Exhibit 10.1
AMENDED AND RESTATED SHARE TRANSFER AGREEMENT
THIS AMENDED AND
RESTATED SHARE TRANSFER AGREEMENT (this "Amended and
Restated Agreement), dated as of January
12, 2005 as amended and restated as of
May 12, 2005, by and among Harbin Tech Full
Industry Co., Ltd., ("Party A"),
Harbin Tech Full Electric Co., Ltd. ("Party
B") and Harbin Electric, Inc.
WHEREAS, Party A
and Party B were parties to the Share Transfer Agreement
dated as of January 12, 2005 (the "Original
Agreement");
WHEREAS, Party A
and Party B are companies organized under the laws of the
People's Republic of China ("PRC");
WHEREAS, Party A
and Baldor Electric Company ("Baldor") entered into a
Joint Venture Contract dated May 20, 2004
(the "JV Agreement") to jointly
establish a company known as Sino-Foreign
Cooperative USA Baldor-Tech Full
Electric (Harbin) Company Limited (the "JV
"), of which Party A owns 65%;
WHEREAS, under
the terms of the Joint Venture, HTFIC receives 55% of the
profits from the Joint Venture with the
remainder of the profits going to
Baldor. The purpose of the Joint Venture is
to manufacture and market electric
motors and related equipment in China;
WHEREAS, the
Original Agreement provided that Party A would transfer its
interest of sixty-five percent of the JV's
equity ownership and all associated
rights with respect to the JV to Party B in
exchange for Party B to cause it's
to be formed public parent ("Pubco") to
issue 1,000,000 shares of Pubco to Party
A;
WHEREAS, Pubco
became a US public company on January 24, 2005 and changed
its name to Harbin Electric, Inc. ("Harbin
Electric") on January 26, 2005;
WHEREAS, Harbin
Electric agreed to the issuance of the 1,000,000 shares on
February 16, 2004;
WHEREAS, based
upon the valuation of the JV by an SEC registered appraiser,
Party B and Harbin Electric discovered that
the number of shares issued under
the Original Agreement should have been
786,885; and
WHEREAS, Party
A, Party B and Harbin Electric, each desire to amend and
restate the Original Agreement in its
entirety to amend the amount of shares to
be issued in exchange for Party A's equity
interest in the JV and to make
certain other changes. The Original
Agreement shall be of no further force and
effect.
NOW, THEREFORE,
in consideration of the mutual promises and covenants set
forth herein, and intending to be legally
bound hereby, Party A, Party B and
Harbin Electric agree as follows:
ARTICLE I
DEFINITIONS
Unless it is
decided by law, regulations, other legally binding principles,
rules, orders, and notice, or it is decided
otherwise in this Amended and
Restated Agreement, the terms and titles in
this Amended and Restated Agreement
shall have the following meanings:
<PAGE>
1.1 "Shareholder's Right" shall mean
all of the JV shareholder's rights
under the laws of the PRC.
1.2 "Interest, Benefit, Claims, and
Other Rights Associated with the
Shareholder's Right" shall mean all other rights and benefits
that
Party A is entitled to as a shareholder other than the rights
as
described in 1.1.
ARTICLE II
TRANSFER OF SHARES
2.1 Party A shall transfer its entire
ownership in the JV to Party B
according to the terms and conditions in this Amended and
Restated
Agreement, as well as the Shareholder's Right and all the
Interest,
Benefit, Claims and Other Rights associated with the
Shareholder's
Right. Furthermore, Party A shall transfer all of its rights,
benefits
and obligations under the JV Agreement to Party B according to
the
terms and conditions in this Amended and Restated Agreement.
ARTICLE III
CONSIDERATION
3.1 Harbin Electric will deliver to
Party A, 786,885 shares of its common
stock, par value $0.00001 (the "Shares"). The Shares shall be
issued
to Party A or its designated third party.
ARTICLE IV
TAXATION
4.1 All taxation and fees relating to
the transfer and performance of this
Amended and Restated Agreement are pursuant to the current
taxation
policies under applicable laws of PRC. Party A warrants that
under
laws of the PRC, the transfer of equity ownership hereto is a tax
free
event.
ARTICLE V
EFFECTIVENESS
5.1 This Amended and Restated
Agreement shall come into effect upon the
execution hereof by all the parties hereto.
ARTICLE VI
TERMINATION
6.1 Party A has the right to terminate
this Amended and Restated Agreement
