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Placement Agent Agreement
June
19, 2008
William
Blair & Company, L.L.C.
222
West Adams Street
Chicago,
Illinois 60606
ROTH
Capital Partners, LLC
24
Corporate Plaza
Newport
Beach, CA 92660
Ladies
and Gentlemen:
Section 1.
Appointment of Placement Agents. This
Placement Agent Agreement (this “Agreement”) confirms
our understanding that Harbin Electric, Inc., a Nevada corporation
(the “Company”), hereby appoints William Blair &
Company, L.L.C. and ROTH Capital Partners, LLC pursuant to the
terms of this Agreement as its exclusive placement agents (the
“Placement Agents”) in connection with the proposed
direct placement (the “Placement”) to certain investors
of up to three million five hundred thousand (3,500,000) shares
(the “Shares”) of the Company’s common stock, par
value $0.00001 per share (the “Common Stock”). On the
basis of the representations and warranties contained herein and
subject to the terms and conditions set forth herein, the Placement
Agents severally agree to use their respective commercially
reasonable efforts to assist the Company in its solicitation,
confirmation and receipt of offers to purchase the Shares. Such
efforts under this Agreement shall include providing administrative
services as reasonably requested by the Company in connection with
confirming orders of purchases of shares, collecting payment for
the shares and distributing the shares in the Placement, and
assisting the Company with (i) evaluating the structure of the
offering, (ii) negotiating the terms of the Placement, (iii)
soliciting indications of interest from potential purchasers and
(iv) allocating the shares in the Placement. Notwithstanding
anything to the contrary contained in this Agreement, neither
Placement Agent shall have any obligation to purchase any of the
Shares or, other than as a result of such Placement Agent’s
bad faith, wilful misconduct or gross negligence, any other
liability to the Company if any prospective purchaser (each a
“Purchaser”) fails to consummate a purchase of any of
the Shares. In the event that any Purchaser fails to consummate a
purchase of any of the Shares, the Placement Agents may use their
respective commercially reasonable efforts to solicit orders from
and confirm sales to other investors identified by the Company or
the Placement Agents.
Section 2.
Compensation. In
connection with the Placement and sale of the Shares
by
the Company, the Placement Agents will charge the Company a
placement fee (the “Placement Fee”) payable in
immediately available funds on the date of the consummation of the
Placement and sale of Shares (the “Closing Date”). The
Placement Fee shall be equal to six percent (6%) of the aggregate
price at which the Shares are sold by the Company in the Placement.
The Placement Agent expenses shall be paid out of the Placement
Fee, and thereafter the net amount shall be paid 66.665% to William
Blair & Company, L.L.C. and 33.335% to ROTH Capital Partners
LLC. The
parties acknowledge and agree that no fee shall be payable
hereunder unless the sale of Shares is consummated.
Section 3.
Representations and Warranties .
The Company represents and warrants to the Placement Agents
that:
(a)
This
Agreement has been duly authorized, executed and delivered by
the Company;
(b)
The
making and performance by the Company of this Agreement (i)
will not violate any provision of the Company’s charter
or bylaws and (ii) will not result in the breach, or be in
contravention, of any provision of any agreement, franchise,
license, indenture, mortgage, deed of trust, or other
instrument to which the Company or any subsidiary is a party
or by which the Company, any subsidiary or the property of any
of them may be bound or affected, or any order, rule or
regulation applicable to the Company or any subsidiary of any
court or regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, or any order
of any court or governmental agency or authority entered in
any proceeding to which the Company or any subsidiary was or
is now a party or by which it is bound, except in the case of
clause (ii) to the extent such breach or contravention would
not have a material adverse effect on the
Company.
(c)
No
consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated
herein, except for compliance with the Securities Act of 1933,
as amended (the “1933 Act”), and blue sky laws
applicable to the sale of the Shares.
Section 4.
Agreements.
(a)
The
Company agrees with the Placement Agents that, during the term
of this Agreement, if any event occurs or condition exists as
a result of which the Company's filings with the Securities
and Exchange Commission since January 1, 2008 (the "SEC
Filings") would include an untrue statement of a material
fact, or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, the Company will
promptly notify the Placement Agents of any such event,
condition or opinion of counsel to the Company and shall
prepare an amendment or supplement to any such filing that
will correct such statement or omission or effect such
compliance.
(b)
Each
of the parties hereto hereby agrees that it will comply with
all laws, rules and regulations applicable to it in conducting
the Placement and carrying out its obligations under this
Agreement.
Section 5.
Closing Documents. On
the Closing Date, the Company shall deliver to the Placement
Agents:
(a)
a
certificate of the chief executive officer and the principal
financial officer of the Company, dated as of the Closing
Date, to the effect that the representations and warranties of
the Company set forth in this Agreement are true and correct
as of the date of this Agreement and as of the Closing Date,
and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(b)
copies
of any other documents delivered to the Purchasers in
connection with the sale of the Shares; and
(c)
such
further certificates and documents as the Placement Agents may
reasonably request.
Section 6.
Exclusive Appointment .
The Company shall not, directly or indirectly, sell or offer to
sell any of the Shares or any substantially similar equity security
from the date hereof through the Closing Date. Any sale or
disposition of such Shares or any substantially similar equity
security by the Company during that period will be deemed to be as
if such sale or disposition were undertaken by the Placement Agents
directly for purposes of calculating the compensation due
hereunder.
Section 7.
Indemnity and Contribution.
(a)
The
Company agrees to indemnify and hold harmless each Placement
Agent and each person, if any, who controls either Placement
Agent within the meaning of the 1933 Act or the Exchange Act
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