OPTION AGREEMENT
Exhibit
10.3
THIS
OPTION AGREEMENT (the “Option
Agreement”),
made
and entered into as of this 31st
day of
August, 2005, by and between HARBIN ELECTRIC, INC., a Nevada corporation (the
“Company”),
and
the entity whose name appears on the signature page hereof (the “Optionee”).
Capitalized
terms used in this Option Agreement and not otherwise defined have the
respective meanings set forth in the Common Stock Purchase Agreement (the
“Agreement”)
of the
Company dated the date hereof (the “Closing
Date”).
W
I T N E S S E T H
:
WHEREAS,
the
Company and the Optionee, among other parties, have entered into the Agreement;
WHEREAS,
the
Agreement requires the execution and delivery of this Option Agreement;
and
WHEREAS,
the
Optionee desires to have an option to purchase a certain number of Shares in
the
Company and the Company desires to grant the Optionee such option, subject
to
the terms and conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
| 1. |
Option.
The Company hereby grants to the Optionee the right and option (the
“Option”)
to purchase, in whole but not in part, the number of Shares in the
Company
as set forth beneath such Optionee’s signature on the signature page
hereto, at a purchase price of $3.50 for each
share.
|
| 2. |
Term.
The term of the Option shall commence on the Closing Date hereof
and shall
terminate on the third anniversary day from such date, unless it
is sooner
terminated as provided in this Option
Agreement.
|
| 3. |
Exercise.
The Option may be exercised one time only, in accordance with Section
2
hereof.
|
| 4. |
Notice.
The Option shall be exercised by the giving of written notice thereof
to
the Company. Such notice shall specify the number of Shares to be
purchased, and shall be accompanied by payment of the full purchase
price.
|
| 5. |
Non-Transferability.
The Option may not be transferred, assigned, pledged, hypothecated
or
otherwise disposed of (whether by operation of law or otherwise)
without
prior written consent by the
Company.
|
| 6. |
No
Attachment.
The Option shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate
or
otherwise dispose of the Option, or upon a levy or any attachment
or
similar process with respect to the Option, the term of the Option
shall
terminate and the Option shall immediately become null and
void.
|
| 7. |
Miscellaneous.
|
| (a) |
Capitalized
Terms.
Unless specifically set forth herein, capitalized terms shall have
the
same meaning as set forth in the
Agreement.
|
| (b) |
Entire
Agreement.
This Option Agreement constitutes the entire understanding between
the
Company and the Optionee with respect to the subject matter hereof
and
supersedes any and all previous agreements or understandings between
the
Company and the Optionee concerning the subject matter hereof. This
Option
Agreement may not be changed or amended without the prior written
consent
of both the parties hereto.
|
| (c) |
Notices.
All notices hereunder shall be in writing and shall be mailed by
certified
mail, return receipt requested or sent by a reputable overnight courier,
or personally delivered to the parties hereto at the addresses set
forth
below or at such other addresses as may be designated in writing
to the
other parties.
|
| If to the Company: |
|
No. 9 Ha Ping Xi Lu
Ha Ping Lu Xx Xxxxx Qu
Xxxxxx
Xxx Xx Xx
Xxxxxx,
China 150060
Attn: Chungang
Xia
Tel: x00-000-00000000
Fax: x00-000-00000000
|
with
a
copy to:
Xxxx
Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxxxxxxxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
| (d) |
Governing
Law.
This Option Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to
any
conflicts of law principles.
|
| (e) |
Captions.
The captions herein are for the convenience of the parties and are
not to
be construed as part of the terms of this Option
Agreement.
|
| (f) |
Counterparts.
This Option Agreement may be executed in counterparts, each of which
shall
be deemed an original, and all of which, when taken together, shall
constitute one and the same document. The signature of any party
to any
counterpart shall be deemed to, and may be appended to, any other
counterpart.
|
IN
WITNESS WHEREOF, the
parties hereto have signed this Option Agreement on the day and year first
above
written.
The
Company:
| |
|
|
| : | By: | /s/ Tian Fu Yang |
|
Name: Tian
Fu Yang
|
||
|
Title: CEO
|
||
The
Optionees:
|
Lake
Street Fund, L.P.
By:/s/ Xxxxx
X. Xxxx
Name: Xxxxx
X. Xxxx
Title: Investment
Manager
President
FWSM
Number
of Options: 160,000
|
Xxxx
X. Xxxxxx & Xxxx X. Xxxxxx XX-WROS
By:/s/ Xxxx
X. Xxxxxx
Name: Xxxx
X. Xxxxxx
By:
/s/ Xxxx
X. Xxxxxx
Name: Xxxx
X. Xxxxxx
Number
of Options: 60,000
|
|
Xxxx
X. Xxxxxx & Xxxx
By:
/s/ Xxxx
X. Xxxxxx
Name: Xxxx
X. Xxxxxx
Number
of Options: 22,698
|
Xxxxx
Xxxx
By:
/s/ Xxxxx
X. Xxxx
Name: Xxxxx
X. Xxxx
Number
of Options: 4,000
|
|
Xxxxxx
Xx
By:
/s/ Xxxxxx
Xx
Name: Xxxxxx
Xx
Number
of Options: 3,900
|
Xxx
Xxx Lu
By:/s/ Xxx
Xxx Lu
Name: Xxx
Xxx Lu
Number
of Options: 3,900
|
|
J.
Xxxxx Xxxxx
By:
/s/ J.
Xxxxx Xxxxx
Name: J.
Xxxxx Xxxxx
IRS
Rollover
Number
of Options: 10,000
|
R.
Xxxxx Xxxxxxx
By:
/s/ R.
Xxxxx Xxxxxxx
Name: R.
Xxxxx Xxxxxxx
Number
of Options: 3,000
|
|
Midsouth
Investor Fund LP
By:/s/ Xxxxx
X. Xxxxxxx
Name: Xxxxx
X. Xxxxxxx
Title: General
Partner
Number
of Options: 80,000
|
Xxxxx
X. Xxxxxxx
By:
/s/ Xxxxx
X. Xxxxxxx
Name: Xxxxx
X. Xxxxxxx
Number
of Options: 20,000
|
|
Xxxxx
Xxx
By:/s/ Xxxxx
Xxx
Name: Xxxxx Xxx Number
of Options: 60,000
|
Lighthouse
Consulting Limited
By:
/s/ Bai
Ye Feng
Name: Bai Ye Feng Title: Director
Number
of Options: 20,000
|
|
Xxxxxxx
X. Xxxxx
By:/s/ Xxxxxxx
X. Xxxxx
Name: Xxxxxxx
X. Xxxxx
Number
of Options: 2,500
|
Xxxxxxx
X. Xxxxx “S”
By:/s/ Xxxxxxx
X. Xxxxx “S”
Name: Xxxxxxx
X. Xxxxx “S”
Number
of Options: 2,500
|
|
Xxxxxxxxx
X. Xxxxx “S”
By:/s/ Xxxxxxxxx
X. Xxxxx “S”
Name: Xxxxxxxxx X. Xxxxx “S” Number
of Options: 2,500
|
Xxxxxxx
X. Xxxxx “S”
By:/s/ Xxxxxxx
X Xxxxx “S”
Name: Xxxxxxx
X. Xxxxx “S”
Number
of Options: 2,500
|
|
Domaco
Venture Capital Fund
By:/s/ Xxxx
Xxxxx
Name: Xxxx Xxxxx Title: General
Partner
Number
of Options: 2,500
|
Xxxxxxxxx
Xxxxx #2 Trust
By:
/s/ Xxxx
Xxxxx
Name: Xxxx Xxxxx Title: Trustee
By:
/s/ Xxxxxxxxx
Xxxxx
Name: Xxxxxxxxx Xxxxx Title: Trustee
Number
of Options: 2,500
|
|
Xxxxxx
X. Xxxxx
By:/s/ Xxxxxx
X. Xxxxx
Name: Xxxxxx X. Xxxxx Number
of Options: 2,500
|
Xxxxxx
X. Xxxxxx
By:
/s/ Xxxxxx
X. Xxxxxx
Name: Xxxxxx X. Xxxxxx Number
of Options: 2,500
|
|
Xxxx
Investments N.V.
By:/s/ Xxxxxxx
X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Partner
Number
of Options: 2,500
|
RL
Capital Partners, L.P.
By:
/s/ Xxxxxx
X. Xxxxx
Name: Xxxxxx
X. Xxxxx
Title: Managing
Member
Number
of Options: 100,000
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