without limitation,
      reasonable attorneys’ fees and expenses of investigation), whether or not
      involving a third party claim and regardless of any negligence of any Seller
      Indemnified Party (collectively, “Losses”),
      incurred by any Seller Indemnified Party as a result of or arising from (i)
      any
      breach of the representations and warranties of Buyer set forth herein or in
      certificates delivered in connection herewith, (ii) any breach or nonfulfillment
      of any covenant or agreement on the part of Buyer under this Agreement, (iii)
      any debt, liability or obligation of the Company, (iv) any debt, liability
      or
      obligation of Seller for actions taken prior to that certain merger by and
      between Seller and Microwave Acquisition Corp., a Delaware corporation (the
      “Merger”),
      (v)
      the conduct and operations of the business of the Company whether before or
      after Closing, (vi) claims asserted against the Company whether before or after
      Closing, or (vii) any federal or state income tax payable by Seller and
      attributable to the transaction contemplated by this Agreement or activities
      prior to the Merger.

     

    (b) Third
      Party Claims.

     

    (i) If
      any
      claim or liability (a “Third-Party
      Claim”)
      should
      be asserted against any of the Seller Indemnified Parties (the “Indemnitee”)
      by a
      third party after the Closing for which Buyer has an indemnification obligation
      under the terms of Section 5(a), then the Indemnitee shall notify Buyer (the
      “Indemnitor”)
      within
      20 days after the Third-Party Claim is asserted by a third party (said
      notification being referred to as a “Claim
      Notice”)
      and
      give the Indemnitor a reasonable opportunity to take part in any examination
      of
      the books and records of the Indemnitee relating to such Third-Party Claim
      and
      to assume the defense of such Third-Party Claim and in connection therewith
      and
      to conduct any proceedings or negotiations relating thereto and necessary or
      appropriate to defend the Indemnitee and/or settle the Third-Party Claim. The
      expenses (including reasonable attorneys’ fees) of all negotiations,
      proceedings, contests, lawsuits or settlements with respect to any Third-Party
      Claim shall be borne by the Indemnitor. If the Indemnitor agrees to assume
      the
      defense of any Third-Party Claim in writing within 20 days after the Claim
      Notice of such Third-Party Claim has been delivered, through counsel reasonably
      satisfactory to Indemnitee, then the Indemnitor shall be entitled to control
      the
      conduct of such defense, and any decision to settle such Third-Party Claim,
      and
      shall be responsible for any expenses of the Indemnitee in connection with
      the
      defense of such Third-Party Claim so long as the Indemnitor continues such
      defense until the final resolution of such Third-Party Claim. The Indemnitor
      shall be responsible for paying all settlements made or judgments entered with
      respect to any Third-Party Claim the defense of which has been assumed by the
      Indemnitor. Except as provided on subsection (b) below, both the Indemnitor
      and
      the Indemnitee must approve any settlement of a Third-Party Claim. A failure
      by
      the Indemnitee to timely give the Claim Notice shall not excuse Indemnitor
      from
      any indemnification liability except only to the extent that the Indemnitor
      is
      materially and adversely prejudiced by such failure.

     

    
      
        
        

      

      
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          4
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    (ii) If
      the
      Indemnitor shall not agree to assume the defense of any Third-Party Claim in
      writing within 20 days after the Claim Notice of such Third-Party Claim has
      been
      delivered, or shall fail to continue such defense until the final resolution
      of
      such Third-Party Claim, then the Indemnitee may defend against such Third-Party
      Claim in such manner as it may deem appropriate and the Indemnitee may settle
      such Third-Party Claim, in its sole discretion, on such terms as it may deem
      appropriate. The Indemnitor shall promptly reimburse the Indemnitee for the
      amount of all settlement payments and expenses, legal and otherwise, incurred
      by
      the Indemnitee in connection with the defense or settlement of such Third-Party
      Claim. If no settlement of such Third-Party Claim is made, then the Indemnitor
      shall satisfy any judgment rendered with respect to such Third-Party Claim
      before the Indemnitee is required to do so, and pay all expenses, legal or
      otherwise, incurred by the Indemnitee in the defense against such Third-Party
      Claim.

     

    (c) Non-Third-Party
      Claims.
      Upon
      discovery of any claim for which Buyer has an indemnification obligation under
      the terms of this Section 5 which does not involve a claim by a third party
      against the Indemnitee, the Indemnitee shall give prompt notice to Buyer of
      such
      claim and, in any case, shall give Buyer such notice within 30 days of such
      discovery. A failure by Indemnitee to timely give the foregoing notice to Buyer
      shall not excuse Buyer from any indemnification liability except to the extent
      that Buyer is materially and adversely prejudiced by such failure.

     

    (d) Release.
      Buyer,
      on behalf of itself and its Related Parties, hereby releases and forever
      discharges Seller and its individual, joint or mutual, past and present
      representatives, Affiliates, officers, directors, employees, agents, attorneys,
      stockholders, controlling persons, subsidiaries, successors and assigns
      (individually, a “Releasee”
and
      collectively, “Releasees”)
      from
      any and all claims, demands, proceedings, causes of action, orders, obligations,
      contracts, agreements, debts and liabilities whatsoever, whether known or
      unknown, suspected or unsuspected, both at law and in equity, which Buyer or
      any
      of its Related Parties now have or have ever had against Releasees. Buyer hereby
      irrevocably covenants to refrain from, directly or indirectly, asserting any
      claim or demand, or commencing, instituting or causing to be commenced, any
      proceeding of any kind against any Releasee, based upon any matter released
      hereby. “Related
      Parties”
shall
      mean, with respect to Buyer, (i) any Person that directly or indirectly
      controls, is directly or indirectly controlled by, or is directly or indirectly
      under common control with Buyer, (ii) any Person in which Buyer holds a Material
      Interest or (iii) any Person with respect to which Buyer serves as a general
      partner or a trustee (or in a similar capacity). For purposes of this
      definition, “Material
      Interest”
shall
      mean direct or indirect beneficial ownership (as defined in Rule 13d-3 under
      the
      Securities Exchange Act of 1934, as amended) of voting securities or other
      voting interests representing at least ten percent (10%) of the outstanding
      voting power of a Person or equity securities or other equity interests
      representing at least ten percent (10%) of the outstanding equity securities
      or
      equity interests in a Person.

     

    
      
        
        

      

      
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          5
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    6. Definitions.
      As used
      in this Agreement:

     

    (a) “Affiliate”
means,
      with respect to any Person, any other Person directly or indirectly controlling,
      controlled by or under common control with the first Person. For the purposes
      of
      this definition, “Control,”
when
      used with respect to any Person, means the possession, directly or indirectly,
      of the power to (i) vote 10% or more of the securities having ordinary voting
      power for the election of directors (or comparable positions) of such Person
      or
      (ii) direct or cause the direction of the management and policies of such
      Person, whether through the ownership of voting securities, by contract or
      otherwise, and the terms “Controlling”
and
      “Controlled”
have
      meanings correlative to the foregoing;

     

    (b) “Governmental
      Authority”
means
      any domestic or foreign governmental or regulatory authority;

     

    (c) “Law”
means
      any federal, state or local statute, law, rule, regulation, ordinance, code,
      Permit, license, policy or rule of common law;

     

    (d) “Lien”
means,
      with respect to any property or asset, any mortgage, lien, pledge, charge,
      security interest, encumbrance or other adverse claim of any kind in respect
      of
      such property or asset. For purposes of this Agreement, a Person will be deemed
      to own, subject to a Lien, any property or asset which it has acquired or holds
      subject to the interest of a vendor or lessor under any conditional sale
      agreement, capital lease or other title retention agreement relating to such
      property or asset;

     

    (e) “Order”
means
      any judgment, injunction, judicial or administrative order or
      decree;

     

    (f) “Permit”
means
      any government or regulatory license, authorization, permit, franchise, consent
      or approval; and

     

    (h) “Person”
means
      an individual, corporation, partnership, limited liability company, association,
      trust or other entity or organization, including a government or political
      subdivision or an agency or instrumentality thereof.

     

    7. Miscellaneous.

     

    (a) Counterparts.
      This
      Agreement may be signed in any number of counterparts, each of which will be
      deemed an original but all of which together shall constitute one and the same
      instrument.

     

    
      
        
        

      

      
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          6
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    (b) Amendments
      and Waivers.
      

     

    (i) Any
      provision of this Agreement may be amended or waived if, but only if, such
      amendment or waiver is in writing and is signed, in the case of an amendment,
      by
      each party to this Agreement, or in the case of a waiver, by the party against
      whom the waiver is to be effective.

     

    (ii) No
      failure or delay by any party in exercising any right, power or privilege
      hereunder will operate as a waiver thereof nor will any single or partial
      exercise thereof preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege. The rights and remedies herein provided
      will be cumulative and not exclusive of any rights or remedies provided by
      Law.

     

    (c) Successors
      and Assigns.
      The
      provisions of this Agreement will be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns; provided
      that no
      party may assign, delegate or otherwise transfer (including by operation of
      Law)
      any of its rights or obligations under this Agreement without the consent of
      each other party hereto.

     

    (d) No
      Third Party Beneficiaries.
      This
      Agreement is for the sole benefit of the parties hereto and their permitted
      successors and assigns and nothing herein expressed or implied will give or
      be
      construed to give to any Person, other than the parties hereto, those referenced
      in Section 5 above, and such permitted successors and assigns, any legal or
      equitable rights hereunder.

     

    (e) Governing
      Law.
      This
      Agreement will be governed by, and construed in accordance with, the internal
      substantive law of the State of Delaware.

     

    (f) Headings.
      The
      headings in this Agreement are for convenience of reference only and will not
      control or affect the meaning or construction of any provisions
      hereof.

     

    (g) Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      subject matter of this Agreement. This Agreement supersedes all prior agreements
      and understandings, both oral and written, between the parties with respect
      to
      the subject matter hereof of this Agreement.

     

    (h) Severability.
      If any
      provision of this Agreement or the application of any such provision to any
      Person or circumstance is held invalid, illegal or unenforceable in any respect
      by a court of competent jurisdiction, the remainder of the provisions of this
      Agreement (or the application of such provision in other jurisdictions or to
      Persons or circumstances other than those to which it was held invalid, illegal
      or unenforceable) will in no way be affected, impaired or invalidated, and
      to
      the extent permitted by applicable Law, any such provision will be restricted
      in
      applicability or reformed to the minimum extent required for such provision
      to
      be enforceable. This provision will be interpreted and enforced to give effect
      to the original written intent of the parties prior to the determination of
      such
      invalidity or unenforceability.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
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          7
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    [SIGNATURE
      PAGE TO STOCK PURCHASE AGREEMENT]

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and delivered, effective as of the date first above
      written.

    
      	 	 	 
	 	 
	 	
              MSTI
                HOLDINGS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Frank T. Matarazzo
	 	
              

              Name:
                Frank T. Matarazzo

              
                Title:
                  Chief Executive Officer

              

            
	 	 
	 	
            
	 	
              /s/
                Ron Bell

            
	 	
              

              Ron
                Bell

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