Exhibit 10.3
EQUITY TRANSFER
AGREEMENT
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ANHUI
JIANGHUAI MODINE CLIMATE CONTROL CO., LTD.
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MODINE
MANUFACTURING COMPANY
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SONGZ
AUTOMOBILE AIR CONDITIONING CO., LTD.
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MAY 27, 2009
This Agreement
is signed by the following parties in Shanghai on the 27
th day of May 2009:
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ANHUI
JIANGHUAI MODINE CLIMATE CONTROL CO., LTD. , a company duly incorporated and validly existing
under the laws of the People’s Republic of China (“
PRC ”), having its legal address at Shixin Road, Hefei
Economic & Technological Development Area, Hefei 230601, Anhui,
PRC (the “ Company ”);
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MODINE
MANUFACTURING COMPANY , a company duly incorporated and validly existing
under the laws of the State of Wisconsin, USA, having its principal
place of business at 1500 DeKoven Avenue, Racine, Wisconsin 53403
USA (the “ Transferor ”); and
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SONGZ
AUTOMOBILE AIR CONDITIONING CO., LTD. , a company duly incorporated and validly
existing under the laws of the PRC, having its legal address at No.
4999 Huaning Road, South Industrial Park, Xinzhuang, Minhang
District, Shanghai 201108, PRC (the “ Transferee
”).
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The Transferor,
the Transferee and the Company are individually referred to as a
“ Party ” and collectively as the “
Parties ”.
WHEREAS:
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The Company is
a Sino-foreign equity joint venture duly incorporated and validly
existing under the laws of the PRC. The registered
capital of the Company is United States Dollars two million eight
hundred thousand (US$2,800,000).
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The Transferor
is the foreign shareholder of the Company, having a 50%
shareholding in the Company, and has fully paid up its capital
contribution.
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The Transferor
intends to transfer to the Transferee and the Transferee intends to
acquire a 25% shareholding in the Company from the
Transferor.
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The Transferor
also intends to sign an equity transfer agreement on or around the
date of this Agreement with each of Chan King Hai and the Company
regarding the transfer of an additional 25% shareholding in the
Company by the Transferor to Chan King Hai.
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Accordingly,
the Parties have agreed on the transfer of shares to the Transferee
and the other matters set out herein in accordance with the terms
and conditions of this Agreement.
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DEFINITIONS
AND INTERPRETATION
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Unless the
terms or context of this Agreement otherwise provide, the following
terms shall have the meanings set out below:
“
Agreement ” shall mean this Equity Transfer
Agreement, the attachments and schedules hereto (if any), as the
same may be amended, supplemented or modified from time to time in
accordance with clause 10(f) .
“
Ancillary Agreements ” shall mean:
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the Equity
Transfer Agreement to be signed by the Transferor, the Company and
Chan King Hai on or around the date of this Agreement regarding the
transfer of a 25% shareholding in the Company by the Transferor to
Chan King Hai; and
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the Release and
Discharge to be signed by the Transferor, the Company, JAC and MK
which provides for mutual releases and discharges and which
terminates the following technology license and related agreements,
each of which was entered into between MK and the
Company:
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Technical
Assistance Agreement dated September 1, 2004 regarding air
conditioning and heating systems for new SUV model S504;
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Technical
Assistance Agreement dated July 19, 2005 regarding air conditioning
and heating systems for passenger vehicle model C926;
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Technology
License Agreement – Air Conditioning and Heating System for
Truck – dated November 28, 2005 regarding air conditioning
systems and components for heavy duty truck;
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General Terms
and Conditions of the Contract dated July 31, 2007, setting forth
general conditions governing future technology license or technical
assistance agreements between the two parties;
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Amendment to
Technical License and Assistance Agreement of Vehicle Model
“Starex” dated February 27, 2007 by which the term of
the original “Starex” agreement was extended;
and
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Special
Conditions to General Terms and Conditions (Vehicle
Model: A-108, BMPH, H-1 of Generation 4) dated July 31,
2007 regarding the following vehicle models: A-108
A/Con; BMPH A/Con and H-1 (Generation 4) A/Con.
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“
Approval Authority ” shall mean the Ministry of
Commerce of the PRC or its local counterparts (i.e. the approving
authority of this Agreement).
“
Arbitration Committee ” shall mean China
International Economic and Trade Arbitration Commission, Shanghai
Branch.
“
Business Day ” shall mean a day other than
Saturday, Sunday or any day on which banks located in China are
authorized or obligated to close.
“
Chan King Hai ” shall mean a natural person
(home visiting permit number: H0625145200, a Hong Kong Chinese
national), having Block C, 1/F, 6-10 Hau Wong Road, Kowloon, Hong
Kong SAR, China, as his residential address.
“
China ” or “ PRC ”
shall mean the People's Republic of China, excluding the Hong Kong
Special Administrative Region, Macao Special Administrative Region
and Taiwan, for purposes of this Agreement.
“
Completion ” shall have the meaning given to
such term in clause 5 .
“
Completion Date ” shall mean (i) the first
Business Day after the day on which the Company receives the New
Business License and the Transferee receives the approval by SAFE
approving the payment of the Purchase Price, or (ii) such other
date as the Transferor and Transferee shall agree in
writing.
“
Effective Date ” shall mean the date on which
this Agreement becomes effective pursuant to clause 4(a)
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“
Equity Transferred ” shall mean 25% of the
Company’s shares.
“
Escrow Account ” shall mean an account that is
established by the Transferee and is controlled jointly by the
Transferor and Transferee in accordance with the Escrow
Agreement.
“
Escrow Agent ” shall mean JPMorgan Chase Bank
(China) Company Limited.
“
Escrow Agreement ” shall mean the escrow
agreement signed by the Transferor, the Transferee and the Escrow
Agent on May, 2009 regarding the management and payment of the
Purchase Price.
“
JAC ” shall mean Hefei Jianghuai Automotive
Company Ltd., a company incorporated and validly existing under the
Laws of China, having its principal place of business at 176
Dongliu Road, Hefei 230022, China.
“
Law ” shall mean all laws, statutes, rules,
regulations, ordinances, orders and other pronouncements having the
effect of law in China and any foreign country or any domestic or
foreign province, county, city or other political subdivision or of
any governmental or regulatory authority, other than any non-public
or internal policy, rule, order, guidance or administrative
practice of, or applied by, any governmental or regulatory
authorities except to the extent that any such non-public or
internal policy, rule, order, guidance or administrative practice
is actually known to any relevant person.
“
MK ” shall mean Modine Korea LLC, a direct
subsidiary of Transferor organized and existing under the laws of
the Republic of Korea, having its principal place of business at
121 MaeGok-Li, Tangjung-Myun, Asan City, Chungcheong-nam-do,
Korea.
“
New Articles ” shall mean the new articles of
association of the Company dated as of the date hereof and signed
by the Transferee, JAC and Chan King Hai, which will become
effective upon approval by the relevant Approval
Authority.
“
New Business License ” shall mean the new
business license to be issued by the Registration Authority to the
Company registering the transfer of Equity Transferred.
“
New Certificate of Approval ” shall mean the
new approval certificate issued by the Approval Authority approving
the transfer of the Equity Transferred.
“
New JV Contract ” shall mean the sino-foreign
joint venture agreement dated as of the date hereof and signed by
the Transferee, JAC and Chan King Hai regarding their joint venture
arrangement in the Company.
“
Purchase Price ” shall mean the purchase price
to be paid by the Transferee to the Transferor according to
clause 3(a) .
“
Renminbi ” or “ RMB ”
shall mean the lawful currency of China.
“
Registration Authority ” shall mean the State
Administration of Industry and Commerce of the PRC or its local
counterpart, which is the company registration authority in
China.
“
SAFE ” shall mean the State Administration of
Foreign Exchange of the PRC or its local counterpart.
“
Transaction Documents ” shall mean each or all
of this Agreement, the New Articles, the New JV Contract and the
Ancillary Agreements (and all relevant ancillary documents required
or necessary for the consummation of the transactions contemplated
herein and therein).
“
United States Dollars ” or “
USD ” shall mean the lawful currency of the
United States of America.
All references
to sections, schedules and exhibits are to sections, schedules and
exhibits in or to this Agreement unless otherwise specified. The
words "hereof," "herein," and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provisions of this
Agreement. The singular terms include the plural and the
plural terms include the singular. The headings used in
this Agreement have been inserted for convenience of reference only
and do not define or limit the provisions hereof.
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The Transferor
hereby transfers to the Transferee and the Transferee hereby
purchases from the Transferor the Equity Transferred.
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The Company
undertakes and guarantees that, upon the signing of this Agreement
and the fulfilment by the Transferee of its payment obligation
under clause 3(b) , it shall forthwith apply to the Approval
Authority for approval on the transfer of Equity Transferred in
accordance with the relevant Laws. The Company further
undertakes and guarantees that, upon the approval of the transfer
of Equity Transferred by the Approval Authority, it shall register
the transfer of Equity Transferred with the Registration Authority
on a timely basis in accordance with the relevant Laws.
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This Agreement
shall be effective on the Effective Date. The Transferee
shall bear the responsibilities as a shareholder under the New
Articles and the New JV Contract on the Effective Date.
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PURCHASE
PRICE AND PAYMENT
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The Parties
agree that the Purchase Price is Renminbi eighteen million
(RMB18,000,000).
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The Purchase
Price shall be due and payable on the date of this
Agreement. The Transferee shall pay the Purchase Price
to the Escrow Account on the date of this Agreement and provide the
relevant proof of payment to the Transferor after making such
payment. If payment is overdue, the Transferee shall pay
to the Escrow Account interest on the overdue amount, at the base
lending rate of the People’s Bank of China on the due date,
accruing from the due date until the date on which such payment is
made.
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If any taxes,
fees or other charges (including, but not limited to, withholding
income tax) are levied on the Purchase Price in China then the
Transferor shall be solely responsible for bearing such taxes, fees
or charges. The Transferee shall be entitled to withhold
such taxes from the Purchase Price if r
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