Shares Aquisition Agreement


     

    Exhibit
      10.3


    


    


     

    


    


    


    SHARES
      ACQUISITION AGREEMENT

    (the
      “AGREEMENT” ) OF

    SHANGHAI
      E & T SYSTEM COMPANY LIMITED

    (                           
      )

    


     

    
 

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    


     

    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. 

    


    


    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    


    


    
      	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.

     

    


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    


    
      	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.

            


    

     

    


     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
      	
              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”).

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    


    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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        8-