Share Transfer Agreement between General Steel Holdings, Inc. and Tianjin Shuangsi Trading Co. Limited. dated July 31, 2019

Exhibit 10.1

SHARE TRANSFER AGREEMENT

By

General Steel Holdings, Inc.

a company incorporated in Nevada

and

Tianjin Shuangsi Trading Co. Limited

a company incorporated in China

Dated as of July 31, 2019

SHARE TRANSFER AGREEMENT

This Share Transfer Agreement is made effective as of the 31st day of July, 2019 by and between General Steel Holdings, Inc., a company incorporated in Nevada (the “GSIH” or “Seller”) and Tianjin Shuangsi Trading Co. Limited, a company incorporated in China (“Tianjin Shuangsi” or “Buyer”). Buyer and Seller are sometimes hereinafter collectively referred to as the “Parties” and each individually as a “Party”.

WHEREAS:

A.        The Seller is the sole owner and shareholder of General Steel Investment Co., Ltd.,  a company incorporated in British Virgin Islands (“GSI BVI”); and

B.         Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd. (“Tongyong”) is a company incorporated in China and a wholly owned subsidiary of GSI BVI; and

C.         Tongyong owns 32% equity interest of Tianwu Tongyong (Tianjin) International Trade Co., Ltd, ("Tianwu Tongyong") (“Tianwu Tongyong”, collectively with Tongyong and GSI BVI as “GSI BVI and its subsidiaries”); and

D.         Upon the terms and subject to the conditions set forth in this Agreement, the Seller has agreed to sell all of the issued and outstanding capital stock of GSI BVI held by the Seller to the Buyer; and

E.         Buyer is a company incorporated in China and controlled by Zuosheng Yu, who was the Chairman and Chief Executive Officer of GSIH until July 8, 2019.

F.         Upon the terms and subject to the conditions set forth in this Agreement, the Buyer has agreed to purchase all of the issued and outstanding capital stock of GSI BVI from the Seller.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, covenant and agree as follows:

1.          DEFINITIONS

1.1          Definitions.  The following terms have the following meanings in this Agreement, unless the context indicates otherwise:

1.2          Currency.  All references to currency in this Agreement are to United States Dollars, unless expressly stated otherwise.

2.          OFFER, PURCHASE AND SALE OF SHARES

2.1          Offer, Purchase and Sale of Shares.  Subject to the terms and conditions of this Agreement, the Seller hereby covenants and agrees to sell, assign and transfer to Buyer, and Buyer hereby covenants and agrees to purchase from the Seller, all of the issued and outstanding capital stock of GSI BVI at the Purchase Price as defined below in section 2.2 of this Agreement. The Buyer understands and agrees that it purchases all the issued and outstanding shares of GSI BVI which include all the assets and Liabilities of GSI BVI and its subsidiaries.

2.2          Consideration. Parties agree that the aggregate price of all the issued and outstanding capital stock of GSI BVI (the “Shares”) is $ 300,000 (the “Purchase Price”), which value is primarily derived from the net equity of GSI BVI and its direct, wholly-owned operating entity Tongyong and Tonyong’s 32% equity ownership in Tianwu Tongyong. The net equity value was based upon the preliminary evaluation of GSI BVI and its subsidiaries by Beijing Lixin Donghua Assets Evaluation Co., Ltd. (“Beijing Lixin”). If the final evaluation amount of GSI BVI and its subsidiaries by Beijing Lixin is no more than 10% higher or lower than the Purchase Price, the Parties agree there will be no change to the Purchase Price. If the final evaluation amount of GSI BVI and its subsidiaries by Beijing Lixin is more than 10% higher or lower than the Purchase Price, the Parties agree to renegotiate the purchase price based on the final evaluation amount. If no agreement can be reached through negotiation, the Parties agree to engage a new evaluation firm to reevaluate the value of GSI BVI and its subsidiaries and use the new evaluation result as the final purchase price of all the issued and outstanding capital stock of GSI BVI. The Seller has the right to appoint the new third party evaluation firm.

2.3          Payment of Purchase Price.  $300,000 of the Purchase Price shall be paid by cancellation of the payables owed by the Seller to the Buyer, including its principal amount and interest accrued. Parties agree and confirm the Seller and its subsidiaries do not owe any payables to the Buyer after the Closing.

2.4          Closing Date.  The Closing will take place, subject to the terms and conditions of this Agreement, on the Closing Date.

3.          REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements contained in this Article 3 are true and correct as of the date hereof:

3.1          Organization of GSI BVI and its subsidiaries.

3.2          Ownership of Equity.  Seller (i) has good and valid title to and beneficial ownership of the number of shares of capital stock of GSI BVI free and clear of all liens, pledges, security interests and encumbrances, (ii) has not granted any option, warrant or other right in or to any of the Shares, and (iii) is not a party to any voting trust, voting agreement or shareholder agreement with respect to the Shares.

3.3          Authority.  Seller has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “Seller Documents”) to be signed by Seller and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of each of the Seller Documents by Seller and the consummation by Seller of the transactions contemplated hereby have been duly authorized by its board of directors and approved by the shareholders owning majority voting power of the Seller. This Agreement has been, and the other Seller Documents when executed and delivered by Seller as contemplated by this Agreement will be, duly executed and delivered by Seller and this Agreement is, and the other Seller Documents when executed and delivered by Seller, as contemplated hereby will be, valid and binding obligations of Seller enforceable in accordance with their respective terms, except:

3.4          Legal Proceedings. There are no suits, actions, claims, proceedings or investigations pending or, to the knowledge of Seller, threatened against, relating to or involving any Seller or GSI BVI that would or would reasonably be expected to impair the ability of Seller or GSI BVI to perform its respective obligations hereunder or prevent or delay the consummation of the Transaction.

3.5          Non-Contravention.  Neither the execution, delivery and performance of this Agreement, nor the consummation of the Transaction, will:

3.6           Compliance with Laws. Each of GSI BVI and its subsidiaries is in material compliance with all laws and regulations of or from any governmental body applicable to its business and assets.

3.7          No Brokers.  None of GSI BVI, GSI BVI’s subsidiaries or Seller has incurred any obligation or liability to any party for any brokerage fees, agent’s commissions or finder’s fees in connection with the Transaction contemplated by this Agreement

4.          REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this Article 4 are true and correct as of the date hereof:

4.1          Organization and Good Standing.  Buyer is duly incorporated, organized, validly existing and in good standing under the laws of China and has all requisite corporate power and authority to own, lease and carry on its business as now being conducted.

4.2          Authority.  Buyer has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “Buyer Documents”) to be signed by Buyer and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of each of the Buyer Documents by Buyer and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by its board of directors and approved by the shareholder of the Buyer. This Agreement has been, and the other Buyer Documents when executed and delivered by Buyer as contemplated by this Agreement will be, duly executed and delivered by Buyer and this Agreement is, and the other Buyer Documents when executed and delivered by Buyer, as contemplated hereby will be, valid and binding obligations of Buyer enforceable in accordance with their respective terms, except:

4.3          Information Concerning GSI BVI and its subsidies.  Buyer is solely responsible for conducting its own due diligence with respect to GSI BVI and its subsidiaries’ liabilities and for gathering enough information upon which to base a decision in purchasing the Shares.  Buyer acknowledges that Seller has not made any representations with respect to GSI BVI and its subsidiaries or their status or as to the value or merit of an investment in the Shares, except as explicitly stated in this Agreement. Buyer understands that GSI BVI and its subsidies are sold “AS IS, WHERE IS”, without any representation or warranty except as explicitly stated in this Agreement.

4.4          Non-Contravention; Buyers’ Consents. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby do not and will not:

4.5          Litigation.  There are no actions, suits, claims, investigations or other legal proceedings pending or, to the knowledge of Buyer, threatened against or by Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

4.6          Compliance with Laws. The Buyer is in material compliance with all laws and regulations of or from any governmental body applicable to its business and assets.

4.7          No Brokers.  Buyer has not incurred any obligation or liability to any party for any brokerage fees, agent’s commissions or finder’s fees in connection with the Transaction contemplated by this Agreement.

5.          CLOSING CONDITIONS

5.1          Conditions Precedent to Closing by Buyer.  The obligation of Buyer to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 7. The Closing of the Transaction contemplated by this Agreement will be deemed to mean a waiver of all conditions to Closing. These conditions precedent are for the benefit of Buyer and may be waived by Buyer in its sole discretion.

5.2          Conditions Precedent to Closing by Seller.  The obligation of the Seller to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 7. The Closing of the Transaction will be deemed to mean a waiver of all conditions to Closing. These conditions precedent are for the benefit of the Seller and may be waived by Seller in its sole discretion.

6.          ADDITIONAL COVENANTS OF THE PARTIES

6.1          Confidentiality.  All information regarding the business of GSI BVI and its subsidiaries including, without limitation, financial information that Seller provides to Buyer during its due diligence investigation of GSI BVI and its subsidiaries will be kept in strict confidence by Buyer and will not be used, dealt with, exploited or commercialized by Buyer or disclosed to any third party (other than Buyer’s professional accounting and legal advisors) without Seller’ prior written consent unless it is required by the law or regulations.

6.2          Conduct of GSI BVI and its subsidiaries.  From the date of this Agreement to the Closing Date, and except to the extent that Buyer otherwise consents in writing, GSI BVI and its subsidiaries will operate its business substantially as presently operated and only in the ordinary course and in compliance with all applicable laws, and use its best efforts to preserve its good reputation and present business organization and to preserve its relationships with persons having business dealings with it.

6.3          Existing Liabilities of GSI BVI and its Subsidiaries.  The Buyer understands it acquires all of the issued and outstanding shares of GSI BVI and the Buyer agrees to assume all the existing Liabilities and responsibilities of GSI BVI and its subsidiaries, including but not limited to the existing bank loans, debts and taxes owed by GSI BVI and its subsidiaries as well as payment of salary and social benefits to employees of GSI BVI and its subsidiaries according to Chinese labor laws and regulations.

6.4          Notification.  Between the date of this Agreement and the Closing Date, each of the parties to this Agreement will promptly notify the other parties in writing if it becomes aware of any fact or condition that causes or constitutes a material breach of any of its representations and warranties as of the date of this Agreement, if it becomes aware of the occurrence after the date of this Agreement of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition.

6.5          Public Announcements.  Buyer and Seller agree that they will not release or issue any reports or statements or make any public announcements relating to this Agreement or the Transaction contemplated herein without the prior written consent of the other party, except as may be required to comply with applicable laws or regulatory requirements.

7.          CLOSING

7.1          Closing.  The Closing shall take place on the Closing Date at the office of GSIH or at such other location as agreed to by the parties.

7.2          Closing Deliveries of Seller.  At Closing, Seller will deliver or cause to be delivered the following, fully executed and in form and substance reasonably satisfactory to Buyer:

7.3          Closing Deliveries of Buyer.  At Closing, Buyer will deliver or cause to be delivered the following, fully executed and in form and substance reasonably satisfactory to Seller:

8.          INDEMNIFICATION

Each Party shall indemnify and hold harmless the other Party from and against any and all losses, damages, expenses and liabilities or actions, investigations, inquiries, arbitrations, claims or other proceedings in respect thereof (collectively “Actions”) (Liabilities and Actions are herein collectively referred to as “Losses”), that arise by reason of  representations by such Party in this Agreement being untrue in any material respect or by reason of a breach of any of obligations of such Party under this Agreement. The Buyer shall also indemnify and hold harmless General Steel Holdings, Inc. and its officers and directors (collectively “GSIH US”) from and against any and all the Losses that arise by reason of representations by the Buyer in this Agreement being untrue in any material respect or by reason of a breach of any of obligations of the Buyer under this Agreement.  Losses include, but are not limited to, all reasonable legal fees, court costs and other expenses incurred in connection with investigating, preparing, defending, paying, settling or compromising any suit in law or equity arising out of this Agreement or for any breach of this Agreement notwithstanding the absence of a final determination as to breaching Party’s obligations to reimburse the other Party or GSIH US for such Losses and the possibility that such payments might later be held to have been improper.

9.          TERMINATION

9.1          Termination.  This Agreement may be terminated at any time prior to the Closing Date contemplated hereby by:

9.2          Effect of Termination.  In the event of the termination of this Agreement as provided in Section 9.1, this Agreement will be of no further force or effect, provided, however, that no termination of this Agreement will relieve any party of liability for any breaches of this Agreement that are based on a wrongful refusal or failure to perform any obligations.

10.          MISCELLANEOUS PROVISIONS

10.1          Amendment.  This Agreement may not be amended except by an instrument in writing signed by each of the parties.

10.2          Expenses.  Each party will bear its own costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby, including all fees and expenses of its own agents, representatives and accountants.

10.3          Entire Agreement.  This Agreement, the schedules attached hereto and the other documents in connection with this transaction contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior arrangements and understandings, both written and oral, expressed or implied, with respect thereto. Any preceding correspondence or offers are expressly superseded and terminated by this Agreement.

10.4          Notices.  All notices and other communications required or permitted under this Agreement must be in writing and will be deemed given if sent by email, personal delivery, faxed with electronic confirmation of delivery, internationally-recognized express courier or registered or certified mail (return receipt requested), postage prepaid, to the parties at the addresses provided in this Agreement.

All such notices and other communications will be deemed to have been received:

10.5          Headings.  The headings contained in this Agreement are for convenience purposes only and will not affect in any way the meaning or interpretation of this Agreement.

10.6          Assignment.  This Agreement may not be assigned (except by operation of law) by any party without the consent of the other parties.

10.7          Governing Law and Jurisdiction.  This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to any other choice or conflict of law provision that would cause the application of the laws of any other jurisdiction other than Nevada. Buyer and Seller irrevocably consent to the jurisdiction of the courts of the Clark County, Nevada and of any Federal court located in such county in connection with any action, suit or proceedings arising out of or relating to this Agreement or any action taken or omitted hereunder, and waive personal service of any summons, complaint or other process, and agree that the service thereof may be made by certified or registered mail directed to any or all of the Parties at the addresses listed on the signature pages attached hereto.

10.8          Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

10.9          Gender.  All references to any party will be read with such changes in number and gender as the context or reference requires.

10.10        Counterparts.  This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

10.11        Effective.  This Agreement becomes effective upon the parties’ execution.

In Witness Whereof, the Parties hereto have executed this Agreement as of the first date written above by the undersigned thereunto duly authorized.