VOTING AGREEMENT
VOTING
AGREEMENT, dated as of December 13, 2007 (this "Agreement"),
by
and among General Steel Holdings, Inc., a Nevada corporation (the "Company"),
and
the shareholders listed on the signature pages hereto under the heading
"Shareholders"
(each a
"Shareholder"
and
collectively, the "Shareholders").
WHEREAS,
as of the date hereof, the Shareholders own 23,918,900 shares of Common Stock
and 3,092,899 shares of Series A Preferred Stock, which represent in the
aggregate approximately 69.06% of the total issued and outstanding capital
stock
of the Company; and
WHEREAS,
as a condition to the willingness of the Investors to enter into the Securities
Purchase Agreement and to consummate the transactions contemplated thereby
(collectively, the "Transaction"),
the
Investors have required that each Shareholder agree, and in order to induce
the
Investors to enter into the Securities Purchase Agreement, each Shareholder
has
agreed, to enter into this Agreement with respect to all the Common Stock now
owned and which may hereafter be acquired by the Shareholder and any other
securities, if any, which such Shareholder is currently entitled to vote, or
after the date hererof, becomes entitled to vote, at any meeting of shareholders
of the Company (the "Other
Securities").
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree, in good faith, as follows:
ARTICLE
I
VOTING
AGREEMENT OF THE STOCKHOLDER
SECTION
1.01. Voting
Agreement.
Subject
to the last sentence of this Section 1.01, each Shareholder hereby agrees
that at any meeting of the shareholders of the Company, however called, and
in
any action by written consent of the Company's shareholders, each of the
Shareholders shall vote the Common Stock and the Other Securities: (a) in favor
of the Shareholder Approval (as defined in the Securities Purchase Agreement)
as
described in Section 4(p) of the Securities Purchase Agreement; and (b)
against any proposal or any other corporate action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Securities Purchase Agreement
or which could result in any of the conditions to the Company's obligations
under the Securities Purchase Agreement not being fulfilled. Each Shareholder
acknowledges receipt and review of a copy of the Securities Purchase Agreement
and the other Transaction Documents (as defined in the Securities Purchase
Agreement). The obligations of the Shareholders under this Section 1.01 shall
terminate immediately following the occurrence of the Shareholder Approval.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SHAREHOLDER
Each
Shareholder hereby represents and warrants, severally but not jointly, to the
Company as follows:
SECTION
2.01. Authority
Relative to This Agreement.
Each
Shareholder has all necessary power and authority to execute and deliver this
Agreement, to perform his or its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Shareholder and constitutes a legal, valid and binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except (a) as such enforceability may be limited
by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws now or hereafter in effect relating to, or affecting
generally the enforcement of creditors' and other obligees' rights, (b) where
the remedy of specific performance or other forms of equitable relief may be
subject to certain equitable defenses and principles and to the discretion
of
the court before which the proceeding may be brought, and (c) where rights
to
indemnity and contribution thereunder may be limited by applicable law and
public policy.
SECTION
2.02. No
Conflict.
(a) The
execution and delivery of this Agreement by such Shareholder does not, and
the
performance of this Agreement by such Shareholder shall not, (i) conflict with
or violate any federal, state or local law, statute, ordinance, rule,
regulation, order, judgment or decree applicable to it or by which the Common
Stock or the Other Securities owned by such Shareholder are bound or affected
or
(ii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Common Stock or the
Other
Securities owned by such Shareholder pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Shareholder is a party or by which such
Shareholder or the Common Stock or Other Securities owned by such Shareholder
are bound.
(b) The
execution and delivery of this Agreement by such Shareholder does not, and
the
performance of this Agreement by such Shareholder shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental entity by such Shareholder.
SECTION
2.03. Title
to the Stock.
As of
the date hereof, each Shareholder is the owner of the number of shares of Common
Stock set forth opposite the Shareholder's name on Appendix
A
attached
hereto, entitled to vote, without restriction, on all matters brought before
holders of capital stock of the Company, which Common Stock represent on the
date hereof the percentage of the outstanding stock and voting power of the
Company set forth on such Appendix. Such Common Stock are all the securities
of
the Company owned, either of record or beneficially, by such Shareholder. Such
Common Stock are owned free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on such
Shareholder's voting rights, charges and other encumbrances of any nature
whatsoever. No Shareholder has appointed or granted any proxy, which appointment
or grant is still effective, with respect to the Common Stock or Other
Securities owned by such Shareholder.
ARTICLE
III
COVENANTS
SECTION
3.01. No
Disposition or Encumbrance of Stock.
Each
Shareholder hereby covenants and agrees that, until the Shareholder Approval
has
been obtained, except as contemplated by this Agreement, such Shareholder shall
not offer or agree to sell, transfer, tender, assign, hypothecate or otherwise
dispose of, grant a proxy or power of attorney with respect to, or create or
permit to exist any security interest, lien, claim, pledge, option, right of
first refusal, agreement, limitation on the Shareholder's voting rights, charge
or other encumbrance of any nature whatsoever ("Encumbrance")
with
respect to the Common Stock or Other Securities, directly or indirectly,
initiate, solicit or encourage any person to take actions which could reasonably
be expected to lead to the occurrence of any of the foregoing; provided,
however,
that
any such Shareholder may assign, sell or transfer any Common Stock or Other
Securities provided that any such recipient of the Common Stock or Other
Securities has delivered to the Company a written agreement in a form reasonably
satisfactory to the Company that the recipient shall be bound by, and the Common
Stock and/or Other Securities so transferred, assigned or sold shall remain
subject to this Agreement.
SECTION
3.02. Company
Cooperation.
The
Company hereby covenants and agrees that it will not, and each Shareholder
irrevocably and unconditionally acknowledges and agrees that the Company will
not (and waives any rights against the Company in relation thereto), recognize
any Encumbrance or agreement on any of the Common Stock or Other Securities
subject to this Agreement unless the provisions of Section 3.01 have been
complied with. The Company agrees to use its reasonable best efforts to ensure
that at any time in which any Shareholder Approval is required pursuant to
Section 4(p) of the Securities Purchase Agreement, it will cause holders of
Common Stock or Other Securities representing the percentage of outstanding
capital stock required to vote in favor of the Transaction in order for the
Company to comply with its obligations under Section 4(p) of the Securities
Purchase Agreement to become party to and bound by the terms and conditions
of
this Agreement and the Common Stock and Other Securities held by such holders
to
be subject to the terms and conditions of this Agreement.
ARTICLE
IV
MISCELLANEOUS
SECTION
4.01. Further
Assurances.
Each
Shareholder will execute and deliver such further documents and instruments
and
take all further action as may be reasonably necessary in order to consummate
the transactions contemplated hereby.
SECTION
4.02. Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with the terms
hereof and that the Company shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity. The Company
shall be entitled to its reasonable attorneys' fees in any action brought to
enforce this Agreement in which it is the prevailing party.
SECTION
4.03. Entire
Agreement.
This
Agreement constitutes the entire agreement among the Company and the
Shareholders with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the Company and
the
Shareholders with respect to the subject matter hereof.
SECTION
4.04. Amendment.
The
provisions of this Agreement may not be amended or waived, nor may this
Agreement be terminated by the Company other than pursuant to the provisions
of
Section 4.07.
SECTION
4.05. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of this Agreement is not affected
in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the
parties hereto shall negotiate in good faith to modify this Agreement so as
to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the terms of this Agreement remain as originally
contemplated to the fullest extent possible.
SECTION
4.06. Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. The parties hereby agree that all actions or proceedings arising
directly or indirectly from or in connection with this Agreement shall be
litigated only in the Supreme Court of the State of New York or the United
States District Court for the Southern District of New York located in New
York
County, New York. The parties consent to the jurisdiction and venue of the
foregoing courts and consent that any process or notice of motion or other
application to any of said courts or a judge thereof may be served inside or
outside the State of New York or the Southern District of New York by registered
mail, return receipt requested, directed to the party being served at its
address set forth on the signature ages to this Agreement (and service so made
shall be deemed complete three (3) days after the same has been posted as
aforesaid) or by personal service or in such other manner as may be permissible
under the rules of said courts. The Company and each of the Shareholders
irrevocably waive, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit,
action, or proceeding brought in such a court and any claim that suit, action,
or proceeding has been brought in an inconvenient forum. . The Company and
each
of the Shareholders hereby
appoint CT Corporation System, with offices at 000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as its agent for service of process in New York.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
SECTION
4.07. Termination.
This
Agreement shall terminate immediately following the occurrence of the
Shareholder
Approval.
[Signature
Page Follows]
IN
WITNESS WHEREOF, each of the Shareholders
and the
Company has duly executed this Agreement.
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THE
COMPANY:
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GENERAL
STEEL HOLDINGS, INC.
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By:
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Name:
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Title:
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Dated:
December 13, 2007
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Address:
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General
Steel Holdings, Inc.
Room
2315, Kun Tai International Mansion Building
Yi
No 12
Xxxx
Xxxx Men Xxx Ave.
Xxxx
Xxxx Xxxxxxxx
Xxxxxxx
000000, Xxxxxx'x Xxxxxxxx of China
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IN
WITNESS WHEREOF, each of the Shareholders
and the
Company has duly executed this Agreement.
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SHAREHOLDER:
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ZUO
XXXXX XX
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Dated:
December 13, 2007
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Address:
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IN
WITNESS WHEREOF, each of the Shareholders
and the
Company has duly executed this Agreement.
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SHAREHOLDER:
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VICTORY
NEW HOLDING LIMITED
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Dated:
December 13, 2007
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Address:
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APPENDIX
A
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Shareholders
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Capital
Stock
Owned
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Percentage
of Stock
Outstanding
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Voting
Percentage
of
Stock
Outstanding
|
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Zuo
Xxxxx Xx
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23,918,900
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69.06%
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48.34%
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Victory
New Holding
Limited
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3,092,899
shares of
Series
A Preferred
Stock
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N/A
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30%
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