Document:

Unassociated Document

    
      Exhibit
10.1

    

    
      
        
          	
                   

                  

                	
                  HARBIN
      ELECTRIC, INC.

                  A
      US Public Company. Stock Symbol:
HRBN

                

        

      

    

    

                                                            July
14, 2009    

    

    Gentlemen:

    

    Reference is hereby made to (i) the
Purchase Agreement dated August 29, 2006 (the “Purchase Agreement”)
by and among Citadel Equity Fund Ltd., Merrill Lynch International and Harbin
Electric, Inc., a Nevada corporation (the “Company”) and
(ii) the Indenture dated as of August 30, 2006, as supplemented (the “Indenture”) by and
among the Company, the Subsidiary Guarantors named therein and The Bank of New
York Mellon, as trustee (the “Trustee”) with
respect to the Company’s Guaranteed Senior Secured Floating Rate Notes due 2012
and the Company’s Guaranteed Senior Secured Floating Rate Notes due 2010 (the
“2010
Notes”).  Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Purchase Agreement or the
Indenture, as the case may be.

    

    Section 8.02 of the Indenture provides,
among other things, that without the consent of each Holder, an amendment or
waiver may not (with respect to any Notes held by a non-consenting Holder)
reduce the interest or principal of any Note or impair the right of any Holder
to receive payment of principal of, premium, if any, and interest, if any, on
such Holder’s Notes.

    

    Each of the undersigned Holders owns
the aggregate principal amount of the 2010 Notes set forth next to such Holder’s
name on the signature page hereto.

    

    Each of the undersigned Holders hereby
(i) waives each and every applicable provision of the Indenture (including
without limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the
fullest extent necessary to permit the Company to repurchase, at its option, all
(but not part) of the 2010 Notes held by the Holders at any time on or prior to
July 31, 2009 at the Repurchase Price (defined below), (the “Proposed 2010 Note
Repurchase”), (ii) consents to the Proposed 2010 Note Repurchase,
(iii) waives each and every provision of the Indenture (including without
limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the fullest
extent necessary to permit the Company to Incur up to $32 million in Debt (the
“New Debt”) on
or prior to July 30, 2009; provided that the Company shall apply not less than
$6 million of the proceeds of the New Debt for the Proposed 2010 Note Repurchase
(the “Proposed Debt
Incurrence”).

    

    The
“Repurchase
Price” shall be cash equal to 97% of the aggregate principal amount of
the 2010 Notes held by such Holder plus accrued and unpaid interest thereon to
but excluding the Repurchase Date (defined below).

    

    The “Repurchase Date”
shall mean a business day no later than July 31, 2009, on which the Proposed
2010 Note Repurchase is consummated; provided that, if the Proposed Debt
Incurrence is consummated, the Repurchase Date shall be no later than one
business day following the date on which the Proposed Debt Incurrence is
consummated. 

    
      

    

    
      
        
          Main
Office

          No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

          Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

          US
Office

          20
Ramblewood Road, Shoreham, NY 11786

          Tel:
631-312-8612

          www.harbinelectric.com

        

      

      
        
        

        
          

        

      

      
        2

      

       

    

    Except as noted in the preceding
paragraph, the undersigned Holder hereby waives and agrees not to exercise, on
behalf of itself, until August 1, 2009, any and all rights that it may otherwise
have under Section 5A (Right to Future Stock Issuance) of the Purchase
Agreement.

    

    The Company hereby agrees to use its
best efforts to consummate the Proposed 2010 Note Repurchase on or prior to July
31, 2009.

    

    In case
the Proposed 2010 Note Repurchase is not consummated on or prior to July 31,
2009, then the Company will pay, on or before August 2, 2009, each of the
undersigned Holder an amount equal to 2% of the aggregate principal amount of
the 2010 Notes listed next to such name below,
which amount shall be in addition to any and all amounts due under the Indenture
or the 2010 Notes.

    

    Any and
all consents and waivers granted by the undersigned Holder set forth above shall
expire at 5 p.m. New York time on July 31, 2009, and to the extent the Company
is in breach of any provision of the Indenture or the Notes, the undersigned
Holder reserves its rights to take any and all actions permitted under the
Indenture, the 2010 Notes or applicable law. Any and all consents and waivers
granted by such Holder set forth above and to the extent not expired as
specified herein shall be binding on the party hereto and its respective
successors, assigns and transferees.

    

    Except as expressly waived or otherwise
specifically provided herein, all of the terms of each of the 2010 Notes, the
Indenture and the Purchase Agreement shall remain unamended and unwaived and
shall continue to be and shall remain in full force and effect in accordance
with their respective terms.

    

    This letter is governed by the laws of
the State of New York without giving effect to the conflict of laws rules of any
jurisdiction. This letter may be signed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same agreement.  Any signature delivered by a
party via telecopier shall be deemed to be an original signature
hereto.

    

    Kindly acknowledge receipt of this
letter and agreement to the foregoing by executing the enclosed copy of this
letter where indicated and returning it to the Company, whereupon it shall
become a binding agreement among us as of the date hereof.

    

    
       

      
        
          
            	
                     

                  	
                    
                      Very
      truly yours,

                      

                      Harbin
      Electric, Inc.

                      

                      

                      

                      By:_______________________________

                      Name:  Tianfu
      Yang

                      Title:  Chairman
      & CEO

                    

                  

          

        

        
          
            

          

        

      

    

    
      
        
          
            Main Office

            No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

            Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

            US Office

            20
Ramblewood Road, Shoreham, NY 11786

            Tel:
631-312-8612

            www.harbinelectric.com

          

        

        
          
          

          
            

          

        

        
          3

        

      

    

    

    AGREED
AND ACKNOWLEDGED:

    

    Merrill
Lynch International

    

    By:________________________________

    Name:

    Title:

    Aggregate
Principal Amount of 2010 Notes Owned and For Which Waiver and Consent are
Given:$ 3 million

    

    

    ABN AMRO
Bank N.V., London Branch

    

    By:________________________________

    Name:

    Title:

    Aggregate
Principal Amount of 2010 Notes Owned and For Which Waiver and Consent are
Given:$ 3 million

    
      
        

      

      
        
          
            Main Office

            No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

            Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

            US Office

            20
Ramblewood Road, Shoreham, NY 11786

            Tel:
631-312-8612

            www.harbinelectric.comUnassociated Document

    
      
        Exhibit
10.2

      

      
        
          
            	
                     

                    

                  	
                    HARBIN
      ELECTRIC, INC.

                    A
      US Public Company. Stock Symbol:
HRBN

                  

          

        

      

      

                                                              July
14, 2009

      

    

    Gentlemen:

    

    Reference is hereby made to (i) the
Purchase Agreement dated August 29, 2006 (the “Purchase Agreement”) by and
among Citadel Equity Fund Ltd (“Citadel”)., Merrill
Lynch International (“Merrill”) and Harbin
Electric, Inc., a Nevada corporation (the “Company”);
(ii) the Indenture dated as of August 30, 2006, as supplemented (the “Indenture”) by and
among the Company, the Subsidiary Guarantors named therein and The Bank of New
York, as trustee (the “Trustee”) with respect to the Company’s Guaranteed Senior
Secured Floating Rate Notes due 2012 (the “2012 Notes”) and the
Company’s Guaranteed Senior Secured Floating Rate Notes due 2010 (the “2010 Notes”); and
(iii) the Shares Pledge Agreement dated as of August 30, 2006 (the “Pledge Agreement”) by
and among the Company and the Trustee, in its capacity as collateral
agent.  Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Purchase Agreement, the Indenture or
the Pledge Agreement, in each case, as indicated below.

    

    Section 8.02 of the Indenture provides,
among other things, that (i) except for certain amendments or waivers specified
in Section 8.02 as being amendments or waivers that may not be implemented
without the consent of each Holder whose Notes are to be affected, the Company
and the Trustee may amend or supplement the Indenture, the Security Documents
and the Notes, as to a single maturity or as to all of the Notes, with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding to be affected thereby voting as a single class or waive
compliance with any provision of the Indenture or such Notes with the consent of
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding to be affected thereby voting as a single class and (ii) without the
consent of each Holder, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder) reduce the interest or principal of any
Note or impair the right of any Holder to receive payment of principal of,
premium, if any, and interest, if any, on such Holder’s Notes

     

    Section 8 of the Pledge Agreement
provides that no consent shall be given or action taken, which would have the
effect of impairing the position or interest of any Secured Party in respect of
the Pledged Collateral (unless and to the extent expressly permitted by the
Indenture).

    

    Each of the undersigned Holders owns
the aggregate principal amount of the 2010 Notes or the 2012 Notes, as
applicable, set forth next to such Holder’s name on the signature page
hereto.

    

    Each of the undersigned Holders hereby
(i) waives each and every applicable provision of the Indenture (including
without limitation Article 3 (except for Section 3.08 Mandatory Redemption) and
Sections 4.09, 4.10 and 4.11 thereof) to the fullest extent necessary solely to
permit the Company or an Affiliate of the Company to purchase or repurchase, at
its option, all (but not part) of the 2012 Notes held by Citadel at any time at
the Citadel Repurchase Price (defined below) (the “Proposed 2012 Note
Repurchase”) and to repurchase, at its option all (but not part) of the
2010 Notes at any time at the Merrill Repurchase Price (defined below), (the
“Proposed 2010 Note
Repurchase”), (ii) consents to the Proposed 2012 Note Repurchase and
the Proposed 2010 Note Repurchase, (iii) waives each and every provision of the
Indenture (including without limitation Article 3 (except for Section 3.08
Mandatory Redemption) and Sections 4.09, 4.10 and 4.11 thereof) and waives each
and every provision of the Pledge Agreement (including without limitation
Section 8 thereof) to the fullest extent necessary solely to permit the Company
or an Affiliate of the Company to Incur up to $50 million in Debt (the “New Debt”); provided
that the Company shall use up to $32 million of the proceeds of such New Debt
for the Proposed 2012 Note Repurchase and the Proposed 2010 Note Repurchase (the
“First Proposed Debt
Incurrence”), (iv) consents to the First Proposed Debt Incurrence, (v)
subsequent to the consummation of the Proposed 2012 Note Repurchase and the
Proposed 2010 Note Repurchase, waives each and every applicable provision of the
Indenture (including without limitation Article 3 (except for Section 3.08
Mandatory Redemption) and Sections 4.09, 4.10 and 4.11 thereof) to the fullest
extent necessary solely to permit the Company or an Affiliate of the Company to
purchase or repurchase, at its option, all (but not part) of the remaining
outstanding 2012 Notes (the “Additional 2012 Note
Repurchase”), (vi) consents to the Additional 2012 Note Repurchase,
(vii) subsequent to the consummation of the First Proposed Debt Incurrence,
waives each and every provision of the Indenture (including without limitation
Article 3 (except for Section 3.08 Mandatory Redemption) and Sections 4.09, 4.10
and 4.11 thereof) and waives each and every provision of the Pledge Agreement
(including without limitation Section 8 thereof) to the fullest extent necessary
solely to permit the Company or an Affiliate of the Company to Incur up to $60
million in Debt (the “Refinancing Debt”);
provided that the Company shall use up to $32 million of the proceeds of such
Refinancing Debt for the repayment of the New Debt incurred in the First
Proposed Debt Incurrence and up to $8 million of the proceeds of such
Refinancing Debt for the Additional 2012 Note Repurchase (the “Second Proposed Debt
Incurrence”) and (vi) consents to the Second Proposed Debt
Incurrence.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    The
“Citadel Repurchase Price” shall, in the sole discretion of Citadel, be either
(a) cash equal to 85% of the aggregate principal amount of the 2012 Notes held
by Citadel plus accrued and unpaid interest thereon to but excluding the
Repurchase Date (defined below) or (b) the sum of (x) any securities being
issued in the Proposed Debt Incurrence in an aggregate principal amount at par
up to 50% of the principal amount of the 2012 Notes held by Citadel and (y) cash
equal to 85% of the aggregate remaining principal amount of the 2012 Notes held
by Citadel plus any accrued and unpaid interest thereon to but excluding the
Repurchase Date.  The Merrill Repurchase Price shall be cash equal to
97% of the aggregate principal amount of the 2010 Notes plus accrued and unpaid
interest thereon to but excluding the Repurchase Date.

    

    The “Repurchase Date” shall mean a
business day on which the Proposed 2012 Note Repurchase and the Proposed 2010
Note Repurchase are consummated; provided that, if the First Proposed Debt
Incurrence is consummated, the Repurchase Date shall be no later than one
business day following the date on which the First Proposed Debt Incurrence is
consummated. If the Proposed 2012 Note Repurchase and the Proposed 2010 Note
Repurchase are not completed by August 31, 2009 then any and all waivers granted
by the Noteholders set forth herein shall expire on the close of business (Hong
Kong) on August 31, 2009.

    

    In the event that the Proposed 2012
Note Repurchase and the Proposed 2010 Note Repurchase are completed by August
31, 2009, each of the undersigned Holders hereby waives and agrees not to
exercise, on behalf of itself, any and all rights that it may otherwise have
under Section 5A (Right to Future Stock Issuance) of the Purchase Agreement,
from the date of this letter up to and including the close of business (Hong
Kong) on December 31, 2009.

    

    Any and
all waivers granted by the Noteholders set forth herein shall expire on the
close of business (Hong Kong) on December 31, 2009 and to the extent the Company
is in breach of any provision of the Indenture or the Notes after such date, the
Noteholders reserve their rights to take any and all actions allowable under the
Indenture, the Notes or according to law.

    
      
        

      

      
        
          
            
              
                
                  	
                           

                        	
                          Main
      Office

                        	
                          2

                        

                

                
                  
                    
                      No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

                      Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

                      US
Office

                      20
Ramblewood Road, Shoreham, NY 11786

                      Tel:
631-312-8612

                      www.harbinelectric.com

                    

                  

                  
                     

                    
                      

                    

                  

                  
                     

                  

                

              

            

          

        

      

      
         

        Except as expressly waived or otherwise
specifically provided herein, all of the terms of each of the 2010 Notes, 2012
Notes, the Indenture, the Purchase Agreement and the Pledge Agreement shall
remain unamended and unwaived and shall continue to be and shall remain in full
force and effect in accordance with their respective terms.

      

    

    

    This letter is governed by the laws of
the State of New York without giving effect to the conflict of laws rules of any
jurisdiction. This letter may be signed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same agreement.  Any signature delivered by a
party via telecopier shall be deemed to be an original signature
hereto.

    

    Kindly acknowledge receipt of this
letter and agreement to the foregoing by executing the enclosed copy of this
letter where indicated and returning it to the Company, whereupon it shall
become a binding agreement among us as of the date hereof.

      
        
          

        

        
          
            
              
                
                  
                    	
                             

                          	
                            Main
      Office

                          	
                            3

                          

                  

                  
                    
                      
                        No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

                        Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

                        US
Office

                        20
Ramblewood Road, Shoreham, NY 11786

                        Tel:
631-312-8612

                        www.harbinelectric.com

                      

                    

                    
                       

                      
                        

                      

                    

                    
                       

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            	
                     

                  	
                    
                      Very
      truly yours,

                      

                      Harbin
      Electric, Inc.

                      

                      

                      By:
      ______________________________

                      Name:
      

                      Title:

                    

                  

          

        

        
           

      

    

     

    

    

    AGREED
AND ACKNOWLEDGED:

    

    Abax Jade
Ltd.

    

    

    By:________________________________

    Name:
Donald Yang

    Title:
President

    Aggregate
Principal Amount of 2012 Notes Owned and For Which Waiver and Consent are
Given:$ 2.525 million

    

    

    

    Abax Nai
Xin A Ltd.

    

    

    By:________________________________

    Name:
Donald Yang

    Title:
President

    Aggregate
Principal Amount of 2012 Notes Owned and For Which Waiver and Consent are
Given:$ 8.975 million

      
        
          

        

        
          
            
              
                
                  
                    	
                             

                          	
                            Main
      Office

                          	
                            4

                          

                  

                  
                    
                      
                        No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China
150060

                        Tel:
86-451-8611-6757                                             Fax:
86-451-8611-6769

                        US
Office

                        20
Ramblewood Road, Shoreham, NY 11786

                        Tel:
631-312-8612

                        www.harbinelectric.com

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