Document:

EXHIBIT 4.4

================================================================================

                      EQUITY REGISTRATION RIGHTS AGREEMENT

                           DATED AS OF AUGUST 30, 2006

                                 BY AND BETWEEN

                              HARBIN ELECTRIC, INC.

                                       AND

                            CITADEL EQUITY FUND LTD.

                                       AND

                           MERRILL LYNCH INTERNATIONAL

================================================================================

<PAGE>

      This Equity Registration Rights Agreement (the "Agreement") is made and
entered into as of August 30, 2006, by and between (i) Harbin Electric Inc., a
Nevada corporation (the "Company"), (ii) Citadel Equity Fund Ltd. ("Citadel")
and (iii) Merrill Lynch International ("ML" and collectively, with Citadel, the
"Purchasers").

                                    RECITALS

      WHEREAS, this Agreement is made pursuant to the Purchase Agreement, dated
as of August 29, 2006, by and among the Company, the Subsidiary Guarantor and
each of the Purchasers (each a, "Purchase Agreement" and collectively, the
"Purchase Agreements").

      WHEREAS, Citadel has agreed to purchase an aggregate of 38,000 Units, each
consisting of $1,000 in aggregate principal amount of a Guaranteed Senior
Secured Floating Rate Notes due 2012 (the "2012 Notes") of the Company and a
proportionate share of the six-year warrants to purchase 525,830 shares of the
Company's Common Stock at an exercise price of $10.84 per share and a
proportionate share of the six-year warrants to purchase 2,192,308 shares of the
Company's Common Stock at an exercise price of $7.80 per share, pursuant to the
Purchase Agreement.

      WHEREAS, ML has agreed to purchase an aggregate of 12,000 Units, each
consisting of $1,000 in aggregate principal amount of a Guaranteed Senior
Secured Floating Rate Notes due 2010 (the "2010 Notes" and together with the
2012 Notes, the "Notes") of the Company and a proportionate share of the
three-year warrants to purchase 769,230 shares of the Company's Common Stock at
an exercise price of $7.80 per share, pursuant to the Purchase Agreement.

      WHEREAS, to induce the Purchasers to purchase the Units pursuant to the
Purchase Agreements, the Company has agreed to provide the registration rights
set forth in this Agreement.

      WHEREAS, the execution and delivery of this Agreement is a condition to
the obligations of the Purchasers set forth in Section 3 of the Purchase
Agreements. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Purchase Agreements.

                                    AGREEMENT

      The parties hereby agree as follows:

SECTION 1. DEFINITIONS.

      As used in this Agreement, the following capitalized terms shall have the
following meanings:

      "2010 Notes": As defined in the Recitals.

      "2012 Notes": As defined in the Recitals.

<PAGE>

      "Affiliate": As defined in Rule 144 of the Securities Act.

      "Closing Date": The date hereof.

      "Common Stock": The common stock, par value $.00001 per share, of the
Company.

      "Company": As defined in the Preamble.

      "Exchange Act": The Securities Exchange Act of 1934, as amended.

      "Holder": Any Person who holds Warrants or Registrable Securities. A
Person is deemed to be a Holder whenever such Person owns Warrants or
Registrable Securities or has the right to acquire such Registrable Securities
by exercising Warrants held by such Person, whether or not such acquisition has
actually been effected.

      "Indemnified Party": As defined in Section 7 hereof.

      "Inspectors": As defined in Section 3 hereof.

      "Liquidated Damages Cap": As defined in Section 4 hereof.

      "Liquidated Damages Period": As defined in Section 4 hereof.

      "Notes": As defined in the Recitals.

      "Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.

      "Prospectus": The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as supplemented by any
prospectus supplement, and all material incorporated by reference into such
prospectus.

      "Purchase Agreements": As defined in the Recitals.

      "Purchaser": As defined in the Recitals.

      "Recommencement Date": As defined in Section 5 hereof.

      "Registrable Securities": At any time, any of (i) the Warrant Shares
(whether or not the related Warrants have been exercised) and (ii) any other
securities issued or issuable with respect to any Warrant Shares by way of stock
dividends or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (a) a Registration Statement with respect to the
offering of such securities by the Holder thereof shall have been declared
effective under the Securities Act and such securities shall have been disposed
of by such Holder pursuant to such Registration Statement, (b) such securities
have been sold to the public pursuant to Rule 144(k) (or any similar provisions
then in force, but not Rule 144A) promulgated under the Securities Act, (c) such
securities may be sold without restriction under Rule 144(k)(or successor rule),
(d) such securities shall have been otherwise transferred by the Holder thereof
and new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company or its transfer agent
and subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(e) such securities shall have ceased to be outstanding.

                                       2

<PAGE>

      "Registration Default": As defined in Section 4 hereof.

      "Registration Statement": Any registration statement of the Company
relating to the registration for resale of Registrable Securities that is filed
pursuant to the provisions of this Agreement, including the Prospectus included
therein, all amendments thereto (including post-effective amendments) and all
exhibits and all material incorporated by reference therein.

      "SEC": The Securities and Exchange Commission.

      "Securities Act": The Securities Act of 1933, as amended.

      "Shelf Registration": As defined in Section 2 hereof.

      "Suspension Notice": As defined in Section 5 hereof.

      "Warrant Agreement": The Warrant Agreement dated the Closing Date by and
between the Company and The Bank of New York, as Warrant Agent.

      "Warrant Shares": The Common Stock or other securities that any Holder may
acquire upon exercise of a Warrant, together with any other securities which
such Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split or combination of such Common Stock as provided for in the Warrant
Agreement.

      "Warrants": The warrants of the Company issued and sold pursuant to the
Purchase Agreements and the Warrant Agreement, together with any warrants issued
in substitution or replacement therefor.

SECTION 2. FILING OF REGISTRATION STATEMENT.

      (a) As soon as reasonably practicable after the Closing Date, the Company
shall prepare and cause to be filed with the SEC pursuant to Rule 415 under the
Securities Act a Registration Statement on the appropriate form relating to
resales of all Registrable Securities (the "Shelf Registration"). The Company
shall use its reasonable best efforts to cause any such Registration Statement
to be declared effective by the SEC as soon as reasonably practicable and no
later than March 30, 2007.

      To the extent necessary to ensure that the Registration Statement is
available for sales of Registrable Securities by the Holders thereof entitled to
the benefit of this Section 2(a), the Company shall use its reasonable best
efforts to keep any Registration Statement required by this Section 2(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 2(a) hereof and in conformity with the
requirements of this Agreement, the Securities Act and the rules and regulations
of the SEC promulgated thereunder from time to time (including (A) preparing and
filing with the SEC such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep such Registration Statement
effective; (B) cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and complying fully with Rules 424, 430A and 462, as
applicable, under the Securities Act in a timely manner; and (C) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement), until the date when all
Registrable Securities covered by the Registration Statement (i) have been sold
pursuant thereto or (ii) may be sold without volume restrictions pursuant to
Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders.

                                       3

<PAGE>

      (b) No Holder may include any of its Registrable Securities in any
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes in writing to the Company within 10 business days of a request
therefore, such information as is requested by the Company regarding such
Holder, the Registrable Securities held by such Holder and the intended method
of disposition of the Registrable Securities held by such Holder, as shall be
reasonably required (but in no event shall such information provided be less
than the information required by Regulation S-K and other applicable SEC rules,
regulations and interpretations) to effect the registration of such Registrable
Securities. Each selling Holder agrees to promptly furnish (but in no event more
than 5 business days following the Company's request) additional information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading. The Company shall not
have any obligation to include in a Registration Statement Registrable
Securities held by a Holder that does not furnish the information requested by
the Company pursuant to this Section 2(b).

      (c) The Company shall be deemed not to have used its commercially
reasonable efforts to keep the Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders
of Registrable Securities covered thereby not being able to offer and sell such
Registrable Securities during that period, unless such action is required by
applicable law or this Agreement.

SECTION 3. REGISTRATION PROCEDURES.

      In connection with the Shelf Registration, the following provisions shall
apply:

      (a) The Company shall (i) furnish to the Holders, prior to the filing
thereof with the SEC, an electronic copy of the Registration Statement and each
amendment thereof (and if a Holder so requests in writing, and electronic copies
of all such documents incorporated therein by reference) and each supplement, if
any, to the Prospectus, which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period of at
least five business days, and the Company will not file any such Registration
Statement or related Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus to which such Holders shall reasonably
object within two business days after the receipt thereof; and (ii) include the
names of the Holders who propose to sell Registrable Securities pursuant to the
Registration Statement as selling securityholders. A Holder's objection shall be
deemed to be a reasonable objection to such filing if such Registration
Statement, amendment, related Prospectus or supplement, as applicable, as
proposed to be filed, contains an untrue statement of a material fact or omits
to state any material fact necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were made) not
misleading or fails to comply with the applicable requirements of the Securities
Act.

                                       4

<PAGE>

      (b) The Company shall give written notice to the Holders:

         (i) when the Registration Statement or any amendment thereto has been
filed with the SEC and when the Registration Statement or any post-effective
amendment thereto has become effective;

         (ii) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional information;

         (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose;

         (iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and

         (v) of the happening of any event that requires the Company to make
changes in the Registration Statement or the Prospectus in order that the
Registration Statement or the Prospectus does not contain an untrue statement of
a material fact nor omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading.

      (c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.

      (d) The Company shall furnish to each Holder, without charge, at least one
electronic copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and if the Holder so
request in writing, all exhibits thereto (including those, if any, incorporated
by reference).

      (e) The Company shall, during the period which the Registration Statement
is effective, deliver to each Holder an electronic copy of the Prospectus
(including each preliminary Prospectus) included in the Registration Statement
as such Holder may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the Prospectus by each of the
Holders in connection with the offering and sale of Registrable Securities.

                                       5

<PAGE>

      (f) Prior to any public offering of the Registrable Securities pursuant to
any Registration Statement the Company shall register or qualify or cooperate
with the Holders and their respective counsel in connection with the
registration or qualification of the Registrable Securities for offer and sale
under the securities or "blue sky" laws of such states of the United States as
any Holder reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Registrable Securities; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action which would subject it to general
service of process or to taxation in more than a nominal amount in any
jurisdiction where it is not then so subject.

      (g) The Company shall cooperate with the Holders or underwriters to
facilitate the timely preparation and delivery of certificates representing the
Registrable Securities to be sold pursuant to any Registration Statement free of
any restrictive legends and in such denominations and registered in such names
as the Holders may request a reasonable period of time prior to sales of the
Registrable Securities pursuant to such Registration Statement.

      (h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Company is
required to maintain an effective Registration Statement, the Company shall
promptly prepare and file a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus and any other required
document so that, as thereafter delivered to Holders or purchasers of
Securities, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

      (i) Not later than the effective date of the Registration Statement, the
Company will provide a CUSIP number for the Registrable Securities and provide
the Warrant Agent with printed certificates for the Registrable Securities, in a
form eligible for deposit with The Depository Trust Company.

      (j) Use its commercially reasonable efforts to cause all such Registrable
Securities to be quoted on Nasdaq (if the Common Stock is so quoted), and enter
into such customary agreements including a listing application and
indemnification agreement in customary form, provided that the applicable
listing requirements are satisfied, and to provide a transfer agent and
registrar for such Registrable Securities covered by such registration statement
no later than the effective date of such registration statement.

      (k) Upon their execution of commercially customary confidentiality
agreements for securities offerings, the Company will make available for
inspection by the selling Holders, any underwriter participating in any
disposition pursuant to any Registration Statement, and any attorney, accountant
or other agent retained by any Holder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries, if any, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees to supply all information and respond to all inquiries
reasonably requested by any such Inspector in connection with such registration
statement.

                                       6

<PAGE>

      (l) If requested by the managing underwriter or underwriters or any
Holder, promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriters, each selling Holder and
the Company agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable as notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment.

      (m) Cooperate with the selling Holders and each underwriter or agent
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with or
any other securities exchange and/or the NASD;

      (n) The Company will comply with all rules and regulations of the SEC and
make available to its security holders, within the required time periods, an
earnings statement covering a period of at least twelve months, beginning with
the first month after the effective date of the registration statement (as the
term "effective date" is defined in Rule 158(c) under the Securities Act), which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder or any successor provisions thereto.

      (o) The Company shall enter into such customary agreements (including, if
applicable, an underwriting agreement in customary form, which may include
customary indemnification provisions) and take all such other action, if any, in
order to facilitate the disposition of the Registrable Securities pursuant to
the Shelf Registration, including (i) supporting any Holder's efforts to execute
block trades with institutional buyers, (ii) making appropriate members of
senior management of the Company reasonably available (subject to consulting
with them in advance as to schedule) for customary participation in telephonic,
in-person conferences or "road show" presentations to potential investors, (iii)
obtaining customary opinions of counsel to the Company or comfort letters from
the Company's independent auditors and (iv) delivering copies of Prospectuses as
may be requested by the managing underwriter or underwriters.

SECTION 4. REGISTRATION DEFAULT.

      (a) The Company agrees that, in the event that (i) the Registration
Statement has not been declared effective by the SEC on or before March 30, 2007
or (ii) if effectiveness of the Registration Statement is suspended at any time
other than pursuant to a Suspension Notice while any Registrable Securities
remain outstanding (each, a "Registration Default"), for any thirty-day period
(a "Liquidated Damages Period") during which the Registration Default remains
uncured, the Company shall pay an aggregate of $250,000 to the Holders, which
cash payment shall be made on a pro rata basis in accordance with each Holder's
percentage holding of the then outstanding Registrable Securities, for each
Liquidated Damages Period during which the Registration Default remains uncured;
provided, however, that if a Holder fails to provide the Company with any
information that is required to be provided in the Registration Statement with
respect to such Holder as set forth herein, then the commencement of the
Liquidated Damages Period described above shall be extended until two business
days following the date of receipt by the Company of such required information;
provided further that the amount payable to any Holder hereunder for any partial
Liquidated Damages Period shall be prorated for the number of actual days during
such Liquidated Damages Period during which a Registration Default remains
uncured.

                                       7

<PAGE>

      (b) The Company shall deliver said cash payment to the Holders by the
seventh business day after the end of each such Liquidated Damages Period. If
the Company fails to pay said cash payment to the Holders in full by the seventh
business day after the end of such Liquidated Damages Period, the Company will
pay interest thereon at a rate of 10% per annum (or such lesser maximum amount
that is permitted to be paid by applicable law) to the Holders, accruing daily
from the date such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full.

      (c) Notwithstanding the other provisions of this Section 4, the maximum
amount of liquidated damages which the Company may be obligated to pay under
this Section 4 shall be limited to $2,000,000 (the "Liquidated Damages Cap").

SECTION 5. LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
           REGISTRATION COVENANTS.

      The obligations of the Company described in Section 2 of this Agreement
are subject to each of the following limitations, conditions and qualifications:

      (a) Subject to the next sentence of this paragraph, the Company shall be
entitled to postpone, for a reasonable period of time, the filing of
effectiveness of, or suspend the right of any Holder to make sales pursuant to,
any Registration Statement otherwise required to be prepared, filed and made and
kept effective by it under the registration covenants described in Section 2
hereof; provided, however, that the duration of such postponement or suspension
may not exceed 90 days in any 365-day period. Such postponement or suspension
may be effected only if (i) (A) an event or circumstance occurs and is
continuing as a result of which such Registration Statement, any related
Prospectus or any document incorporated therein by reference as then amended or
supplemented or proposed to be filed would, in the Company's good faith
judgment, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading and (B)(1) the Company determines in its good faith judgment that
the disclosure of the event at that time would have a material adverse effect on
the business, operations or prospects of the Company or (2) the disclosure
otherwise relates to a material business transaction or development that has not
yet been publicly disclosed or (ii) the Company shall have received a notice
referred to Section 3(b)(iii) hereof. If the Company shall so postpone the
filing or effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, a Registration Statement it shall, as promptly as possible, notify
the Holders of such determination (in each case, a "Suspension Notice"). Upon
receipt of such Suspension Notice, each Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 3(g) hereof, or (ii) such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus (in each case, the "Recommencement Date"). Each
Holder receiving a Suspension Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Holder's possession which have been replaced by the Company with more recently
dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
the Prospectus covering such Registrable Securities that was current at the time
of receipt of the Suspension Notice.

                                       8

<PAGE>

      (b) The Company's obligations shall be subject to the obligations of the
Holders to furnish all information and materials and to take any and all actions
as may be required under federal and state securities laws and regulations
(including any comments issued by the SEC staff with respect to the Registration
Statement or the matters related thereto) to permit the Company to comply with
all applicable requirements of the SEC and to obtain any acceleration of the
effective date of such Registration Statement.

SECTION 6. REGISTRATION EXPENSES.

      (a) All expenses incident to the Company's performance of and compliance
with this Agreement will be borne by the Company, including without limitation:

         (i) all registration and filing fees and expenses;

         (ii) all fees and expenses of compliance with federal securities and
state "blue sky" or securities laws;

         (iii) all expenses of printing (including printing certificates for the
securities to be issued in the Registration and printing of prospectuses),
messenger and delivery services and telephone usage;

         (iv) all fees and expenses customarily paid by an issuer in connection
with an underwritten offering;

         (v) all fees and disbursements of counsel for the Company;

         (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit required
by or incident to such performance); and

         (vii) all other reasonable out-of-pocket expenses of any Holder which
are customarily paid by an issuer.

      (b) The Company will bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company.

                                       9

<PAGE>

SECTION 7. INDEMNIFICATION.

      (a) The Company agrees to indemnify and hold harmless each Holder and each
Person, if any, who controls such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any losses,
claims, damages or liabilities, joint or several, or any actions in respect
thereof (including, but not limited to, any losses, claims, damages, liabilities
or actions relating to purchases and sales of the Registrable Securities) to
which each Indemnified Party (as defined in Section 7(c) below) may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus relating to a Registration, or arise
out of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading, and shall reimburse, as incurred, the
Indemnified Parties for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that (i) the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary Prospectus relating to a Registration Statement in reliance upon and
in conformity with written information pertaining to such Holder and furnished
to the Company by or on behalf of such Holder specifically for inclusion therein
and (ii) with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary Prospectus relating to the
Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder from whom the Person asserting any
such losses, claims, damages or liabilities purchased the Registrable Securities
concerned, to the extent that the Prospectus was required to be delivered by
such Holder under the Securities Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder results from the fact that
there was not sent or given to such Person, at or prior to the written
confirmation of the sale of such Registrable Securities to such Person, a copy
of the final Prospectus if the Company had previously furnished copies thereof
to such Holder; provided further, however, that this indemnity agreement will be
in addition to any liability which the Company may otherwise have to such
Indemnified Party.

      (b) Each Holder of the Registrable Securities, severally and not jointly,
will indemnify and hold harmless the Company and each other Holder and each
Person, if any, who controls the Company or any such other Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any losses, claims, damages or liabilities or any actions in
respect thereof, to which the Company, such other Holder or any such controlling
Person may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary Prospectus relating to a
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, but in each case only to the extent
that the untrue statement or omission or alleged untrue statement or omission
was made in reliance upon and in conformity with written information pertaining
to such Holder and furnished to the Company by or on behalf of such Holder
specifically for inclusion therein; and, subject to the limitation set forth
immediately preceding this clause, shall reimburse, as incurred, the Company and
each such other Holder for any legal or other expenses reasonably incurred by
the Company, such other Holder or any such controlling Person in connection with
investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Holder may otherwise have to the Company, such other Holder or any
such controlling Persons. No Holder shall be liable under this Section 7(b) for
any amounts exceeding the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Registration Statement giving rise to the
indemnification obligation.

                                       10

<PAGE>

      (c) Promptly after receipt by any Person in respect of which indemnity may
be sought pursuant to Section 7(a) or (b) (any such Person, an "Indemnified
Party") under this Section 7 of notice of the commencement of any action or
proceeding (including a governmental investigation), such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not, in any event,
relieve the indemnifying party from any obligations to any Indemnified Party
other than the indemnification obligation provided in paragraph (a) or (b)
above. In case any such action is brought against any Indemnified Party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such Indemnified
Party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such Indemnified Party of its election so to assume the defense thereof the
indemnifying party will not be liable to such Indemnified Party under this
Section 7 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such Indemnified Party in connection
with the defense thereof. No indemnifying party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened action in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party unless such settlement includes an unconditional release of such
Indemnified Party from all liability on any claims that are the subject matter
of such action, and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any Indemnified Party. The
indemnifying party shall not be liable for the costs and expenses of any
settlement of such action effected by such Indemnified Party without the consent
of the indemnifying party, which consent shall not be unreasonably withheld.

                                       11

<PAGE>

      (d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an Indemnified Party under subsections (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such Indemnified Party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
Indemnified Party on the other from the sale of the Registrable Securities by
the Holders, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and the
Indemnified Party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Holder or such other Indemnified
Party, as the case may be, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this Section 7(d), the Holders of the
Registrable Securities shall not be required to contribute any amount in excess
of the amount by which the net proceeds received by such Holders from the sale
of the Registrable Securities pursuant to the Registration Statement exceeds the
amount of damages that such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each Person, if any, who controls such Indemnified Party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such Indemnified Party, and each Person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Company.

      (e) The agreements contained in this Section 7 shall survive the sale of
the Registrable Securities pursuant to the Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any Indemnified
Party.

SECTION 8. RULE 144.

      The Company shall use its best efforts to file the reports required to be
filed by it under the Exchange Act in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of their securities pursuant to Rule 144. The Company covenants that it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144. Upon the request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.

                                       12

<PAGE>

SECTION 9. MISCELLANEOUS.

      (a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2 hereof. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

      (b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the Closing Date.

      (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority of the Registrable Securities affected by
such amendment, modification, supplement, waiver or consent.

      (d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:

            (1) if to a Holder of the Securities, at the most current address
      given by such Holder to the Company or Warrant Agent.

            (2) if to the Company, at its address as follows:

                Harbin Electric, Inc.
                No. 9 Ha Ping Xi Lu, Ha Ping Lu Ji Zhong Qu
                Harbin Kai Fa Qu
                Harbin 150060
                P.R. China
                Attention: Yang Tianfu, CEO
                Telecopier No.:  +86 451 8611 6769

   with a copy to:

                Reed Smith LLP
                Two Embarcadero Center, Suite 2000
                San Francisco, CA 94111
                U.S.A.
                Attention:  Robert M. Smith, Esq.
                Telecopier No.:  +1 415 391 8269

                                       13

<PAGE>

            (3) if to the Warrant Agent, at its address as follows:

                The Bank of New York
                101 Barclay Street - 21st Floor
                West New York, NY 10286
                U.S.A.
                Telecopier No.: +1 212 815 5802 or +1 212 815 5803
                Attention:  Global Finance Unit

   with a copy to:

                Pryor Cashman Sherman & Flynn LLP
                410 Park Ave., 10th Floor
                New York, NY 10022
                U.S.A.
                Telecopier No.:  +1 212 798 6307
                Attention:  Ronald T. Sarubbi, Esq.

      All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by the recipient's facsimile machine operator, if sent by
facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.

      (e) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit the Company, the Holders and their respective successors
and assigns. In addition, and whether or not any express assignment shall have
been made, the provisions of this Agreement which are for the benefit of the
Purchasers shall also be for the benefit of and enforceable by any subsequent
Holder, subject to the terms and conditions contained in this Agreement. Each
Purchaser and any Holder shall provide written notice to the Company of any
assignment of their rights hereunder or any transfer of Registrable Securities
which are entitled to such rights under the terms of this Agreement; provided
that the failure to provide such notice shall not affect any such rights of any
Purchaser or any Holder.

      (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

      (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

                                       14

<PAGE>

      (i) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

      (j) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its Affiliates (other
than subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

      (k) Business Combinations. Without the prior written consent of the
Holders, the Company shall not consolidate with or enter into any merger,
consolidation or other business combination transaction (for the purposes of
this Section 9(k), a "business combination") with another Person (whether or not
the Company is the surviving entity) or sell, transfer or distribute all or
substantially all of its assets, whether in a single transaction or through a
series of related transactions, to another Person or group of affiliated Persons
or permit any of its subsidiaries to enter into any such transaction or
transactions, where the business combination or sale, transfer or distribution
involves the payment by any Person of any securities to, or the exchange by any
Person of any securities with, the Company or any holders of Common Stock of the
Company, unless the issuer of such securities agrees to be bound by the terms of
this Agreement with Holders relating to such securities or otherwise enters into
a new registration rights agreement which shall contain terms substantially
similar to this Agreement and shall otherwise be in a form satisfactory to the
Holders.

                            [Signature Page Follows]

                                       15

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                           HARBIN ELECTRIC, INC.

                                           By: /s/ Tianfu Yang
                                               ---------------------------------
                                               Name:  Tianfu Yang
                                               Title: Chief Executive Officer

CITADEL EQUITY FUND LTD.

By:  Citadel Limited Partnership, Portfolio Manager

By:  Citadel Investment Group, L.L.C., its General Partner

By:  /s/ Christopher L. Ramsay
   ----------------------------------
    Name: Christopher L. Ramsay
    Title:  Authorized Signatory

Merrill Lynch International

By:  /s/ Mark Grimley
   ----------------------------------
    Name: Mark Grimley
    Title:  Director

            [SIGNATURE PAGE TO EQUITY REGISTRATION RIGHTS AGREEMENT]EXHIBIT 4.5

                             SHARE PLEDGE AGREEMENT

      This SHARE PLEDGE AGREEMENT, dated as of August 30, 2006 (this
"Agreement"), is executed between HARBIN ELECTRIC, INC., a Nevada corporation
(the "Pledgor") and THE BANK OF NEW YORK, a New York banking corporation, in its
capacity as collateral agent (with its successors in such capacity, the
"Collateral Agent") for the benefit of the Secured Parties (as defined below).

                                   WITNESSETH:

      (1) The Pledgor issued its Guaranteed Senior Secured Floating Rate Notes
due 2012 (the "2012 Notes") and its Guaranteed Senior Secured Floating Rate
Notes due 2010 (the "2010 Notes" and together with the 2012 Notes, the "Notes")
pursuant to an indenture, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), among the Pledgor, the Subsidiary Guarantor named therein and The
Bank of New York, a New York banking corporation, as trustee (in such capacity,
the "Trustee"), pursuant to which the Pledgor has guaranteed the payment of all
of the principal of and interest and premium due under the Notes;

      (2) The Pledgor owns the issued and outstanding equity interests set forth
on Exhibit A attached hereto and made a part hereof (the "Equity Interests");

      (3) The Pledgor is required to execute and deliver this Agreement pursuant
to the Indenture.

      NOW, THEREFORE, for and in consideration of the foregoing and of any
financial accommodations or extensions of credit heretofore, now or hereafter
made to or for the benefit of the Secured Parties pursuant to the Indenture or
any other agreement, instrument or document executed pursuant to or in
connection therewith, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Pledgor and the Collateral
Agent hereby agree as follows:

      1. Defined Terms. Unless otherwise defined herein, each capitalized term
used herein that is defined in the Indenture shall have the meaning specified
for such term in the Indenture. Unless otherwise defined herein or in the
Indenture, terms used in Article 8 or Article 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York are used herein as
therein defined. In addition as used herein, "Secured Parties" means each of the
Collateral Agent, the Trustee, the holders of any Note (the "Holders") and the
holders of any other Liabilities.

      2. Pledge. The Pledgor hereby pledges to the Collateral Agent, for the
benefit of the Secured Parties, and grants to the Collateral Agent for the
benefit of the Secured Parties, a security interest in, the following
(collectively, the "Pledged Collateral"):

            (a) All of the right, title and interest of the Pledgor in the
      Equity Interests, whether now existing or hereafter arising, and the
      certificates representing the shares of such capital stock (such
      now-existing shares being identified on Exhibit A attached hereto and made
      a part hereof), all options and warrants for the purchase of additional
      equity interests now or hereafter held in the name of the Pledgor (all of
      said Equity Interests, options and warrants and all capital stock held in
      the name of the Pledgor as a result of the exercise of such options or
      warrants being hereinafter collectively referred to as the "Pledged
      Stock"), herewith delivered to the Collateral Agent, accompanied by stock
      powers in the form of Exhibit B attached hereto and made a part hereof
      duly executed in blank, and all dividends, distributions, cash,
      instruments and other property from time to time received, receivable or
      otherwise distributed in respect of, or in exchange for, any or all of the
      Pledged Stock;

<PAGE>

            (b) All Additional Equity Interests (as defined below) from time to
      time acquired by the Pledgor from the date hereof in any manner, and the
      certificates representing such Additional Equity Interests (any such
      additional equity interests shall constitute part of the Pledged Stock and
      the Collateral Agent is irrevocably authorized to amend Exhibit A from
      time to time to reflect such additional equity interests), and all
      options, warrants, dividends, distributions, cash, instruments and other
      rights and options from time to time received, receivable or otherwise
      distributed in respect of or in exchange for any or all of the Equity
      Interest or Additional Equity Interests; and

            (c) All proceeds of the foregoing.

      3. Security for Liabilities. The Pledged Collateral secures the full and
prompt payment, performance and observance when due (whether at stated maturity,
by acceleration or otherwise) of (i) the payment of all of the principal of and
interest and premium, if any, on the Notes, (ii) all other Note Obligations, and
(iii) all obligations of the Pledgor under this Agreement (all such obligations
referred to in Clauses (i), (ii) and (iii) now or hereafter existing being
hereinafter collectively referred to as the "Liabilities").

      4. Delivery of Pledged Collateral; Registration and Acknowledgments. All
certificates representing or evidencing the Pledged Collateral, if any, shall be
delivered to and held by or on behalf of the Collateral Agent, pursuant hereto
and shall be in suitable form for transfer by delivery and shall be accompanied
by duly executed instruments of transfer, powers, or assignments in blank as
appropriate (such instruments of transfer, powers, or assignments in blank,
being the "Powers"), all in form and substance satisfactory to the Collateral
Agent. After the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Sections 8 and 9. In addition,
the Collateral Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.

      5. Pledged Collateral Adjustments. If, during the term of this Agreement:

            (a) Any stock dividend, reclassification, readjustment or other
      change is declared or made in the capital structure of the Pledged Entity
      (as defined below), or any option included within the Pledged Collateral
      is exercised, or both, or

                                       2

<PAGE>

            (b) Any subscription warrants, shares, or any other rights or
      options shall be issued in connection with the Pledged Collateral,

then all new, substituted and additional shares, warrants, shares, rights,
options or other securities, issued by reason of any of the foregoing, shall be
immediately delivered to and held by the Collateral Agent, under the terms of
this Agreement and shall constitute Pledged Collateral hereunder; provided,
however, that nothing contained in this Section 5 shall be deemed to permit any
distribution, issuance of additional shares, warrants, shares, rights or
options, reclassification, readjustment or other change in the capital structure
which is not expressly permitted in the Indenture nor to prohibit any such
distribution, issuance of additional equity interests, warrants, shares, rights
or options, reclassification, readjustment or other change in the capital
structure of such issuer which is expressly permitted in the Indenture.

      6. Subsequent Changes Affecting Pledged Collateral. The Pledgor represents
and warrants that it has made its own arrangements for keeping itself informed
of changes or potential changes affecting the Pledged Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of
distributions, reorganization or other exchanges, offers to purchase and voting
rights), and the Pledgor agrees that none of the Collateral Agent or any of the
Secured Parties shall have any obligation to inform the Pledgor of any such
changes or potential changes or to take any action or omit to take any action
with respect thereto. The Collateral Agent may, after the occurrence and during
the continuance of an Event of Default, without notice and at its option,
transfer or register the Pledged Collateral or any part thereof into its or its
nominee's name with or without any indication that such Pledged Collateral is
subject to the security interest hereunder.

      7. Representations and Warranties. The Pledgor represents and warrants as
follows:

            (a) The Pledgor is the sole legal and beneficial owner of the Equity
      Interests set forth opposite its name on Exhibit A attached hereto and
      made a part hereof, free and clear of any Lien except for the Lien created
      by this Agreement and Permitted Liens;

            (b) All of the Pledged Stock has been duly authorized and validly
      issued, is fully paid and non-assessable;

            (c) All of the Pledged Stock is presently represented by the
      certificates listed on Exhibit A hereto. As of the date hereof, there are
      no existing options, warrants, calls or commitments of any character
      whatsoever relating to the Pledged Stock;

            (d) The Pledgor has full power and authority to enter into this
      Agreement;

            (e) There are no restrictions upon the voting rights associated
      with, or upon the transfer of, any of the Pledged Collateral except
      pursuant to the Securities Act;

            (f) The Pledgor has the right to vote, pledge, assign and grant a
      security interest in or otherwise transfer such Pledged Collateral free of
      any Liens, except as set forth in paragraph (e) above;

                                       3

<PAGE>

            (g) No authorization, approval, or other action by, and no notice to
      or filing with, any Governmental Authority is required either (i) for the
      pledge of the Pledged Collateral pursuant to this Agreement or for the
      execution, delivery or performance of this Agreement by the Pledgor or
      (ii) for the exercise by the Collateral Agent of the voting or other
      rights provided for in this Agreement or the remedies in respect of the
      Pledged Collateral pursuant to this Agreement (except as may be required
      in connection with such disposition by laws affecting the offering and
      sale of securities generally);

            (h) The pledge of the Pledged Collateral pursuant to this Agreement,
      together with the delivery of the stock certificates pertaining thereto to
      the Collateral Agent, creates a valid and perfected first priority
      security interest in the Pledged Collateral, in favor of the Collateral
      Agent for the benefit of the Secured Parties, securing the payment and
      performance of the Liabilities;

            (i) This Agreement has been duly executed and delivered by and on
      behalf of the Pledgor and constitutes the legal, valid and binding
      obligation of the Pledgor, enforceable against the Pledgor in accordance
      with its terms;

            (j) There is no action, suit, proceeding, governmental investigation
      or arbitration, at law or in equity, or before or by any Governmental
      Authority, pending, or to the knowledge of the Pledgor, threatened against
      the Pledgor or any of its property which will materially and adversely
      affect the ability of the Pledgor to perform its obligations under this
      Agreement;

            (k) The execution, delivery and performance of this Agreement by the
      Pledgor (i) does not violate any indenture, mortgage, or any other
      agreement to which the Pledgor is a party or by which any of its
      properties or assets may be bound; (ii) complies with all corporate
      organization documents of the Pledgor; and (iii) does not violate any
      restriction on such transfer or encumbrance of the Pledged Collateral;

            (l) The Powers are effective endorsements duly executed by an
      appropriate person and give the Collateral Agent the authority they
      purport to confer; and

            (m) The Pledged Stock constitutes such percent of the issued and
      outstanding shares of Equity Interests of the issuer thereof as set forth
      in Exhibit A hereto.

      8. Voting Rights. During the term of this Agreement, and except as
provided in this Section 8 below, the Pledgor shall have the right to vote the
Pledged Stock on all corporate questions in a manner not inconsistent with the
terms of this Agreement, the Indenture and the other Security Documents;
provided, however, that no vote shall be cast, and 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 or which would
authorize, effect or consent to (unless and to the extent expressly permitted by
the Indenture) (i) the dissolution or liquidation, in whole or in part, of the
issuer of Pledged Stock (a "Pledged Entity"); (ii) the consolidation or merger
of a Pledged Entity with any other Person; (iii) the sale, disposition or
encumbrance of all or substantially all of the assets of a Pledged Entity,
except for Liens in favor of the Collateral Agent and Permitted Liens; (iv) any
change in the authorized number of shares, the stated capital or the authorized
share capital of a Pledged Entity or the issuance of any additional shares of
its Equity Interests; or (v) the alteration of the voting rights with respect to
the Equity Interests of a Pledged Entity. After the occurrence and during the
continuation of an Event of Default, the Collateral Agent shall, at the
Collateral Agent's option and following written notice from the Collateral Agent
to the Pledgor, exercise all voting rights pertaining to the Pledged Collateral,
including the right to take action by shareholder consent.

                                       4

<PAGE>

      9. Dividends and Other Distributions. (a) So long as no Event of Default
shall have occurred and be continuing:

            (i) The Pledgor shall be entitled to receive and retain any and all
      dividends and distributions paid in respect of the Pledged Collateral,
      notwithstanding such dividends and distributions being subject to the
      pledge and assignment thereof pursuant to Section 2; provided, however,
      that any and all

                  (A) dividends and distributions paid or payable other than in
            cash with respect to, and instruments and other property received,
            receivable or otherwise distributed with respect to, or in exchange
            for, any of the Pledged Collateral;

                  (B) dividends and other distributions paid or payable in cash
            with respect to any of the Pledged Collateral on account of a
            partial or total liquidation or dissolution or in connection with a
            reduction of capital, capital surplus or paid-in surplus; and

                  (C) cash paid, payable or otherwise distributed with respect
            to principal of, or in redemption of, or in exchange for, any of the
            Pledged Collateral;

      shall be Pledged Collateral, and shall be forthwith delivered to the
      Collateral Agent to hold, for the benefit of the Secured Parties, as
      Pledged Collateral and shall, if received by the Pledgor, be received in
      trust for the Collateral Agent, for the benefit of the Secured Parties;
      and

            (ii) The Collateral Agent shall execute and deliver (or cause to be
      executed and delivered) to the Pledgor all such proxies and other
      instruments as the Pledgor may reasonably request for the purpose of
      enabling the Pledgor to receive the dividends which it is authorized to
      receive and retain pursuant to clause (i) above.

      (b) After the occurrence and during the continuation of an Event of
Default:

            (i) All rights of the Pledgor to receive the dividends and other
      distributions which it would otherwise be authorized to receive and retain
      pursuant to Section 9(a)(i) hereof shall cease, and all such rights shall
      thereupon become vested in the Collateral Agent, for the benefit of the
      Secured Parties, which shall thereupon have the sole right to receive and
      hold as Pledged Collateral such dividends and other distributions;

                                       5

<PAGE>

            (ii) All dividends and other distributions which are received by the
      Pledgor contrary to the provisions of clause (i) of this Section 9(b)
      shall be received in trust for the Collateral Agent, for the benefit of
      the Secured Parties;

            (iii) The Pledgor shall, upon the reasonable request of the
      Collateral Agent, at the Pledgor's expense, execute and deliver, and cause
      the Pledged Entity and its officers and directors to execute and deliver,
      all such instruments and documents, and do or cause to be done all such
      other acts and things, as may be required by applicable law or may be
      necessary or, in the opinion of the Pledgor or its counsel, advisable to
      register the applicable Pledged Collateral under the provisions of the
      Securities Act, and to exercise its best efforts to cause the registration
      statement relating thereto to become effective and to remain effective for
      such period as prospectuses are required by law to be furnished, and to
      make all amendments and supplements thereto and to the related prospectus
      which, in the opinion of the Collateral Agent, the Pledgor or its counsel,
      are necessary or advisable, all in conformity with the requirements of the
      Securities Act and the rules and regulations of the Commission applicable
      thereto;

            (iv) The Pledgor shall, at the Pledgor's expense, use its best
      efforts to qualify the Pledged Collateral under state securities or "Blue
      Sky" laws and to obtain all necessary governmental approvals for the sale
      of the Pledged Collateral;

            (v) The Pledgor, if applicable, shall, at the Pledgor's expense,
      cause the Pledged Entity to make available to the holders of its
      securities, as soon as practicable, earning statements which will satisfy
      the provisions of Section 11(a) of the Securities Act; and

            (vi) The Pledgor shall, at the Pledgor's expense, do or cause to be
      done all such other acts and things as may be necessary to make such sale
      of the Pledged Collateral or any part thereof valid and binding and in
      compliance with applicable law.

The Pledgor will reimburse the Collateral Agent for all expenses incurred by the
Collateral Agent, including, without limitation, reasonable attorneys' and
accountants' fees and expenses in connection with the foregoing. Upon or at any
time after the occurrence and during the continuation of an Event of Default, if
any Secured Party determines that, prior to any public offering of any
securities constituting part of the Pledged Collateral, such securities should
be registered under the Securities Act and/or registered or qualified under any
other federal or state law and such registration and/or qualification is not
practicable, then the Pledgor agrees that it will be commercially reasonable if
a private sale, upon at least ten (10) Business Days' notice to the Pledgor, is
arranged so as to avoid a public offering, even though the sales price
established and/or obtained at such private sale may be substantially less than
prices which could have been obtained for such security on any market or
exchange or in any other public sale.

      10. Transfers and other Liens. Other than as permitted under the
Indenture, the Pledgor agrees that it will not (i) sell, transfer or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral
without the prior written consent of the Collateral Agent, or (ii) create or
permit to exist any Lien upon or with respect to any of the Pledged Collateral
(except for the security interest under this Agreement and the Permitted Liens).
The Pledgor further agrees that it will procure, or take reasonable efforts to
procure, that the Pledged Entity and any other direct or indirect subsidiary
thereof shall carry on business only in the ordinary course and will not dispose
of or agree to dispose of a substantial part of its assets or undertaking
without the prior written approval of the Collateral Agent.

                                       6

<PAGE>

      11. Defense of Title. The Pledgor will defend the title to the Pledged
Collateral and the Liens of the Collateral Agent in the Pledged Collateral
against the claim of any Person (other than Permitted Liens) and will maintain
and preserve such Liens, except with respect to Permitted Liens.

      12. Additional Equity Interests. The Pledgor will, upon obtaining
ownership of any additional equity interests otherwise required to be pledged to
the Collateral Agent pursuant to any of the Security Documents, which equity
interests are not already Pledged Collateral (the "Additional Equity
Interests"), promptly (and in any event within three (3) Business Days) deliver
to the Collateral Agent an amendment to this Agreement, duly executed by the
Pledgor and in form and substance satisfactory to the Secured Parties, in
respect of any such Additional Equity Interests, pursuant to which the Pledgor
shall pledge to the Collateral Agent all of such Additional Equity Interests.
The Pledgor hereby authorizes the Collateral Agent to attach such amendment to
this Agreement and agrees that all Pledged Stock listed on any such amendment
delivered to the Collateral Agent shall for all purposes hereunder be considered
Pledged Collateral.

      13. Remedies.(a) The Collateral Agent shall have, in addition to any
other rights given under this Agreement or by law, all of the rights and
remedies with respect to the Pledged Collateral of a secured party under the
Uniform Commercial Code as in effect in the State of New York (the "UCC"). In
addition, after the occurrence and during the continuation of an Event of
Default, the Collateral Agent shall have such powers of sale and other powers as
may be conferred by applicable law. With respect to the Pledged Collateral or
any part thereof which shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent or which the Collateral Agent
shall otherwise have the ability to transfer under applicable law, the
Collateral Agent may, in its sole discretion, without notice except as specified
below, after the occurrence and during the continuation of an Event of Default,
sell or cause the same to be sold at any exchange, broker's board or at public
or private sale, in one or more sales or lots, at such price as the Collateral
Agent or any Secured Party may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk, and the purchaser of any or all
of the Pledged Collateral so sold shall thereafter own the same, absolutely free
from any claim, encumbrance or right of any kind whatsoever. The Collateral
Agent or any Secured Party may, in its own name, or in the name of a designee or
nominee, buy the Pledged Collateral at any public sale and, if permitted by
applicable law, buy the Pledged Collateral at any private sale. The Pledgor
agrees to pay to the Collateral Agent all reasonable expenses (including,
without limitation, court costs and reasonable attorneys' and paralegals' fees
and expenses) of, or incident to, the enforcement of any of the provisions
hereof. The Collateral Agent agrees to distribute any proceeds of the sale of
the Pledged Collateral in accordance with the Indenture and the Pledgor shall
remain liable for any deficiency following the sale of the Pledged Collateral.

      (b) Unless any of the Pledged Collateral threatens to decline speedily in
value or is or becomes of a type sold on a recognized market, the Collateral
Agent will give the Pledgor reasonable notice of the time and place of any
public sale thereof, or of the time after which any private sale or other
intended disposition is to be made. Any sale of the Pledged Collateral conducted
in conformity with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Notwithstanding any provision to the contrary contained herein, the
Pledgor agrees that any requirements of reasonable notice shall be met if such
notice is received by the Pledgor as provided in Section 29 below at least ten
(10) Business Days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is waived, to the extent
permitted by law.

                                       7

<PAGE>

      (c) In view of the fact that federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after an Event of Default, the Pledgor agrees that after the
occurrence and during the continuation of an Event of Default, the Collateral
Agent may, from time to time, attempt to sell all or any part of the Pledged
Collateral by means of a private placement restricting the bidders and
prospective purchasers to those who are qualified and will represent and agree
that they are purchasing for investment only and not for distribution. In so
doing, the Collateral Agent may solicit offers to buy the Pledged Collateral, or
any part of it, from a limited number of investors deemed by the Collateral
Agent, in its reasonable judgment, to be financially responsible parties who
might be interested in purchasing the Pledged Collateral. If the Collateral
Agent solicits such offers from not less than four (4) such investors, then the
acceptance by the Collateral Agent of the highest offer obtained therefrom shall
be deemed to be a commercially reasonable method of disposing of such Pledged
Collateral; provided, however, that this Section does not impose a requirement
that the Collateral Agent solicit offers from four or more investors in order
for the sale to be commercially reasonable.

      (d) The Pledgor agrees to the maximum extent permitted by applicable law
that following the occurrence and during the continuance of an Event of Default
it will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and the Pledgor
waives the benefit of all such laws to the extent it lawfully may do so. The
Pledgor agrees that it will not interfere with any right, power and remedy of
Collateral Agent provided for in this Agreement or now or hereafter existing at
law or in equity or by statute or otherwise, or the exercise or beginning of the
exercise by Collateral Agent of any one or more of such rights, powers or
remedies. No failure or delay on the part of Collateral Agent to exercise any
such right, power or remedy and no notice or demand which may be given to or
made upon the Pledgor by the Collateral Agent with respect to any such remedies
shall operate as a waiver thereof, or limit or impair the Collateral Agent's
right to take any action or to exercise any power or remedy hereunder, without
notice or demand, or prejudice its rights as against the Pledgor in any respect.

      (e) The Pledgor further agrees that a breach of any of the covenants
contained in this Section 13 will cause irreparable injury to the Collateral
Agent, that the Collateral Agent shall have no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section 13 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants.

                                       8

<PAGE>

      14. Security Interest Absolute. All rights of the Collateral Agent and
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:

            (i) Any lack of validity or enforceability of the Indenture or any
      other agreement or instrument relating thereto;

            (ii) Any change in the time, manner or place of payment of, or in
      any other term of, all or any part of the Liabilities, or any other
      amendment or waiver of or any consent to any departure from the Indenture
      or this Agreement;

            (iii) Any exchange, release or non-perfection of any other
      collateral, or any release or amendment or waiver of or consent to
      departure from any guaranty, for all or any part of the Liabilities;

            (iv) the insolvency of the Pledgor; or

            (v) any other circumstance which might otherwise constitute a
      defense available to, or a discharge of, the Pledgor in respect of the
      Liabilities or of this Agreement.

      15. Collateral Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Collateral Agent its attorney-in-fact, with full authority, in the
name of the Pledgor or otherwise, after the occurrence and during the
continuation of an Event of Default, from time to time in the Collateral Agent's
sole discretion, to take any action and to execute any instrument which the
Collateral Agent or any Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same and to
arrange for the transfer of all or any part of the Pledged Collateral on the
books of the Pledged Entity to the name of the Collateral Agent or the
Collateral Agent's nominee.

      16. Waivers. The Pledgor waives to the fullest extent permitted by
applicable laws presentment and demand for payment of any of the Liabilities,
protest and notice of dishonor or Event of Default with respect to any of the
Liabilities and all other notices to which the Pledgor might otherwise be
entitled except as otherwise expressly provided herein or in the Indenture.

      17. Term. This Agreement shall remain in full force and effect until the
final payment in full, in cash, of the Liabilities. Upon the termination of this
Agreement as provided above (other than as a result of the sale of the Pledged
Collateral), the Collateral Agent will release the security interest created
hereunder and, if it then has possession of any Pledged Stock pledged hereunder,
will deliver such Pledged Stock previously delivered to it and the Powers to the
Pledgor.

                                       9

<PAGE>

      18. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Pledgor or the Pledged Entity for liquidation or reorganization, should the
Pledgor or the Pledged Entity become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of the Pledgor's or the Pledged Entity's assets, and shall
continue to be effective or be reinstated, as the case may be.

      19. Definitions. The singular shall include the plural and vice versa and
any gender shall include any other gender as the context may require.

      20. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon the Pledgor and its successors and assigns, and shall inure to the
benefit of the Collateral Agent and the Secured Parties, and their respective
successors and assigns. Nothing set forth herein or in any other Security
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement, the Indenture or any
Collateral. The Pledgor's successors shall include, without limitation, a
receiver, trustee or debtor-in-possession of or for the Pledgor.

      21. Governing Law. This Agreement has been executed and delivered by the
parties hereto in New York, New York. Any dispute between the Collateral Agent
and the Pledgor arising out of or related to the relationship established
between them in connection with this Agreement, and whether arising in contract,
tort, equity, or otherwise, shall be resolved in accordance with the laws of the
State of New York.

      22. Consent to Jurisdiction; and Service of Process. THE COLLATERAL AGENT
HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OR FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK. THE PLEDGOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY,
CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE PLEDGOR AND THE COLLATERAL AGENT
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT; PROVIDED THAT THE COLLATERAL AGENT AND THE PLEDGOR ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
NEW YORK COUNTY; AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE COLLATERAL AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE GUARANTEED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF COLLATERAL AGENT. THE PLEDGOR EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND THE PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PLEDGOR AT THE ADDRESS SET FORTH
IN THE INDENTURE AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID. The Collateral Agent shall have the right to
proceed against the Pledgor or its personal property in a court in any location
to enable the Collateral Agent to obtain personal jurisdiction over the Pledgor,
to realize on the Pledged Collateral or any other security for the Liabilities
or to enforce a judgment or other court order entered in favor of the Collateral
Agent.

                                       10

<PAGE>

      23. Waiver of Jury Trial. The Pledgor and the Collateral Agent waives any
right to trial by jury in any dispute, whether sounding in contract, tort, or
otherwise, between the Collateral Agent and the Pledgor arising out of or
related to the transactions contemplated by this Agreement or any other
instrument, document or agreement executed or delivered in connection herewith.
Either the Pledgor or the Collateral Agent may file an original counterpart or a
copy of this Agreement with any court as written evidence of the consent of the
parties hereto to the waiver of their right to trial by jury.

      24. Advice of Counsel. The Pledgor represents and warrants to the
Collateral Agent that it has discussed this Agreement and, specifically, the
provisions of Sections 21 through 23 hereof, with the Pledgor's lawyers.

      25. Severability. If any provision of this Agreement is held to be
prohibited or unenforceable in any jurisdiction the substantive laws of which
are held to be applicable hereto, such prohibition or unenforceability shall not
affect the validity or enforceability of the remaining provisions hereof and
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

      26. Further Assurances. The Pledgor agrees that at any time and from time
to time, at the expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be required by applicable law or may be necessary or desirable, or that any
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any of the Pledged Collateral, including, without limitation, the
filing of financing statements under Article 9 of the Uniform Commercial Code of
Nevada. The Pledgor hereby further agrees that it shall not make any change to
its name or jurisdiction or the form of its organization without prior written
notice or otherwise permitted under the Indenture.

      27. The Collateral Agent's Duty of Care.

      (a) The Collateral Agent shall not be liable for any acts, omissions,
errors of judgment or mistakes of fact or law including, without limitation,
acts, omissions, errors or mistakes with respect to the Pledged Collateral,
except for those arising out of or in connection with the Collateral Agent's (i)
gross negligence or willful misconduct, or (ii) failure to use reasonable care
with respect to the safe custody of the Pledged Collateral in the Collateral
Agent's possession. Without limiting the generality of the foregoing, the
Collateral Agent shall be under no obligation to take any steps necessary to
preserve rights in the Pledged Collateral against any other parties but may do
so at its option. All expenses incurred in connection therewith shall be for the
sole account of the Pledgor, and shall constitute part of the Liabilities
secured hereby.

                                       11

<PAGE>

      (b) No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or the
Indenture. The Collateral Agent shall not be liable for any delay or failure to
act as may be required hereunder when such delay or failure is due to any act of
God, interruption or other circumstances beyond its control provided it
exercises such diligence as the circumstances may reasonably require. The
Collateral Agent shall be entitled to rely on any communication, instrument,
paper or other document reasonably believed by it to be genuine and correct and
to have been signed or sent by the proper person. The Collateral Agent may
consult with, and obtain advice from, legal counsel as to the construction of
any of the provisions of this Agreement, and shall incur no liability in acting
in good faith in accordance with the reasonable advice of such counsel.

      (c) The Collateral Agent shall not be deemed to have notice of any Event
of Default unless an officer of the Collateral Agent has actual knowledge
thereof or unless written notice of any such Event of Default is received by the
Collateral Agent at the office of the Collateral Agent specified in or pursuant
to Section 12.01 of the Indenture.

      (d) The Collateral Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Pledged Collateral shall be to deal
with it in the same manner as the Collateral Agent deals with similar property
for its own account.

      (e) In no event shall the Collateral Agent be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Collateral Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.

      28. Additional Provisions Relating to the Collateral Agent.

      (a) Any corporation, bank, trust company or association into which the
Collateral Agent may be merged or converted or with which it may be
consolidated, or any corporation, bank, trust company or association resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation, bank, trust company or association succeeding to
all or substantially all the corporate trust business of the Collateral Agent,
shall be the successor of the Collateral Agent hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.

                                       12

<PAGE>

      Any resignation or removal of the Collateral Agent as Trustee under the
Indenture in accordance with the provisions thereof shall result in a
resignation or removal of the Collateral Agent hereunder. The provisions of
Section 7.08 of the Indenture with respect to replacement of the Trustee shall
be applicable to the replacement of the Collateral Agent.

      (b) At any time or times, for the purpose of meeting any legal
requirements of any jurisdiction in which any of the Collateral may at the time
be located, the Collateral Agent shall have the power to appoint any Person or
Persons either to act as co-collateral agent, or co-collateral agents, jointly
with the Collateral Agent of all or any part of the Pledged Collateral or to act
as separate collateral agent or separate collateral agents of all or any part of
the Pledged Collateral and to vest in such Person or Persons, in such capacity,
such title to the Pledged Collateral or any part thereof, and such rights,
powers, duties or obligations as the Collateral Agent may consider necessary or
desirable, subject to the other provisions of this Section 28.

      (c) Unless otherwise provided in the instrument appointing such
co-collateral agent or separate collateral agent, every co-collateral agent or
separate collateral agent shall, to the extent permitted by law, be appointed
subject to the following terms namely:

            (i) All rights, power, duties and obligations under this Agreement
      conferred upon the Collateral Agent in respect of the custody, control or
      management of the collateral, shall be exercised solely by the Collateral
      Agent;

            (ii) All rights, powers, duties and obligations conferred or imposed
      upon the collateral agents shall be conferred or imposed upon and
      exercised or performed by the Collateral Agent, or by the Collateral Agent
      and such co-collateral agent or co-collateral agents, or separate
      collateral agent or separate collateral agents jointly, except to the
      extent that, under the law of any jurisdiction in which any particular act
      or acts are to be performed, the Collateral Agent shall be incompetent or
      unqualified to perform such act or acts, in which event such act or acts
      shall be performed by such co-collateral agent or co-collateral agents or
      separate collateral agent or separate collateral agents;

            (iii) Any request in writing by the Collateral Agent to any
      co-collateral agent or separate collateral agent to take or to refrain
      from taking any action hereunder shall be sufficient warrant for the
      taking, or the refraining from taking, of such action by such
      co-collateral agent or separate collateral agent;

            (iv) Any co-collateral agent or separate collateral agent to the
      extent permitted by law may delegate to the Collateral Agent the exercise
      of any right, power, duty or obligation, discretionary or otherwise;

            (v) The Collateral Agent at any time, by an instrument in writing,
      may accept the resignation of, or remove, any co-collateral agent or
      separate collateral agent appointed under this Section 28. As successor to
      any co-collateral agent or separate collateral agent so resigned or
      removed may be appointed in the manner provided in this Section 28.

            (vi) No collateral agent hereunder shall be personally liable by
      reason of any act or omission of any other collateral agent hereunder;

                                       13

<PAGE>

            (vii) Any demand, request, direction, appointment, removal, notice,
      consent, waiver or other action in writing delivered to the Collateral
      Agent shall be deemed to have been delivered to each such co-collateral
      agent or separate collateral agent; and

            (viii) Any Collateral received by any such co-collateral agent or
      separate collateral agent hereunder shall forthwith, so far as may be
      permitted by law, be turned over to the Collateral Agent to be held
      pursuant to the terms hereof.

      (d) Upon the acceptance in writing of such appointment by any such
co-collateral agent or separate collateral agent, it or he shall be vested with
the estate, right, title and interest in the Pledged Collateral, or any portion
thereof, and with such rights, powers, duties, trusts or obligations, jointly or
separately with the Collateral Agent, all as shall be specified in the
instrument of appointment, subject to all the terms hereof.

      (e) In case any co-collateral agent or separate collateral agent shall
become incapable of acting, resign or be removed, the right, title and interest
in the Pledged Collateral and all rights, powers, duties and obligations of said
co-collateral agent or separate collateral agent shall, so far as permitted by
law, vest in and be exercised by the Collateral Agent unless and until a
successor co-collateral agent or separate collateral agent shall be appointed
pursuant to this Section 28.

      29. Notices. Any notice, demand, request or any other communication
required or desired to be served, given or delivered hereunder shall be in
writing and shall be served, given or delivered as provided in Section 12.01 of
the Indenture.

      30. Indemnity and Expenses. The Pledgor agrees, upon demand, to indemnify
the Collateral Agent against any and all losses, claims, damages, penalties,
fines, liabilities or expenses, including incidental and out-of-pocket expenses
and reasonable attorneys fees incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Agreement and to
pay to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Pledged Collateral, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder or (iv) the failure by the Pledgor to perform
or observe any of the provisions hereof.

      31. Amendments, Waivers and Consents. None of the terms or provisions of
this Agreement may be waived, altered, modified or amended, and no consent to
any departure by the Pledgor herefrom shall be effective, except by or pursuant
to an instrument in writing which (i) is duly executed by the Pledgor and the
Collateral Agent and (ii) complies with the requirements of Article VIII of the
Indenture. Any such waiver shall be valid only to the extent set forth therein.
A waiver by the Collateral Agent of any right or remedy under this Agreement on
any one occasion shall not be construed as a waiver of any right or remedy which
the Collateral Agent would otherwise have on any future occasion. No failure to
exercise or delay in exercising any right, power or privilege under this
Agreement on the part of the Collateral Agent shall operate as a waiver thereof;
and no single or partial exercise of any right, power or privilege under this
Agreement shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

                                       14

<PAGE>

      32. Section Headings. The section headings herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.

      33. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.

      34. Merger. This Agreement and the Indenture embody the entire agreement
and understanding, between the Pledgor and the Collateral Agent or any Holder
and supersedes all prior agreements and understandings, written and oral,
relating to the subject matter hereof.

      35. Termination; Release of Collateral. Notwithstanding anything in this
Agreement to the contrary, the Pledgor may, to the extent permitted by Section
4.12 of the Indenture, sell, assign, transfer or otherwise dispose of any
Pledged Collateral. In addition, the Pledged Collateral shall be subject to
release in accordance with Section 10.04 of the Indenture (such Pledged
Collateral and the Pledged Collateral referred to in the immediately preceding
sentence being the "Released Collateral"). The Liens under this Agreement shall
terminate with respect to the Released Collateral upon such sale, transfer,
assignment, disposition or release and upon the written request of the Pledgor,
the Collateral Agent shall execute and deliver, at the cost of the Pledgor, such
instrument or document as may be necessary to release the Liens granted
hereunder; provided, however, that (i) the Collateral Agent shall not be
required to execute any such documents on terms which, in any Secured Party's
opinion, would expose the Collateral Agent or any Holder to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Liabilities or any Liens on (or obligations of
the Pledgor in respect of) all interests retained by the Pledgor, including
without limitation, the proceeds of any sale, all of which shall continue to
constitute part of the Pledged Collateral.

                  [remainder of page intentionally left blank]

                                       15

<PAGE>

      IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have executed
this Agreement as of the date set forth above.

                                         HARBIN ELECTRIC, INC.

                                         By: /s/ Tianfu Yang
                                            ------------------------------------
                                         Name:
                                          Title:

Acknowledged and agreed to as of the date first written above.

THE BANK OF NEW YORK,
a New York banking corporation,
as Collateral Agent

By: /s/ Lici Zhu
   -----------------------------
Name:  Lici Zhu
Title:  Assistant Treasurer

                   [SIGNATURE PAGE TO SHARE PLEDGE AGREEMENT]

<PAGE>

                                    EXHIBIT A

                                  PLEDGED STOCK

<TABLE>
<CAPTION>
      Name of Pledgor                   Name of Issuer                Percentage of Stock        Number of Shares
---------------------------- ------------------------------------- -------------------------- ------------------------
<C>                          <C>                                   <C>                        <C>
   Harbin Electric, Inc.        Advanced Electric Motors, Inc.               100%                     200
</TABLE>

<PAGE>

                                    EXHIBIT B

                                   STOCK POWER

                               (EXECUTED IN BLANK)

<PAGE>

                                   STOCK POWER

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto             shares of the Common Stock of Advanced Electric Motors, Inc., a
     -----------
Delaware corporation (the "Corporation"), standing in the name of the
undersigned on the books of the Corporation represented by Certificate No.    ,
                                                                           ---
and does hereby irrevocably constitute and appoint                as
                                                   --------------
attorney-in-fact to transfer the shares on the books of the Corporation with
full power of substitution in the premises.

         Dated:
                ------

                                              HARBIN ELECTRIC, INC.

                                              By:
                                                 --------------------------
                                              Name:
                                              Title:

<PAGE>

                                 ACKNOWLEDGMENT

      The undersigned hereby acknowledges receipt of a copy of the foregoing
Share Pledge Agreement, agrees promptly to note on its books the security
interests granted under such Share Pledge Agreement, and waives any rights or
requirement at any time hereafter to receive a copy of such Pledge Agreement in
connection with the registration of any Pledged Collateral in the name of the
Collateral Agent or its nominee or the exercise of voting rights by the
Collateral Agent.

                                   ADVANCED ELECTRIC MOTORS, INC.

                                   By:
                                      ------------------------------------------
                                   Name:
                                   Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]