Harbin Electric (NASDAQ:HRBN)

On July 28, 2010, Harbin Electric, Inc. a Nevada corporation entered into a Loan Agreement, dated July 28, 2010 with Abax Emerald Ltd., a Cayman Islands limited company, pursuant to which Abax agreed to provide up to $15,000,000 in loans to the Company. The Loan shall be made pursuant to one or more borrowings from time to time from the Closing Date (July 28, 2010) to the date falling on the expiration of five months after the Closing Date upon delivering a notice from the Company to Abax. In lieu of payment of interest in cash on each Advance, the outstanding principal amount thereof shall accrete in value for the period commencing on the Borrowing Date (the date on which any Advance is made from the Company to Abax) for such Advance and ending on the day on which such Advance is repaid, at a rate equal to 10% per annum, computed as described in the Agreement. The Company may voluntarily prepay any Advance (or portion thereof in an integral multiple of $100,000) at its accreted value at any time upon written notice to Abax. On the Maturity Date (six months after the date of the Agreement), the Company shall repay the remaining outstanding obligations not theretofore paid, together with all fees and other amounts payable under the Loan.