Herman can be found in Great Arc. He will offer to join you once you have visited the Control Room in Vanguard and are searching for the Dolphin Statue. Once Herman joins the party, he won't leave until you either kill Forneus with him or until Herman dies.
Herman sucks. There's no way around saying it. His stats are bad; he misses alot; he dies alot; he doesn't do much damage; and he takes amazing amounts of damage. He's meant to be this way though. There is no point in getting Herman unless you're going to kill Forneus rather soon. Later in the game, Herman will become harder to keep alive due to his low LP. Luckily, he'll become Black, who is much better, after killing Forneus.