Exhibit 10.3

 

SHARES ACQUISITION AGREEMENT
(the “AGREEMENT” ) OF
SHANGHAI E & T SYSTEM COMPANY LIMITED
(                            )

 

 
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TABLE OF CONTENTS
 

Contents
Page
   
1             Agreement
3
   
2             Shares Acquisition
3
   
3             Payment of consideration to the Existing Shareholders
4
   
4             Completion
4
   
5             Disclosure
4
   
6             Announcements
4
   
7             Severability
5
   
8             General
5
   
9             Whole agreement
6
   
10           Governing laws
6
   
Schedule 1 The Existing Shareholders (Transferor)
7

 
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1.
THIS AGREEMENT is made on 6th August 2006

 
 
BETWEEN:
 
(1)
Duckworth Investments Limited, (“Duckworth”) a company incorporated in the
British Virgin Islands (“the Transferor”); and

 
(2)
COMTECH (CHINA) HOLDING LTD., (“Comtech China”), a company incorporated in the
British Virgin Islands (the “Transferee”).

 
 
 
WHEREAS:
 

(A)
SHANGHAI E & T SYSTEM COMPANY LIMITED (“                   ”) (“The Company”) is
a company limited by shares and incorporated in the People’s Republic of China .

 

(B)
The Transferee intends to acquire totally 40% of the Company’s shares from the
Duckworth named in Schedule 1 in an aggregate sum of RMB16,000,000.

 

(C)
The Transferee and the Transferor have agreed to enter into this Agreement for
the purposes of recording the terms and conditions on which the Transferee will
purchase totally 40% of the Company’s shares from the Duckworth.

 

2
Shares Acquisition

Pursuant to this Agreement, Comtech China have agreed to acquire and 潋椉 and 孙瀻
(collectively the “Transferor”) who are the shareholders of the Duckworth named
in Schedule 1 have agreed to dispose the shares interest in the Company,
representing 40% equity interest in [“                        ”] for a
consideration of totally RMB16,000,000 satisfy by cash.

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3
Payment of Consideration to the Existing Shareholders

 

3.1
Comtech China will pay RMB8,000,000 purchase consideration to each “Transferor”
respectively (totally RMB16,000,000) on the following manner:-

 
(A) Payment of RMB5,000,000 to each transferor (totally RMB10,000,000) within 1
month from the day on which the Agreement was signed on the condition of
completion of this agreement. ;
 
(B) Payment of RMB3,000,000 to each transferor (totally RMB6,000,000) no later
than 18 months from the day on which the Agreement was signed on the condition
of completion of this agreement.

4
Completion

The Agreement will be completed upon completion of the registration procedures
to validate the transfer of shares from transferor to transferee in accordance
with rules and regulation of the Peoples’s Republic of China.

5
Disclosure

The Existing Shareholders acknowledge that all facts relating to the Company
businesses that could reasonably be expected to or would have any material
adverse effect on such Company businesses have been fully disclosed to Comtech
China or to their legal counsel in the course of the negotiations leading to
this Agreement was given and is now complete, true and accurate, taken as a
whole, in all material respects and not misleading in any material respect.

 

6
Announcements

 
No party shall make or permit any person connected with it to make any
announcement concerning this Agreement or any ancillary matter except as
required by law or any competent regulatory body or with the prior written
approval of the other parties, such approval not to be unreasonably withheld or
delayed.
 

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7
Severability

The provisions contained in each clause and sub-clause of this Agreement shall
be enforceable independently of each of the others and its validity shall not be
affected if any of the others is invalid. If any of those provisions is void but
would be valid if some parts of the provision were deleted, the provision in
question shall apply with such modification as may be necessary to make it
valid.
 

8
General

 

8.1
Save as provided otherwise in this Agreement, none of the rights or obligations
under this Agreement may be assigned or transferred without the prior written
consent of Comtech China.

 

8.2
This Agreement may be executed in any number of counterparts, all of which
together shall constitute one and the same agreement, and any party may enter
into this Agreement by executing a counterpart.

 

8.3
The Existing Shareholders agree, as between themselves, that they shall procure
the convening of all meetings and the giving of all waivers and consents and the
passing of all resolutions and shall otherwise exercise all powers and rights
available to them in order to give effect to the provisions of this Agreement.

 

8.4
The Existing Shareholders agree, as between themselves, that if any provisions
of the memorandum and/or articles of association or incorporation or by-laws of
the Company at any time conflict with any provisions of this Agreement, the
provisions of this Agreement shall prevail and the existing shareholders shall
exercise all powers and rights available to them to procure the amendment of
such memorandum and/or articles of association or by-laws to the extent
necessary to permit the Company and its affairs to be regulated as provided in
this Agreement.

 

8.5
The Existing Shareholders represent that they are the beneficial and legal owner
of the 40% share capital of the Company and their ownership in the Company are
free and clear of any lien, charge or encumbrance whatsoever.

 

8.6
Save as provided otherwise, where any obligation, representation, warranty or
undertaking in this Agreement is expressed to be made, undertaken or given by
two or more persons, such person shall be jointly and severally responsible in
respect of it.

 

 
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9
Whole Agreement

9.1
This Agreement constitutes the full and entire understanding and agreement among
the parties with regard to the subjects hereof and thereof. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Comtech China, provided,
however, that any party may waive any of such party’s respective rights
hereunder without obtaining the consent of any other party.

9.2
Each of the parties acknowledges that, in agreeing to enter into this Agreement,
it has not relied on any representation, warranty, collateral contract or other
assurance (except those set out in this Agreement and the documents referred to
in it) made by or on behalf of any other party before the signature of this
Agreement. Each of the parties waives all rights and remedies which, but for
this Sub-clause 9.2, might otherwise be available to it in respect of any such
representation, warranty, collateral contract or other assurance, provided that
nothing in this Sub-clause 9.2 shall limit or exclude any liability for fraud.

10
Governing Law

 
This Agreement shall be governed by and construed under the laws of the Hong
Kong Special Administrative Region of the People’s Republic of China (“Hong
Kong”).
 
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Schedule 1 
 
Duckworth Investments Limited (Transferor)
 

     
Shareholders Name
Paid Up Capital (USD)
Shareholding %
     
[             ]
1
50.00
[             ]
1
50.00
             
2
100.0
     

 
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This Agreement was signed by the parties on the date first written above.
 

 
SIGNED by
)
for and on behalf of
)
COMTECH (CHINA) HOLDING LTD.
) /s/ Jeffrey Kang
in the presence of:
     

 
SIGNED by [          ]
)
for and on behalf of
)
Duckworth Investments Limited 
) /s/ Shao, Lei 
in the presence of:
     

 
SIGNED by [             ]
)
for and on behalf of
)
Duckworth Investments Limited 
)/s/ Sun, Xun 
in the presence of:
     

 
 
 
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