EXECUTION
COPY
VOTING
AGREEMENT
THIS VOTING AGREEMENT
(this “ Agreement ”) is made and entered into as
of December 27, 2006 by and among (1) China Shen Zhou Mining &
Resources, Inc., a Nevada corporation (the “ Company
”), (2) Ms. Yu Xiao Jing (PRC ID No. 620402195701131322) and
Mr. Xu Xue Ming (PRC ID No. 152826196107120416), each being
individuals resident in the People’s Republic of China (each
a “ Shareholder ” and together the “
Shareholders ”) and (3) Citadel Equity Fund Ltd.
(“ Citadel ”).
RECITALS
WHEREAS, pursuant to a
notes purchase agreement dated on or about the date hereof and made
between the Company and Citadel (the “ Notes Purchase
Agreement ”), Citadel has agreed to purchase from the
Company, and the Company has agreed to issue and sell to Citadel,
6.75% Senior Convertible Notes due 2012 of the Company (the “
Notes ”) in the aggregate initial principal amount of
US$28,000,000.
WHEREAS, the Notes
Purchase Agreement provides that the execution and delivery of this
Agreement by the parties shall be a condition precedent to the
consummation of the transactions contemplated under the Notes
Purchase Agreement.
NOW, THEREFORE, in
consideration of the foregoing recitals, the mutual promises
hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1.
DEFINITIONS
For all purposes of this
Agreement, defined terms used but not otherwise defined herein
shall have the meanings given to such terms in the Notes Purchase
Agreement.
2.
BOARD
REPRESENTATION .
2.1
Citadel
Nominees .
Citadel shall be entitled to make the Citadel Election (as
defined below) for up to two (2) individuals (each a “
Citadel Nominee ” and together, the “ Citadel
Nominees ”) to serve on the Company’s Board of
Directors during the Term (as defined in Section 4.1);
provided , that the appointment or election of the second
Citadel Nominee shall take place on or after the earlier of (i) an
increase in the size of the Board of Directors following the
appointment or election of the first Citadel Nominee or (ii) the
date of approval of the listing of the Company’s Common Stock
on the New York Stock Exchange, the National Association of
Securities Dealers Automated Quotation National Market or the
American Stock Exchange; provided further , that at
least one (1) of Citadel Nominees for whom the Citadel Election has
been made shall qualify as an independent director under then
applicable laws and requirements of the applicable stock exchange,
including the Sarbanes-Oxley Act of 2002.
2.2
Citadel
Election .
If Citadel provides written notice to the Company informing
the Company of (i) its election (the “ Citadel
Election ”) to be represented on the Board of Directors
and (ii) the name(s) of the Citadel Nominee(s), then, as soon as
practicable after its receipt of such notice from Citadel, but in
no event later than ten (10) Business Days after such receipt, the
Company shall:
(a)
provide notice of the
Citadel Election to the Company’s Board of Directors and the
Shareholders, and
(b)
take all necessary
actions so as to permit the Citadel Nominee(s) to be duly appointed
or elected as members of the Company’s Board of
Directors.
Subject to the
conditions and limitations set forth herein, the Citadel Election
may be exercised by Citadel at any time in its sole
discretion.
2.3
Size of the Board of
Directors .
The Company shall take all necessary action, from time to
time and at all times, so as to (i) maintain the total size of the
Board of Directors (including vacancies) to permit the Citadel
Nominees to be appointed to the Board of Directors and (ii) ensure
that the total size of the Board of Directors does not exceed seven
(7) members at any time.
2.4
Voting
Agreement .
Each Shareholder agrees to vote, or cause to be voted, all
shares of the Company’s Common Stock (the “ Common
Stock ”) owned by such Shareholder (of record or through
a brokerage firm or other nominee arrangement), or over which such
Shareholder has voting control, from time to time and at all times,
in whatever manner as shall be necessary:
(a)
to ensure that at each
annual or special meeting of shareholders at which an election of
directors is held or pursuant to any written consent of the
shareholders, the Citadel Nominees are duly elected to the Board of
Directors;
(b)
to ensure that the size
of the Board of Directors is sufficient to permit the appointment
and/or election of the Citadel Nominees to the Board of
Directors;
(c)
to ensure that the
total size of the Board of Directors does not exceed seven (7)
members at any time; and
(d)
to amend or supplement
the by-laws of the Company, if and to the extent necessary to give
effect to the transactions contemplated in this
Agreement.
2.5
Vacancies
. Any vacancies
created by the resignation, removal or death of a Citadel Nominee
appointed or elected to the Board of Directors shall be filled
pursuant to the provisions of this Section 2.
3.
Representations and
Warranties .
3.1
Ms. Yu is the sole
legal and beneficial owner of 14,917,000 shares of Common Stock,
and Mr. Xu is the sole legal and beneficial owner of 1,870,000
shares of Common Stock, in each case free and clear of any Lien
except for the Lien created by the Share Pledge Agreement dated as
of the date hereof by and among the parties named therein (the
“ Share Pledge Agreement ”) and the Prior Lien
(as defined in the Share Pledge Agreement). All of the Common Stock
held by each Shareholder has been duly authorized and validly
issued and is fully paid and non-assessable.
3.2
Each of the
Shareholders has full power and authority to make, enter into and
carry out the terms of this Agreement. This Agreement has been duly
executed and delivered by each such Shareholder and
