Document:

Unassociated Document

 

Exhibit 10.1

 

VOTING SUPPORT AGREEMENT

This VOTING SUPPORT AGREEMENT is dated as of June 19, 2011 (this “Agreement”) and by and among Tech Full Electric Company Limited, a Cayman Islands exempted company with limited liability (“Parent”), Harbin Electric, Inc., a Nevada corporation (the “Company”), and the stockholders of the Company listed on Schedule A hereto (each a “Stockholder” and collectively, the “Stockholders”).  Capitalized terms used but not defined herein shall have the meanings ascribed them in the Merger Agreement (defined below).

 

RECITALS

 

WHEREAS, concurrently herewith, Parent, Tech Full Electric Acquisition, Inc., a Nevada corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “Merger”);

 

WHEREAS, each Stockholder is the “beneficial owner” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of such shares of common stock, par value $0.00001 per share, of the Company (“Shares”) as set forth opposite such Stockholder’s name on Schedule A hereto (with respect to each Stockholder, the “Owned Shares”) and agrees hereby to take certain actions with respect to the Owned Shares and any additional Shares of which such Stockholder acquires beneficial ownership after the date hereof, including, without limitation, by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities (such additional Shares, together with such Stockholder’s Owned Shares, such Stockholder’s “Covered Shares”);

 

WHEREAS, certain Stockholders party hereto intend and are obligated to contribute their Covered Shares to Parent in exchange for newly issued shares of Tianfu Investments Limited, a Cayman Islands exempted company with limited liability and the parent company of Parent, prior to the consummation of the Merger pursuant to the contribution agreement entered into in connection with the Merger Agreement (the “Contribution Agreement”);

 

WHEREAS, in order to induce Parent, the Company, and Merger Sub to enter into the Merger Agreement and consummate the transactions contemplated thereby, including the Merger, the Stockholders are entering into this Agreement; and

 

WHEREAS, the Stockholders acknowledge that Parent, the Company, and Merger Sub are entering into the Merger Agreement in reliance on the representations, warranties, covenants and other agreements of the Stockholders set forth in this Agreement.

  

  

  

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, the Company, and the Stockholders hereby agree as follows:

 

1.           Agreement to Vote.  Prior to the Termination Date (as defined herein), each Stockholder irrevocably and unconditionally agrees that he, she, or it shall at any meeting of the stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting), however called, or in connection with any written consent of stockholders of the Company (a) when a meeting is held, appear at such meeting or otherwise cause such Stockholder’s Covered Shares to be counted as present thereat for the purpose of establishing a quorum, and respond to each request by the Company or Special Committee for written consent, if any, (b) vote (or consent), or cause to be voted at such meeting (or validly execute and return and cause such consent to be granted with respect to), all such Stockholder’s Covered Shares in favor of the adoption of the Merger Agreement and approval of the principal terms of the Merger, and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement and (c) vote (or consent), or cause to be voted at such meeting (or validly execute and return and cause such consent to be granted with respect to), all such Stockholder’s Covered Shares against (1) any Acquisition Proposal (other than an Acquisition Proposal adopted and recommended to the Company's stockholders by the Company Board, acting upon the recommendation of the Special Committee) or (2) any action, proposal, transaction or agreement that would, based on advice of counsel, reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or of such Stockholder under this Agreement, in each case, except as required in accordance with the terms and conditions of the Merger Agreement.

 

2.           Grant of Irrevocable Proxy; Appointment of Proxy.

 

(a)           EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, THE COMPANY, THE SPECIAL COMMITTEE, AND ANY OTHER DESIGNEE OF THE COMPANY, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER’S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE COVERED SHARES AS INDICATED IN SECTION 1.  EACH STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTIONS OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY, AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH STOCKHOLDER WITH RESPECT TO THE COVERED SHARES (THE STOCKHOLDER REPRESENTING TO THE COMPANY THAT ANY SUCH PROXY IS NOT IRREVOCABLE).

 

(b)           The proxy granted in Section 2(a) shall automatically expire upon the termination of this Agreement.

  

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3.           No Inconsistent Agreements. Each Stockholder hereby covenants and agrees that, except as contemplated by this Agreement, neither such Stockholder nor any of his, her, or its Affiliates (a) has entered into, nor shall any of them enter into at any time prior to the Termination Date, any voting agreement or voting trust with respect to any Covered Shares and (b) has granted, nor shall any of them grant at any time prior to the Termination Date, a proxy or power of attorney with respect to any Covered Shares, in either case, which is inconsistent with such Stockholder’s obligations pursuant to this Agreement.

 

4.           Termination.  This Agreement shall terminate upon the earliest of (a) the Effective Time, (b) the termination of the Merger Agreement in accordance with its terms and (c) the written agreement of Parent and the Company to terminate this Agreement (such earliest date being referred to herein as the “Termination Date”); provided, that the provisions set forth in Sections 12 to 27 shall survive the termination of this Agreement; provided further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.

 

5.           Representations and Warranties of Stockholders.  Each Stockholder, severally and not jointly, hereby represents and warrants to the Company and Parent as follows:

 

(a)           Such Stockholder is the beneficial owner of, and has good and valid title to, the Covered Shares, free and clear of Liens other than as created by this Agreement or the Contribution Agreement.  Such Stockholder has sole voting power, sole power of disposition, sole power to demand dissenter's rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Covered Shares, with no limitations, qualifications or restrictions on such rights, subject to applicable United States federal securities Laws, Laws of the State of Nevada and Laws of the People’s Republic of China and the terms of this Agreement and the Contribution Agreement.  As of the date hereof, other than the Owned Shares, such Stockholder does not own, beneficially or of record, any securities of the Company or any direct or indirect interest in any such securities (including by way of derivative securities).  The Covered Shares are not subject to any voting trust agreement or other Contract to which such Stockholder is a party restricting or otherwise relating to the voting or Transfer of the Covered Shares other than the Contribution Agreement.  Such Stockholder has not appointed or granted any proxy or power of attorney that is still in effect with respect to any Covered Shares, except as contemplated by this Agreement.

  

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(b)           Each such Stockholder which is an entity is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; each such Stockholder who is a natural Person has full legal power and capacity to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming due authorization, execution and delivery by Parent and the Company, constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).  If such Stockholder is married, and any of the Covered Shares of such Stockholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse and, assuming due authorization, execution and delivery by Parent and the Company, constitutes a legal, valid and binding obligation of such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).

 

(c)           Except for the applicable requirements of the Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary on the part of such Stockholder for the execution, delivery and performance of this Agreement by such Stockholder or the consummation by such Stockholder of the transactions contemplated hereby and (ii) neither the execution, delivery or performance of this Agreement by such Stockholder nor the consummation by such Stockholder of the transactions contemplated hereby nor compliance by such Stockholder with any of the provisions hereof shall (A) conflict with or violate any provision of the organizational documents of any such Stockholder which is an entity, (B) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on property or assets of such Stockholder pursuant to, any Contract to which such Stockholder is a party or by which such Stockholder or any property or asset of such Stockholder is bound or affected, or (C) violate any order, writ, injunction, decree, statute, rule or regulation applicable to such Stockholder or any of such Stockholder’s properties or assets.

 

(d)           There is no action, suit, investigation, complaint or other proceeding pending against any such Stockholder or, to the knowledge of such Stockholder, any other Person or, to the knowledge of such Stockholder, threatened against any Stockholder or any other Person that restricts or prohibits (or, if successful, would restrict or prohibit) the performance by such Stockholder of its obligations under this Agreement.

 

(e)           Such Stockholder understands and acknowledges that the Company is entering into the Merger Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties of such Stockholder contained herein.

  

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6.           Representations and Warranties of the Company and Parent.

 

(a)           The Company hereby represents and warrants to Parent and each Stockholder that (i) the Company has all necessary corporate power and authority to execute, deliver and perform its obligations under this Agreement, (ii) the execution and delivery of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of the Company, and (iii) no other corporate proceedings on the part of the Company are necessary to approve this Agreement or to consummate the transactions contemplated hereby.

 

(b)           Parent hereby represents and warrants to the Company and each Stockholder that (i) Parent has all necessary corporate power and authority to execute, deliver and perform its obligations under this Agreement, (ii) the execution and delivery of this Agreement and the consummation by Parent of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of Parent, and (iii) no other corporate proceedings on the part of Parent are necessary to approve this Agreement or to consummate the transactions contemplated hereby.

 

7.           Certain Covenants of Stockholder.  Each Stockholder, severally and not jointly, hereby covenants and agrees as follows:

 

(a)           Prior to the Termination Date, and except as contemplated hereby, such Stockholder shall not (i) tender any Covered Shares into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, encumber, assign or otherwise dispose of (collectively “Transfer”), or enter into any contract, option, agreement or other arrangement or understanding (other than the Contribution Agreement) with respect to the Transfer of any of the Covered Shares or beneficial ownership or voting power thereof or therein (including by operation of Law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares, or (iv) knowingly take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing its obligations under this Agreement.  Any purported Transfer in violation of this provision shall be void.  Such Stockholder further agrees to authorize and request the Company to notify the Company’s transfer agent that there is a stop transfer order with respect to all of the Covered Shares and that this Agreement places limits on the voting of the Covered Shares.  If so requested by the Company, such Stockholder agrees that the certificates representing the Covered Shares shall bear a legend stating that they are subject to this Agreement and to the irrevocable proxy granted in Section 2(a).

 

(b)           Prior to the Termination Date, such Stockholder shall promptly notify the Company of the number of any new Shares with respect to which beneficial ownership is acquired by such Stockholder, including, without limitation, by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities of the Company, if any, after the date hereof.  Any such Shares shall automatically become subject to the terms of this Agreement, and Schedule A shall be deemed adjusted accordingly.

  

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8.           Stockholder Capacity.  This Agreement is being entered into by each Stockholder solely in his, her, or its capacity as a stockholder of the Company, and nothing in this Agreement shall restrict or limit the ability of any Stockholder who is a director or officer of the Company from discharging (in his or her capacity as a director or officer) his or her fiduciary duties to the other stockholders of the Company under applicable Law; provided that nothing in this Section 8 shall relieve or be deemed to relieve such Stockholder from his or her obligations under Section 1.

 

9.           Waiver of Dissenter’s Rights.  Each Stockholder hereby waives any rights of appraisal or rights to dissent from the Merger that such Stockholder may have under the NRS.

 

10.         Disclosure.  Each Stockholder hereby authorizes Parent and the Company to publish and disclose in any announcement or disclosure required by the SEC and in the Proxy Statement such Stockholder’s identity and ownership of the Covered Shares and the nature of such Stockholder’s obligations under this Agreement.

 

11.         Further Assurances.  From time to time, at the request of the Company and without further consideration, each Stockholder shall take such further action as may reasonably be necessary or desirable to consummate and make effective the transactions contemplated by this Agreement.

 

12.         Non-Survival of Representations and Warranties.  The representations and warranties of the Stockholders contained herein shall not survive the Closing.

 

13.         Amendment and Modification.  This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing signed on behalf of each party and otherwise as expressly set forth herein, and to admit as Stockholder-parties to this Agreement any persons who become party to the Contribution Agreement after the date hereof, which admissions shall be effective, with no further action required on the part of any other party hereto, on execution by such persons of signature pages to the Contribution Agreement.

 

14.         Waiver.  No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder.  Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party.

  

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15.         Notices.  All notices and other communications hereunder shall be in writing (in both the English and Chinese languages) and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e-mail, upon written confirmation of receipt by facsimile or e-mail, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered to the addresses set forth below or, with respect to the Stockholders, on Schedule A, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

(i)            If to a Stockholder, in accordance with the contact information set forth next to such Stockholder’s name on Schedule A.

 

(ii)           If to Parent:

 

c/o Harbin Electric, Inc.

No. 9 Ha Ping Xi Lu,

Ha Ping Lu Ji Zhong Qu

Harbin Kai Fa Qu,

Harbin,

People’s Republic of China

150060

Attention: Mr. Tianfu Yang

Facsimile: +86 (451) 8611 6769

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

30th Floor, China World Office 2

1 Jianguomenwai Avenue

Beijing 100004, PRC

Attention: Michael V. Gisser

     Peter X. Huang

Facsimile: +86 10 6535 5577

E-mail:  Michael.Gisser@skadden.com

 Peter.Huang@skadden.com

 

(iii)           If to the Company:

 

Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu, Ha Ping Lu Ji Zhong Qu

Harbin Kai Fa Qu, Harbin, China 150060

Attention:  Mr. Tianfu Yang and Ms. Christy Shue

Facsimile:  +86 451 8611 6769

E-mail:  manager@tech-full.com

              cshue@harbinelectric.com

  

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with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067

Attention:  Jonathan K. Layne

Facsimile:  (310) 552-7053

E-mail:  JLayne@gibsondunn.com

and

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Attention: Angela Dowd

Facsimile: (646) 514-2919

E-mail: ADowd@loeb.com

 

16.         Entire Agreement.  This Agreement (together with the Merger Agreement and the Contribution Agreement to the extent referred to in this Agreement) constitutes the entire agreement, and supersedes all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter hereof and thereof.

 

17.         No Third-Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement, except as specifically set forth in this Agreement.

 

18.         Governing Law.  This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal Laws of the State of Nevada, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Nevada.

  

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19.         Submission to Jurisdiction.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the courts of the State of Nevada located in Clark County, Nevada or the federal courts of the United States of America located in Clark County, Nevada.  Each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby.  Each of the parties agrees not to commence or maintain any action, suit or proceeding relating thereto except in the courts described above, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Nevada as described herein.  Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Nevada as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

20.         Assignment; Successors.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of Law or otherwise, by any party without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns.

 

21.         Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the State of Nevada located in Clark County, Nevada or any federal court located in Clark County, Nevada, this being in addition to any other remedy to which such party is entitled at Law or in equity.  Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at Law would be adequate, and (ii) any requirement under any Law that a party seeking equitable relief hereunder post security as a prerequisite to obtaining such equitable relief.  The rights of the Company hereunder may be enforced by the Special Committee.

 

22.         Severability.  Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

  

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23.         Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

24.         Counterparts.  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party; provided, however, that if any of the Stockholders fails for any reason to execute, or perform their obligations under, this Agreement, this Agreement shall remain effective as to all parties executing this Agreement.

 

25.         Confidentiality.  The Stockholders (other than Abax Lotus Ltd. and Abax Nai Xin A Ltd.) agree (a) to hold any non-public information regarding this Agreement and the Merger in strict confidence and (b) except as required by Law or legal process not to divulge any such non-public information to any third Person.

 

26.         Headings. The section headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

27.         No Presumption Against Drafting Party.  Each of the parties to this Agreement acknowledges that it has been represented by independent counsel in connection with this Agreement and the transactions contemplated by this Agreement.  Accordingly, any rule of Law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.

 

[The remainder of this page is intentionally left blank.]

  

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IN WITNESS WHEREOF, Parent, the Company, and the Stockholders have caused to be executed or executed this Agreement as of the date first written above.

	
PARENT

	  
	
TECH FULL ELECTRIC COMPANY

	
LIMITED,

	
a Cayman Islands exempted company

	  	  
	
By:

	
/s/ Tianfu Yang

	Name:	 Tianfu Yang
	Title:	  Director

	
COMPANY

	  	  
	
By:

	
/s/ Boyd. R. Plowman

	Name: Boyd. R. Plowman
	Title: Chairman, Special Committee of the Board of Directors

 

	  	
STOCKHOLDERS:

	  	  
	  	/s/ Tianfu Yang
	  	
Tianfu Yang

	  	  
	  	 
/s/ Tianli Yang

	  	
Tianli Yang

	  	  
	  	 
/s/ Zedong Xu

	  	
Zedong Xu

	  	  
	  	 
/s/ Suofei Xu

	  	
Suofei Xu

	  	  
	  	 
/s/ Lanxiang Gao

	  	
Lanxiang Gao

 

[Signature Page to Voting Support Agreement]

  

 

  

	  	
HERO WAVE INVESTMENTS LIMITED

	  	  
	  	
By:

	
 
/s/ Tianfu Yang

	  	
Name: Tianfu Yang

	  	
Title: Director

 

[Signature Page to Voting Support Agreement]

  

 

  

	  	
ABAX LOTUS LTD.

	  	  
	  	
By:

	
/s/ Donald Xiang Dong Yang

	  	
Name: Donald Xiang Dong Yang

	  	
 
Title: Director

	  	
ABAX NAI XIN A LTD.

	  	  
	  	
By:

	 
/s/ Donald Xiang Dong Yang

	  	
Name: Donald Xiang Dong Yang

	  	
 
Title: Director

 

[Signature Page to Voting Support Agreement]

  

 

  

Schedule A

	
Stockholder Name

	 	
Address

Facsimile

	 	
Owned Shares

	 
	
Tianfu Yang

	 	
c/o Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu

Ha Ping Lu Ji Zhong Qu, Harbin, PRC 150060

+86 (451) 8611 6769

	 	 	7,000,000	 
	
Hero Wave Investments Limited

	 	
Xi Yuan 17-5, Wan Cheng Hua Fu,

Wan Liu Xi Lu, Hai Dian Qu,

Beijing, China 100089

+86 (451) 8611 6769

	 	 	2,633,354	 
	
Tianli Yang

	 	
c/o Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu

Ha Ping Lu Ji Zhong Qu, Harbin, PRC 150060

+86 (451) 8611 6769

	 	 	500,000	 
	
Zedong Xu

	 	
c/o Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu

Ha Ping Lu Ji Zhong Qu, Harbin, PRC 150060

+86 (451) 8611 6769

	 	 	350,000	 
	
Suofei Xu

	 	
c/o Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu

Ha Ping Lu Ji Zhong Qu, Harbin, PRC 150060

+86 (451) 8611 6769

	 	 	400,000	 
	
Lanxiang Gao

	 	
c/o Harbin Electric, Inc.

No. 9, Ha Ping Xi Lu

Ha Ping Lu Ji Zhong Qu, Harbin, PRC 150060

+86 (451) 8611 6769

	 	 	120,000	 
	
Abax Lotus Ltd.

	 	
c/o Abax Global Capital (Hong Kong) Limited

Attention: Donald Xiang Dong Yang

Two International Finance Centre

Suite 6708, 8 Finance St., Central, Hong Kong

+(852) 3602 1700

	 	 	1,225,553	 
	
Abax Nai Xin A Ltd.

	 	
c/o Abax Global Capital (Hong Kong) Limited

Attention: Donald Xiang Dong Yang

Two International Finance Centre

Suite 6708, 8 Finance St., Central, Hong Kong

+(852) 3602 1700

	 	 	466,467	 

 

[Schedule A to Voting Support Agreement]Unassociated Document

Exhibit 10.2

   

LIMITED GUARANTEE

 

LIMITED GUARANTEE, dated as of June 19, 2011 (this “Limited Guarantee”), by Mr. Tianfu Yang (“Mr. Yang”), Abax Global Opportunities Fund, AGC Asia 5 Ltd. and Prosper Expand Ltd. (collectively “Abax” and, together with Mr. Yang, the “Guarantors” and each, a “Guarantor”) in favor of Harbin Electric, Inc., a Nevada corporation (the “Guaranteed Party”).

 

1.           GUARANTEE.  (a) To induce the Guaranteed Party to enter into that certain Agreement and Plan of Merger, dated as of June 19, 2011 (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), by and among the Guaranteed Party, Tech Full Electric Company Limited, a Cayman Islands exempted company with limited liability (“Parent”) and Tech Full Electric Acquisition, Inc., a Nevada corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Guaranteed Party, each Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party, severally but not jointly nor jointly and severally, as a primary obligor and not merely as a surety, the due and punctual performance and discharge of all of the payment obligations of Parent and Merger Sub pursuant to Section 7.3(c) of the Merger Agreement (the “Obligations”); provided that, notwithstanding anything to the contrary contained in this Limited Guarantee, in no event shall a Guarantor’s aggregate liability under this Limited Guarantee exceed such Guarantor’s respective percentage, as set forth opposite its name on Annex A hereto, of US$30,000,000 (the “Maximum Amount”).  The Guaranteed Party hereby agrees that the provisions of Section 7.3(c) of the Merger Agreement shall, for purposes of this Limited Guarantee, be construed as such Section is in effect on the date hereof, unless, in any case, any modifications thereto are consented to by each Guarantor.  No Guarantor shall have any obligations or liability to any Person relating to, arising out of or in connection with this Limited Guarantee other than as expressly set forth herein.  Capitalized terms used but not defined in this Limited Guarantee shall have the meanings assigned to such terms in the Merger Agreement.

 

(b)           Subject to the terms and conditions of this Limited Guarantee, if Parent or Merger Sub fails to pay the Obligations when due, then all of the Guarantor’s liabilities to the Guaranteed Party hereunder in respect of such Obligations shall become immediately due and payable and the Guaranteed Party may, at the Guaranteed Party’s option, take any and all actions available hereunder or under applicable Law to collect such Obligations from the Guarantors (subject to each Guarantor’s Maximum Amount).  In furtherance of the foregoing, the Guarantors acknowledge that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against the Guarantors for the full amount of the Obligations (subject to each Guarantor’s Maximum Amount), regardless of whether any action is brought against Parent or Merger Sub.  Each Guarantor agrees, severally but not jointly nor jointly and severally, to pay on demand its pro rata portion (based on the percentages set forth on Annex A hereto) of all reasonable and documented out-of-pocket expenses (including reasonable fees and expenses of counsel) incurred by the Guaranteed Party in connection with the enforcement of its rights hereunder, which amounts, if paid, will be in addition to the Obligations and not included within a determination of the Maximum Amount.

  

  

  

 

2.          NATURE OF GUARANTEE.  The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantors’ obligations hereunder.  In the event that any payment to the Guaranteed Party in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantors shall remain liable hereunder with respect to such Obligations as if such payment had not been made.  This is an unconditional guarantee of payment and not of collectibility.  Each Guarantor reserves the right to assert defenses which Parent or Merger Sub may have to payment of any Obligations, other than defenses arising from the bankruptcy or insolvency of Parent or Merger Sub and other defenses expressly waived hereby.

 

3.          CERTAIN WAIVERS.  Each Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of such Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with the Parent or the Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party, the Parent or the Merger Sub without in any way impairing or affecting each Guarantor’s obligations under this Limited Guarantee.  Each Guarantor agrees that the obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against the Parent, the Merger Sub, or any other person interested in the transactions contemplated by the Merger Agreement; (b) change in the time, place or manner of payment of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms of the Merger Agreement or any other agreement evidencing, securing or otherwise executed by the Parent, the Merger Sub and the Guaranteed Party in connection with the Obligations; (c) any change in the corporate existence, structure or ownership of the Parent, the Merger Sub, or any other person interested in the transactions contemplated by the Merger Agreement; (d) any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Parent, the Merger Sub or any other person interested in the transactions contemplated by the Merger Agreement; (e) any lack of validity or enforceability of the Merger Agreement or any agreement or instrument relating thereto; (f) the existence of any claim, set-off or other right which such Guarantor may have at any time against the Parent, the Merger Sub or the Guaranteed Party, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Obligations.  To the fullest extent permitted by law, each Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party.   Each Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of the incurrence of any Obligations and all other notices of any kind, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshaling of assets of any person interested in the transactions contemplated by the Merger Agreement, and all suretyship defenses generally, including, without limitation, any event, condition or circumstance that might be construed to constitute, an equitable or legal discharge of such Guarantor’s obligations hereunder.  Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.

  

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Each Guarantor hereby covenants and agrees that it shall not institute, and shall cause its respective affiliates not to institute, any proceeding asserting that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to (i) the effects of insolvency, bankruptcy, reorganization or other similar proceedings and (ii) general equitable principles (whether considered in a proceeding in equity or at law).

 

The Guaranteed Party hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause all of its Related Persons (as defined below) not to institute, any proceeding or bring any other claim (whether in tort, contract or otherwise) arising under, or in connection with, the Merger Agreement, the Abax Equity Financing or the transactions contemplated thereby against the Guarantors or any Non-Recourse Party (as defined below), except for claims against the Guarantors under this Limited Guarantee (subject to the limitations contained herein).

 

4.          NO WAIVER; CUMULATIVE RIGHTS.  No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder.  Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time.

 

5.          REPRESENTATIONS AND WARRANTIES.  Each Guarantor (other than, in the case of the representation and warranties contained in Sections 5(a) and 5(b)(i), Mr. Yang) hereby represents and warrants to the Guaranteed Party that:

 

(a)          such Guarantor is a legal entity duly organized and validly existing under the laws of its jurisdiction of organization;

 

(b)          the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene (i) any provision of such Guarantor’s charter documents, partnership agreement, operating agreement or similar organizational documents or (ii) any law, regulation, rule, decree, order, judgment or contractual restriction binding on such Guarantor or its assets;

 

(c)          all consents, approvals, authorizations and permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by such Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required from such Guarantor in connection with the execution, delivery or performance of this Limited Guarantee;

 

(d)          this Limited Guarantee constitutes a legal, valid and binding obligations of such Guarantor enforceable against such Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and

  

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(e)          (i) each Guarantor is solvent and shall not be rendered insolvent as a result of its execution and delivery of this Limited Guarantee or the performance of its obligations hereunder, (ii) each Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and (iii) all funds necessary for each Guarantor to fulfill its obligations under this Limited Guarantee shall be available to such Guarantors for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

 

6.          NO ASSIGNMENT.  Neither the Guarantors nor the Guaranteed Party may assign its rights, interests or obligations hereunder to any other Person (except by operation of law) without the prior written consent of the other party hereto; provided, however, that each Guarantor may assign all or a portion of its obligations hereunder, with prior written notice to the Guaranteed Party accompanied by a guarantee in the form identical to this Limited Guarantee duly executed and delivered by the assignee, to an affiliate or to an entity managed or advised by an affiliate of such Guarantor; provided, further, that no such assignment shall relieve such Guarantor of any liability or obligations hereunder except to the extent actually performed or satisfied by the assignee.

 

7.          NOTICES.  All notices, requests and other communications to any party hereunder shall be given in the manner specified in the Merger Agreement (and shall be deemed given as specified therein) as follows:

 

	
If to Mr. Yang, to:

	  	  
	
Attention:

	
Mr. Tianfu Yang

	  	  
	
Address:

	
c/o Harbin Electric, Inc.

	  	
No. 9 Ha Ping Xi Lu, Ha Ping Lu Ji Zhong Qu

	  	
Harbin Kai Fa Qu, Harbin, People’s Republic of China 150060

	  
	
Facsimile No.: +86 (451) 8611 6794

	  
	
with a copy to:

	  
	
Attention:

	
Michael V. Gisser / Peter X. Huang

	 	 
	
Address:

	
c/o Skadden, Arps, Slate, Meagher & Flom LLP

	  	
30th Floor, China World Office 2

	  	
1 Jianguomenwai Avenue

	  	
Beijing 100004, PRC

	  
	
Facsimile No.: +86 10 6535 5577

	  	  
	
If to Abax, to:

	  
	  	  
	
Attention:

	
Donald Xiang Dong Yang

	 	 
	
Address:

	
c/o Abax Global Capital (Hong Kong) Limited

	  	
Suite 6708, 67/F, Two International Finance Centre

	  	
8 Finance Street

	  	
Central, Hong Kong

	  
	
Facsimile No.: +852 3602 1700

  

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with a copy to:

	  
	  	  
	
Attention:

	
Mark J. Lehmkuhler

	 	 
	
Address:

	
c/o Davis Polk & Wardwell

	  	
18th Floor, The Hong Kong Club Building

	  	
3A Chater Road

	  	
Central, Hong Kong

	  	  
	
Facsimile No.: +852 2533 3388

 

or to such other address or facsimile number as the Guarantor shall have notified the Guaranteed Party in a written notice delivered to the Guaranteed Party in accordance with the Merger Agreement.  All notices to the Guaranteed Party hereunder shall be given as set forth in the Merger Agreement.

 

8.          CONTINUING GUARANTEE.  This Limited Guarantee shall remain in full force and effect and shall be binding on each Guarantor, its successors and assigns until the Obligations have been satisfied in full.  This Limited Guarantee will terminate, and be of no further force or effect, immediately following the earliest of (i) the Closing, (ii) the termination of the Merger Agreement in accordance with its terms by mutual consent of the parties thereto or under circumstances in which Parent would not be obligated to make any payment under the Merger Agreement and (iii) 90 days following the termination of the Merger Agreement in accordance with its terms under circumstances in which Parent would be obligated to make a payment pursuant to Section 7.3(c) of the Merger Agreement unless a claim for such a payment has been made in writing prior thereto (unless tendering such a writing would expressly violate, or would be prohibited by, any applicable requirement of law, in which case, the foregoing period shall toll for so long as such violation or prohibition is in effect).  Notwithstanding the foregoing, (1) the parties hereto acknowledge and agree that this Limited Guarantee shall not terminate for so long as a claim made in accordance with clause (iii) above remains unresolved, and (2) in the event that the Guaranteed Party or any of its controlled affiliates asserts in any litigation or other proceeding that the provisions of this Limited Guarantee limiting each Guarantor’s liability to the Maximum Amount are illegal, invalid or unenforceable in whole or in part, or asserts any theory of liability against any Non-Recourse Party or, other than its rights to recover from the Guarantors with respect to the Obligations, the Guarantors, Parent or Merger Sub with respect to the transactions contemplated by the Merger Agreement, then (x) the obligations of the Guarantors under this Limited Guarantee shall terminate ab initio and be null and void, (y) if a Guarantor has previously made any payments under this Limited Guarantee, such Guarantor shall be entitled to recover such payment(s) and (z) neither the Guarantors nor any Non-Recourse Party shall have any liability to the Guaranteed Party with respect to the Merger Agreement and the transactions contemplated thereby, the Abax Equity Financing or under this Limited Guarantee.

  

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9.          NO RECOURSE.

 

 (a)         The Guaranteed Party acknowledges that the sole assets of Parent and Merger Sub are its rights under the Merger Agreement and the Financing Documents, and that no funds are expected to be contributed to either Parent or Merger Sub unless and until the Closing occurs.  Notwithstanding anything that may be expressed or implied in this Limited Guarantee or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party covenants, agrees and acknowledges that no Person (other than the Guarantors and any permitted assignees thereof) have any obligations under this Limited Guarantee and that, notwithstanding that the Guarantors may be partnerships or limited liability companies, the Guaranteed Party has no right of recovery under this Limited Guarantee, or any claim based on such obligations against, and no personal liability shall attach to, the former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, members, or affiliates of the Guarantors, Merger Sub or Parent, or any former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, members, or affiliates of any of the foregoing, excluding however any such persons that constitute a Guarantor hereunder or an assignee thereof (collectively, each of the non-excluded parties, a “Non-Recourse Party”), through Parent or Merger Sub or otherwise, whether by or through attempted piercing of the corporate (or limited partnership or limited liability company) veil, by or through a claim by or on behalf of Parent or Merger Sub against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise, except in each case for its right to recover from the Guarantors and any permitted assignees under and to the extent provided in this Limited Guarantee and subject to the limitations set forth herein.

 

(b)          Recourse against the Guarantors and their permitted assignees under and pursuant to the terms of this Limited Guarantee shall be the sole and exclusive remedy of the Guaranteed Party and all of its Related Persons against the Guarantors and the Non-Recourse Parties in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement, the Abax Financing Commitment or the transactions contemplated thereby.  Nothing set forth in this Limited Guarantee shall affect or be construed to affect any liability of Parent or Merger Sub to the Guaranteed Party under the Merger Agreement or otherwise or give or shall be construed to confer or give to any person other than the Guaranteed Party any rights or remedies against any person, except as expressly set forth in this Limited Guarantee.

 

(c)          For the purposes of this Limited Guarantee, pursuit of a claim against a Person by the Guaranteed Party or any Related Person of the Guarantee Party shall be deemed to be pursuit of a claim by the Guaranteed Party.  A Person shall be deemed to have pursued a claim against another Person if such first Person brings a legal action against such second Person, adds such second Person to an existing legal proceeding or otherwise asserts a legal claim of any nature against such second Person.

 

(d)          For the purposes of this Limited Guarantee, the term “Related Person” shall mean, with respect to any person, any controlled affiliate of such person, but shall not include Parent, Merger Sub or any of their controlled affiliates.

 

10.        RELEASE.  By its execution of this Limited Guarantee, the Guaranteed Party hereby covenants and agrees that (a) neither the Guaranteed Party nor any of its Related Persons, and the Guaranteed Party agrees to the maximum extent permitted by law, none of its officers, directors, security holders or representatives, has or shall have any right of recovery against any Guarantor or any Non-Recourse Party under the Merger Agreement, or the transactions contemplated thereby or otherwise relating thereto, and to the extent that it has or obtains any such right it, to the maximum extent permitted by law, hereby waives (on its own behalf and on behalf of each of the aforementioned persons) each and every such right against, and hereby releases, the Guarantor and each Non-Recourse Party from and with respect to any claim, known or unknown, now existing or hereafter arising, in connection with any transaction contemplated by or otherwise relating to the Merger Agreement or the transactions contemplated thereby or hereby, whether by or through attempted piercing of the corporate (limited partnership or limited liability company) veil, by or through a claim by or on behalf of Parent, Merger Sub or any other person against any Non-Recourse Party, or otherwise under any theory of law or equity (the “Released Claims”), other than (i) claims against the Parent and the Merger Sub and (ii) claims against the Guarantors and their permitted assignees pursuant to this Limited Guarantee (subject to the limitations set forth herein) and (b) recourse against the Guarantors and their permitted assignees under this Limited Guarantee (subject to the limitations set forth herein) shall be the sole and exclusive remedy of the Guaranteed Party against the Guarantors or any Non-Recourse Party (other than Parent and Merger Sub) with respect to the Released Claims.

  

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11.        AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this Limited Guarantee will be valid and binding unless it is in writing and signed, in the case of an amendment, by each Guarantor and the Guaranteed Party, or in the case of waiver, by the party against whom the waiver is to be effective.  No waiver by any party of any breach or violation of, or default under, this Limited Guarantee, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation or default hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

12.        ENTIRE AGREEMENT. This Limited Guarantee constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among Parent, Merger Sub and the Guarantors or any of their respective affiliates on the one hand, and the Guaranteed Party or any of its affiliates on the other hand.

 

13.        GOVERNING LAW; SUBMISSION TO JURISDICTION.  This Limited Guarantee and all claims and defenses arising out of or relating to this Limited Guarantee or the breach, termination or validity of this Limited Guarantee, shall in all respects be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice of law or other conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.  The parties hereto hereby (a) submit for itself and its property to the exclusive jurisdiction of any state court sitting in New York City or any federal court sitting in the Southern District of New York for the purpose of any action arising out of or relating to this letter agreement brought by any party hereto, (b) consents that any such action may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction of any such action in such court or that such court is an inconvenient forum for the action and agrees not to assert, plead or claim the same; (c) agrees that the final judgment of such court shall be enforceable in any court having jurisdiction over the relevant party or any of its assets; (d) irrevocably waives any right to remove any such action from the state court sitting in New York City or any federal court sitting in the Southern District of New York to any other court; (e) agrees that service of process in any such action may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at the address set forth in Section 7 of this Limited Guarantee); and (vi) agrees that nothing in this Limited Guarantee shall affect the right to effect service of process in any other manner permitted by the applicable rules of procedure.

  

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14.        WAIVER OF JURY TRIAL.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS LIMITED GUARANTEE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND  EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LIMITED GUARANTEE OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.  EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY HERETO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY HERETO MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HERETO HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTEE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF THIS SECTION 14.  ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS LIMITED GUARANTEE WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

15.        NO THIRD PARTY BENEFICIARIES.   Except for the rights of Non-Recourse Parties provided hereunder, the parties hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Limited Guarantee and the Merger Agreement, and this Limited Guarantee is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.

 

16.        COUNTERPARTS.  This Limited Guarantee may be signed in any number of counterparts and may be executed and delivered by facsimile, email or other electronic transmission, and each counterpart shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Limited Guarantee shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto.  Until and unless each party has received a counterpart hereof signed by the other party hereto, this Limited Guarantee shall have no effect and no party shall have any right or obligations hereunder (whether by virtue of any other oral or written agreement or other communication).

 

17.        SEVERABILITY.  If any term or other provision of this Limited Guarantee is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Limited Guarantee shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party; provided, however, that this Limited Guarantee may not be enforced against any Guarantor without giving effect to the Maximum Amount of such Guarantor or the provisions set forth in Sections 3, 9 and 10. No party hereto shall assert, and each party shall cause its respective Related Persons not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.  Upon a determination that any term or provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Limited Guarantee so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

18.        HEADINGS.  Headings are used for reference purposes only and do not affect the meaning or interpretation of this Limited Guarantee.

 

[Remainder of page intentionally left blank; Signature page follows]

  

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IN WITNESS WHEREOF, the Guarantors and the Guaranteed Party have caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

	  	
Mr. TIANFU YANG

	 	 
	  	By: 	
/s/ Tianfu Yang

 

[Signature Page to Limited Guarantee]

 

  

  

  

	  	
ABAX GLOBAL OPPORTUNITIES FUND

	  	  	  
	  	
By:

	

/s/ Donald Xiang Dong Yang

	  	  	
Name: Donald Xiang Dong Yang

	  	  	
Title:   Director

	  	
AGC ASIA 5 LTD.

	  	  	  
	  	
By:

	

/s/ Donald Xiang Dong Yang

	  	  	
Name: Donald Xiang Dong Yang

	  	  	
Title:   Director

	  	
PROSPER EXPAND LTD.

	  	  
	  	
By:

	
Abax Global Capital, its Investment

Manager

	  	  	  
	  	
By:

	

/s/ Donald Xiang Dong Yang

	  	  	
Name: Donald Xiang Dong Yang

	  	  	
Title:   Authorized Signatory

 

[Signature Page to Limited Guarantee]

 

  

  

  

 

Accepted and Agreed to:

 

HARBIN ELECTRIC, INC.

	
By:

	
/s/ Boyd R. Plowman

	  
	  	
Name: Boyd R. Plowman

	  
	  	
Title: Chairman, Special Committee of the Board of Directors

	  

 

[Signature Page to Limited Guarantee]

 

  

  

  

 

Annex A

 

	
Guarantor

	 	
Percentage of Obligations

	 
	  	 	 	 
	
Mr. Tianfu Yang

	 	 	74.4	%
	
Abax Global Opportunities Fund

	 	 	13.1	%
	
AGC Asia 5 Ltd.

	 	 	9.2	%
	
Prosper Expand Ltd.

	 	 	3.3	%
	
Total

	 	 	100	%

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