HARBIN ELECTRIC, INC. A US Public Company. Stock Symbol: HRBN
Exhibit 10.1
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A
US Public Company. Stock Symbol: HRBN
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June
1, 2009
Gentlemen:
Reference is hereby made to (i) the
Purchase Agreement dated August 29, 2006 (the “Purchase Agreement”)
by and among Citadel Equity Fund Ltd., Xxxxxxx Xxxxx International and Harbin
Electric, Inc., a Nevada corporation (the “Company”) and
(ii) the Indenture dated as of August 30, 2006, as supplemented (the “Indenture”) by and
among the Company, the Subsidiary Guarantors named therein and The Bank of New
York Mellon, as trustee (the “Trustee”) with
respect to the Company’s Guaranteed Senior Secured Floating Rate Notes due 2012
(the “2012
Notes”) and the Company’s Guaranteed Senior Secured Floating Rate Notes
due 2010. Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Purchase Agreement or the Indenture,
as the case may be.
Section 8.02 of the Indenture provides,
among other things, that without the consent of each Holder, an amendment or
waiver may not (with respect to any Notes held by a non-consenting Holder)
reduce the interest or principal of any Note or impair the right of any Holder
to receive payment of principal of, premium, if any, and interest, if any, on
such Holder’s Notes.
The undersigned Holder owns $26.5
million aggregate principal amount of the 2012 Notes, which represents a
majority of the principal amount of all of the 2012 Notes currently
outstanding.
The undersigned Holder hereby (i)
waives each and every applicable provision of the Indenture (including without
limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the fullest
extent necessary solely to permit the Company to repurchase, at its option, all
(but not part) of the 2012 Notes held by such Holder at any time on or prior to
August 31, 2009 at the Repurchase Price (defined below), (the “Proposed 2012 Note
Repurchase”), (ii) consents to the Proposed 2012 Note Repurchase,
(iii) waives each and every provision of the Indenture (including without
limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the fullest
extent necessary solely to permit the Company to Incur up to $50 million in Debt
(the “New Debt”) on or prior to August 31, 2009; provided that the Company shall
use up to $38 million of the proceeds of the New Debt for the Proposed 2012 Note
Repurchase (the “Proposed Debt
Incurrence”) and (iv) consents to the Proposed Debt
Incurrence.
The
“Repurchase Price” shall, in the sole discretion of the undersigned Holder, be
either (a) cash equal to 85% of the aggregate principal amount of the 2012 Notes
held by such Holder plus accrued and unpaid interest thereon to but excluding
the Repurchase Date (defined below) or (b) the sum of (x) any securities being
issued in the Proposed Debt Incurrence in an aggregate principal amount at par
up to 50% of the principal amount of the 2012 Notes held by such Holder and (y)
cash equal to 85% of the aggregate remaining principal amount of the 2012 Notes
held by such Holder plus any accrued and unpaid interest thereon to
but excluding the Repurchase Date.
Main
Office
No. 9 Ha
Ping Xi Lu, Ha Ping Lu Xx Xxxxx Qu, Xxxxxx Xxx Fa Qu, Harbin, China 150060
Tel:
86-451- 0000-0000
Fax: 00-000-0000-0000
XX
Xxxxxx
00
Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
Tel:
000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
The “Repurchase Date” shall mean a
business day on which the Proposed 2012 Note Repurchase is consummated; provided
that, if the Proposed Debt Incurrence is consummated, the Repurchase Date shall
be no later than one business day following the date on which the Proposed Debt
Incurrence is consummated.
Except as noted in the preceding
paragraph, the undersigned Holder hereby waives and agrees not to exercise, on
behalf of itself, until August 31, 2009, any and all rights that it may
otherwise have under Section 5A (Right to Future Stock Issuance) of the Purchase
Agreement, but only to the extent that the proceeds from the issuance of New
Securities (as defined in the Purchase Agreement) are used for the Proposed 2012
Note Repurchase.
The Company hereby agrees to use its
reasonable best efforts to consummate the Proposed 2012 Note Repurchase on or
prior to August 31, 2009.
In the
event that the Company proposes to issue New Debt as provided herein, the
Company shall give written notice (the “Offer Notice”) to the
undersigned Holder, stating (a) its bona fide intention to offer such New Debt,
(b) the amount of such New Debt to be offered, and (c) the price and terms upon
which it proposes to offer such New Debt; and by notification to the Company
within five business days after the Offer Notice is given, the undersigned
Holder may elect to acquire, in exchange at par for up to 50% of the principal
amount of the 2012 Notes held by such Holder, any securities representing
the New Debt at the price and on the terms specified in the Offer Notice, and
the Company shall not offer or sell the remaining portion of such securities
representing such New Debt to any other person or persons other than at a price
not less than, and upon terms no more favorable to such other person or persons
than, those specified in the Offer Notice.
Any and
all consents and waivers granted by the undersigned Holder set forth above shall
expire at 5 p.m. New York time on August 31, 2009, and to the extent the Company
is in breach of any provision of the Indenture or the Notes, the undersigned
Holder reserves its rights to take any and all actions permitted under the
Indenture, the Notes or applicable law. In the event that the
Proposed 2012 Note Repurchase is not consummated on or prior to August 31, 2009,
then the Company will pay, on or before September 2, 2009, the undersigned
Holder an amount equal to 2% of the aggregate principal amount of the 2012 Notes
listed next to such Holder’s name below, which amount shall be in addition to
any and all amounts due under the Indenture or the 2012 Notes. Any
and all consents and waivers granted by such Holder set forth above and to the
extent not expired as specified herein shall be binding on the party hereto and
its respective successors, assigns and transferees.
Except as expressly waived or otherwise
specifically provided herein, all of the terms of each of the 2012 Notes, the
Indenture and the Purchase Agreement shall remain unamended and unwaived and
shall continue to be and shall remain in full force and effect in accordance
with their respective terms.
This letter is governed by the laws of
the State of New York without giving effect to the conflict of laws rules of any
jurisdiction. This letter may be signed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same agreement. Any signature delivered by a
party via telecopier shall be deemed to be an original signature
hereto.
Kindly acknowledge receipt of this
letter and agreement to the foregoing by executing the enclosed copy of this
letter where indicated and returning it to the Company, whereupon it shall
become a binding agreement among us as of the date hereof.
Main
Office
No. 9 Ha
Ping Xi Lu, Ha Ping Lu Xx Xxxxx Qu, Xxxxxx Xxx Fa Qu, Harbin, China 150060
Tel:
86-451- 0000-0000
Fax: 00-000-0000-0000
XX
Xxxxxx
00
Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
Tel:
000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
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Very
truly yours,
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By:
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Name: Xxxxxx
Xxxx
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Title: Chairman
& CEO
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AGREED
AND ACKNOWLEDGED:
Citadel
Equity Fund Ltd.
By:
Citadel Advisors LLC, its Portfolio Manager
By:________________________________
Name:
Title:
Aggregate
Principal Amount of the 2012 Notes Owned and For Which Waivers and Consents As
Specified Herein Are Given: $26.5 million
Main
Office
No. 9 Ha
Ping Xi Lu, Ha Ping Lu Xx Xxxxx Qu, Xxxxxx Xxx Fa Qu, Harbin, China 150060
Tel:
86-451- 0000-0000
Fax: 00-000-0000-0000
XX
Xxxxxx
00
Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
Tel:
000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
