Warrant Agreement
THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND
THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
GENERAL STEEL HOLDINGS, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.
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Right
to Purchase Common Stock of GENERAL
STEEL
HOLDINGS,
INC.
(subject to adjustment as provided
herein)
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COMMON
STOCK PURCHASE WARRANT
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No.
______
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Issue
Date: September
1,
2005
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GENERAL
STEEL HOLDINGS, INC.,
a
corporation organized under the laws of the State of Nevada (the “Company”),
hereby certifies that, for value received, INVESTOR,
or its
assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time after the Closing
until the Expiration Date, as defined below, the Warrant Number of paid and
nonassessable shares of the common stock of the Company (the “Common Stock”),
$0.001 par value per share.
The
Purchase Price per share, as adjusted from time to time as herein provided,
is
referred to herein as the “Exercise Price.” The number and character of such
shares of Common Stock and the Exercise Price are subject to adjustment as
provided herein. Capitalized terms used and not otherwise defined herein
shall
have the meanings set forth in that certain Subscription Agreement (the
“Subscription Agreement”), dated September 1, 2005, entered into by the Company
and the Holder.
As
used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
The
term
“Company” shall include General Steel Holdings, Inc. and any corporation which
shall succeed or assume the obligations of General Steel Holdings, Inc.
hereunder
The
term
“Common Stock” shall have the meaning set forth in the recitals.
The
term
“Expiration Date” shall mean 5 p.m. E.S.T. on the third anniversary of the
Closing as defined in the Subscription Agreement.
The
term
“First Expiration Date” shall mean 5 p.m. E.S.T. on the second anniversary of
the Closing as defined in the Subscription Agreement.
The
term
“Registration Rights Agreement” shall mean that certain registration rights
agreement, dated September 1, 2005, among the Company and the investors.
The
term
“Second Expiration Date” shall mean 5 p.m. E.S.T. on the third anniversary of
the Closing as defined in the Subscription Agreement.
The
term
“Warrant Number” shall mean 2,000,000 shares.
Exercise
of Warrant:
Exercise
Price.
In
the
event the Holder exercises this Warrant
before the First Expiration Date, the Exercise Price will be $2.50 in lawful
money of the United States. If the Holder chooses to exercise this Warrant
after
the First Expiration Date but before the Second Expiration Date the Exercise
Price will be $5.00.
The
Company shall prepare and file with the Securities and Exchange Commission
a
registration statement under the Securities Act of 1933, as amended (the
“1933
Act”) registering the Common Stock issuable upon exercise of the Warrants for
unrestricted public resale by the Holder as set forth in the Registration
Rights
Agreement.
Exercise;
Delivery of Certificates.
This
Warrant may be exercised in full or in part at the option of the Holder,
at any
time or from time to time, by delivering an original or facsimile copy of
the
form of subscription attached as an Exhibit hereto (the “Subscription Form”)
duly executed by such Holder to the Company at its principal office or at
the
office of its Warrant Agent (as provided hereinafter), accompanied by payment,
in cash, wire transfer or by certified or official bank check payable to
the
order of the Company, in the amount obtained by multiplying the number of
shares
of Common Stock for which this Warrant is then exercisable by the Exercise
Price
then in effect. The Holder shall surrender the original Warrant within seven
(7)
days of exercise to the Company or Warrant Agent (as provided hereinafter).
Certificates for Warrant Shares so purchased shall be delivered to the Holder
after this Warrant has been exercised. Each stock certificate so delivered
shall
be registered in the name of the Holder or, subject to compliance with
applicable laws, such other name as shall be designated by the Holder.
Adjustments
to the Number of Warrant Shares.
The
number of Warrant Shares for which this Warrant is exercisable and the Exercise
Price shall be subject to adjustment from time to time as set forth
below.
(a) Stock
Dividends, Subdivisions and Combinations. If at any time the Company
shall:
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(i)
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pay
a dividend or other distribution on its Common Stock in shares
of Common
Stock or shares of any other class or series of capital
stock,
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(ii)
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subdivide
its outstanding shares of Common Stock into a larger number of
shares of
such Common Stock, or
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(iii)
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combine
its outstanding shares of Common Stock into a smaller number of
shares of
such Common Stock,
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then
the
number of Warrant Shares purchasable upon exercise of this Warrant immediately
prior to the record date for such dividend or distribution or the effective
date
of such subdivision or combination shall be adjusted so that the Holder of
this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant
the kind and number of shares of Common Stock that such Holder would have
owned
or have been entitled to receive immediately after such record date or effective
date had this Warrant been exercised immediately prior to such record date
or
effective date. An adjustment made pursuant to this paragraph shall become
effective immediately after the effective date of such event, but be retroactive
to the record date, if any, for such event.
(b) Upon
any
adjustment of the number of Warrant Shares purchasable upon the exercise
of this
Warrant as herein provided, the Exercise Price per share shall be adjusted
by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately prior to such
adjustment and the denominator of which shall be the number of Warrant Shares
so
purchasable immediately thereafter.
Reorganization,
Merger, Consolidation or Disposition of Assets.
If
at any
time the Company shall reorganize its capital, consolidate, merge or combine
with or into another Person (where the Company is not the surviving corporation
or where there is any change whatsoever in, or distribution with respect
to, the
outstanding Common Stock of the Company), or the Company shall sell, transfer
or
otherwise dispose of all or substantially all of its property, assets or
business to another Person, and, pursuant to the terms of such reorganization,
reclassification, consolidation, merger, combination, sale, transfer or other
disposition of assets, (i) shares of common stock of the successor or acquiring
Person or of the Company (if it is the surviving corporation) or (ii) any
cash,
shares of stock or other securities or property of any nature whatsoever
in
addition to or in lieu of common stock of the successor or acquiring Person
or
the Company (“Other
Property”)
are to
be received by or distributed to the holders of Common Stock of the Company
who
are holders immediately prior to such transaction, then the Holder of this
Warrant shall have the right thereafter to receive, upon exercise of this
Warrant, the number of shares of Common Stock, common stock of the successor
or
acquiring Person, and/or Other Property which holder of the number of shares
of
Common Stock for which this Warrant is exercisable immediately prior to such
event would have owned or received immediately after and as a result of such
event. In such event, the aggregate Exercise Price otherwise payable for
the
Warrant Shares issuable upon exercise of this Warrant shall be allocated
among
such securities and Other Property in proportion to the respective fair market
values of such securities and Other Property as determined in good faith
by the
Board of Directors of the Company.
Common
Stock Legend.
The
Holder acknowledges and agrees that the shares of Common Stock of the Company,
and, until such time as the Common Stock has been registered under the 1933
Act
and sold in accordance with an effective registration statement, or exemption
from registration, certificates and other instruments representing any of
the
Common Stock shall bear a restrictive legend in substantially the following
form
and a stop-transfer order may be placed against transfer of any such
securities:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAWS.
THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAW
OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO GENERAL STEEL HOLDINGS, INC.
THAT
SUCH REGISTRATION IS NOT REQUIRED.”
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Warrant
Agent.
The
Company may, by written notice to the Holder of the Warrant, appoint an agent
(a
“Warrant Agent”) for the purpose of issuing Common Stock issuable on the
exercise of this Warrant.
Issuance
and Reservation of Shares.
As long
as any Warrant Shares remain outstanding or are issuable with respect to
outstanding Warrants, the Company: (a) shall issue the Warrant Shares shall,
upon issuance, be duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock; and (b) at all times prior to the Expiration Date,
the
Company shall reserve for issuance a sufficient number of authorized but
unissued shares of Common Stock, to permit this Warrant to be exercised in
full.
Modification
And Waiver.
This
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement is sought.
Successors
and Assigns.
This
Warrant shall be binding upon and inure to the benefit of the Company and
the
Holder of this Warrant, and their respective successors and permitted assigns
and shall include, with respect to the Company, any Person succeeding the
Company by merger, consolidation, combination or acquisition of all or
substantially all of the Company's assets, and in such case, except as expressly
provided herein, all of the obligations of the Company hereunder shall survive
such merger, consolidation, combination or acquisition.
Lost
Warrant or Certificates.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or of a stock certificate evidencing
Warrant Shares and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company or, in the
case
of any such mutilation, upon surrender and cancellation of such Warrant or
stock
certificate, the Company shall make and deliver to Holder, a new Warrant
or
stock certificate, of like tenor, in lieu of the lost, stolen, destroyed
or
mutilated Warrant or stock certificate.
Issue
Tax. The
issuance of shares of Common Stock upon the exercise of this Warrant shall
be
made without charge to the Holder for any issue tax in respect
thereof.
Miscellaneous.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. This Warrant
shall
be construed and enforced in accordance with and governed by the laws of
the
State of New York, without giving effect to the conflicts of laws principles
thereof.
This
Common
Stock Purchase Warrant
and the
legal relations among the parties hereto shall be governed by and construed
in
accordance with the laws of the United States of America and State of New
York,
regardless of the laws that might otherwise govern under applicable
choice-of-law principles. The parties hereby irrevocably submit to the
non-exclusive jurisdiction of the state and federal courts located in the
State
and County of New York for purposes of all legal proceedings arising out
of or
relating to this Common
Stock Purchase Warrant
or the
transactions contemplated hereby. The parties hereby irrevocably waive, to
the
fullest extent permitted by applicable law, the right to trial by jury, any
objection which they may now or hereafter have to the laying of venue of
any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
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IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
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GENERAL
STEEL HOLDINGS, INC.
By:
______________________________________
Name:
Zuo
Xxxxx Xx
Title:
Chief Executive Officer and
Chairman
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