Exhibit 10.37

 

 [tlogo.jpg] Trust Loan Contract

 

Contract No.: AXXT[2016]JHXT01-DK01

 

Trust Loan Contract

 

Anxin Trust Co., Ltd.

 

January of 2016

 

 

 

 

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Contents

 

1 Definition and Explanation 1       2 Trust loans 4       3 Precedent condition
of disbursement 5       4 Disbursement of loans 7       5 The usage of trust
loan 7       6 Interest 8       7 Repayment 9       8 Loan Guarantee 11       9
Payment 14       10 Capital Regulation 15       11 Representations and
Warranties matters 15       12 The Agreed Items 17       13 Events of default 19
      14 Liabilities for default 21       15 Special stipulations 22       16
Supplement, Modification and Transfer of the contract 22       18 Grace and
Partial invalidity 24

 

 

 

 

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This Contract of Trust Loans numbered AXXT[2016]JHXT01-DK01 is concluded of and
between the following two parties in Shanghai in           .

 

Lender: Anxin Trust Co., Ltd. Legal Representative: Wang Shaoqin Address: Room
301, Tower A, No. 1553-1555 of Kongjiang Road, Shanghai City Contact Address:
29th Floor of Haitong Securities Tower, No. 689 of Guangdong Road, Shanghai City
Contact Person: Lian Bo Postcode: 200001 Fax: 021-63410309 Tel: 021-63410777    
Borrower: Wuhan Kingold Jewelry Co., Ltd. Legal Representative: Jia Zhihong
Address: Special No. 15 of Huangpu Science and Technology Park, Jiang’an
District, Wuhan City Contact Address: Special No. 15 of Zhongshan Western
Huangpu Science and Technology Park, Jiang’an District Contact Person:  
Postcode: 430023 Fax: 027-65694977 Tel: 027-65694977

 

The parties involved above is separately referred to as “one party” and
collectively known as “both parties”.

 

WHEREAS:

(1)The lender is a validly existing financial institution established with
approve of authorities concerned in accordance with the laws of the People's
Republic of China and has Financial License as well as Business license, with
business scope of trust service cooperation and it mainly cooperates trust
business. The lender plans to set up a “Loan and assembled fund trust plan of
Anxin·win-win of Kingold Jewelry Company” and promises to use the trust funds
under such assembled fund trust plan to make loans for the borrower, which shall
be used by the borrower to purchase raw materials— AU9999 Standard Gold which
purity is 999.9(the gold content is not lower than 999.9‰);

 

(2)The borrower is a company limited by shares with valid existence established
in accordance with the laws of the People's Republic of China. Due to the need
of manufacture and operation, the borrower applies to the lender for loans no
more than 3 billion Yuan (Capital: Three Billion Yuan Only);

 

(3)According to the stipulation of Trust Contract, the lender agrees to offer
trust loans for the borrower;

 

(4)At the time of signing the contract, the borrower has been aware of and
recognized that the loan funds under this contract are from the trust funds
which the lender is trusted to manage. Except for opposite provisions, the loans
under this contract referred to “trust loans”.

 

Hereby, according to the current law of the People's Republic of China and on
the basis of fairness principle, the borrower and the lender reach an agreement
and conclude this contract to comply with.

 

1Definition and Explanation

 

In the contract, except that there are other explanations or implications in the
context, the following words and phrases bear the following meanings:

 

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1.1The borrower/ Wuhan Kingold Jewelry Company: refers to Wuhan Kingold Jewelry
Co., Ltd. and its legal successor.

 

1.2The lender/ Anxin Trust: refers to Anxin Trust Co., Ltd. and its legal
successor.

 

1.3Both parties: refers to the borrower and the lender.

 

1.4This contract: refers to the loan contract signed between the borrower and
the lender as well as its enclosures and any valid change or supplementary
agreement of it.

 

1.5Contract of Guaranty: refers to the contract of guaranty signed between the
borrower and the guarantor numbered AXXT(2016)JHXT01-BZ01 as well as any valid
change or supplementary agreement of it.

 

1.6Pledge contract of Gold: refers to the Pledge contract of gold signed between
the borrower and the guarantor numbered AXXT[2016]JHXT01-ZY01 as well as its
enclosures (include but not limited to the pledged property listing) together
with any valid change or supplementary agreement of it.

 

1.7Insurance Contract: refers to the insurance contract and the insurance policy
(property insurance) together with any of its valid change or supplementary
agreement, signed between the borrower and the PICC Property and Casualty
Company Limited (hereinafter referred to as PICC P&C) on pledge gold, with the
lender as the only beneficiary. The term of the insurance contract (including
renewed term) shall cover the whole pledge term.

 

1.8Security file: the contract of guaranty and the pledge contract of gold under
this contract are jointly called security file.

 

1.9Pledgor: the pledgor and borrower under this contract is the same person,
namely Wuhan Kingold Jewelry Co., Ltd. and its legal successor.

 

1.10Guarantor: refers to Mr. Jia Zhihong, the real controller of the loan.

 

1.11Guarantor: the pledger and the warrantor under this contract are
collectively called as the guarantor.

 

1.12Standard gold: refers to the AU9999 Standard Gold which purity is 999.9(the
gold content is not lower than 999.9‰).

 

1.13Pledge gold: refers to the standard gold which the borrower owns legally and
can be pledged legally, is obtained from the warehouse of Shanghai Gold Exchange
according to relevant regulations and procedures, and is promised to pledge to
the lender in accord with this contract and the pledge contract of gold.

 

1.14Gold price: Except for special agreements, it refers to the afternoon
closing price of standard gold in Shanghai Gold Exchange. Except for additional
implication, the pledge gold price in this contract has the same meaning as gold
price.

 

1.15Pledge Date: refers to the day when each batch of pledge gold is stocked in
the pledged property safe box rented by the borrower.

 

1.16Trust loan: refers to the loans that the lender offers to the borrower
according to this contract and trust funds under the trust plan it is trusted to
manage. Except for additional reference, the “loan” in this contract has the
same meaning as trust loan.

 

1.17Loan period: refers to the loan period stipulated in the article 2.1 in this
contract.

 

1.18Repayment: refers to the repayment of any principal amount and interest of
the trust loan stipulated in this contract.

 

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1.19Value date for interest: refers to the day when the lender offers each loan
funds to the borrower’s special loan account. In regard to the specific date,
the date on the receipt for the loan shall prevail (format of receipt for a loan
see appendix 1). Conditions such as article 6.2.5 in this contract happens, the
value date for interest of each trust loan corresponds to the effective date of
the trust beneficial right of each trust loan (specific date subject to the
lender’s date of announcement).

 

Expiry date for interest: refers to the accounting date of the interest of each
trust loan, namely, (i) during the existence period of trust plan, every six
month calculated from corresponding value date for interest of each trust loan;
(ii) the expiry date of each trust loan or all trust loans (including advances
to the expiry date).

 

1.20Interest payment date: refers to (i) article 1.19 in this contract (i) any
day within the first five working days of each expiry date for interest under
each fund; (ii) article 1.19 in this contract (ii) the expiry date for interest
under funds. Any interest payment date which is not a working day, shall be
extended to the next succeeding working day.

 

1.21Trust plan/ this trust plan: refers to “Loan and assembled fund trust plan
of Anxin·win-win of Kingold Jewelry Company”, subject to the name regulators
approve.

 

1.22Precedent conditions for lending: refers to the premise condition for lender
to offer loans to the RMB loan account of the borrower according to article 3 in
this contract.

 

1.23Accrued fees: refers to all expenses that the borrower shall pay to the
lender including but not limited to all principal amount of the trust loans
under this contract (no more than 30 billion Yuan), interest, liquidated damages
produced when the borrower violates this contract, overdue interest, penalty
interest, damage awards, compound interest, related expenses paid in advance by
the lender, etc. as well as all reasonable fees for the lender to realize the
creditor’s rights. Thereinto, all reasonable fees for the lender to realize the
creditor’s rights include but not limited to the following fees: legal fare,
arbitration fee, property preservation fee, execution fee, valuation fee,
auction fee, fees related to exercising security right, transaction handling
fee, agent fee, registration fee, appraisal fee, safekeeping fee, insurance
premium, notice fee, enquiry fee, attorney fees, notary fees, delivery fee,
travel expense, communication fee, and all kinds of taxes and other related
expense as well as the responsibility of invalid contract that the borrower
shall bear as the contract stipulates.

 

1.24All payment liabilities: refers to the liability that the borrower shall pay
all the accrued fees to the lender according this contract.

 

1.25Default events: refers to any default event stipulated in article 14.1 in
this contract.

 

1.26The expiration or the mature: refers to the following situations: (1) the
expiration of payment date for principle amount and interest of any trust loan
stipulated in this contract; (2) Partial or overall advance of expiration of any
trust loan announced by the lender.

 

1.27Remainder days/ existing days: days accumulated from the disbursement date
of any trust loan to the payment date of all principal amounts and interest of
any trust loan.

 

1.28In this contract when it mentions Business day/ Working day: it shall be
explained as any day on which the lender is open to conduct business except for
legal holidays. Year: refers to every calendar year. Month: refers to every
calendar month. Quarter: refers to every nature quarter.

 

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1.29Assurance fund: According to the Regulations and relevant regulations of
supervision department, the borrower shall subscribe Chinese Trust Fund
according to one percent of the principal amount of the trust loans as the
obligation subscriber.

 

1.30Assurance fund company: refers to the Chinese Security Trust Fund Co., Ltd
established according to the Regulations as well as other companies which
inherent its legal obligations.

 

1.31The Regulations: refers to Trust Industry Security Fund Management
Regulation as well as relevant regulations revised, supplemented and replaced by
supervision department.

 

1.32Supervision department: refers to China Banking Regulatory Commission as
well as other government departments which bear the same obligations of
supervision.

 

1.33Yuan: refers to the legal currency unit of People's Republic of China, RMB,
Yuan.

 

1.34Laws: the laws under this contract refer to laws, administrative
regulations, department rules as well as local laws and regulations and policies
with legal binding. Except for additional stipulations in laws and regulations
or requirements in context, whenever this contract mentions any article of
“laws”, it shall be explained as the effective law text timely revised or newest
publicized.

 

1.35Subject: the subjects of any article and enclosure under this contract are
made for convenience and only for reference, which shall never be considered as
the explanation of that article or enclosure.

 

2Trust loans

 

2.1Amount and term of trust loans

 

2.1.1The trust loans under this contract are RMB loans. The principal amount of
loans is no more than 3 billion Yuan (capital: three billion Yuan only). The
trust loans are disbursed separately. Each loan shall not be more than 400
million Yuan (capital: four hundred million Yuan). The specific disbursement of
each loan shall be determined on the basis of the borrower’s capital needs and
the condition of capital use. The specific amount of each loan is subject to the
real amount disbursed (specifically subject to the receipt for the loan).

 

2.1.2The total term of loans under this contract is 60 months, calculating from
the first day when the first sum of trust loan fund is disbursed to the
borrower’s special loan account(specifically subject to the receipt for the
loan). It is expected to be from _____ 2016 to _____ 2021 (specifically subject
to the receipt for the loan). If the condition agreed in article 6.2.5 occurs,
the term of trust loans shall be calculated from the setup of the trust plan.

 

2.1.3Except for additional agreement, when the starting day of the term of trust
loans does not comply with the actual disbursement day under this contract, the
actual disbursement day shall prevail. Besides, the expiry date of loans agreed
in article 2.1.2 in this contract shall also be adjusted accordingly.

 

2.1.4The lender is entitled to disburse the loans in batch. The term of each
loan is 36 months, which shall not exceed 36 months.

Hereinto:

(1) For any loan which is disbursed within the first existing 24 months
calculated from the value date for interest of the first loan in the whole trust
loan term, the term is 36 months, which is calculated from the day when that
batch of loan is disbursed to the borrower’s special loan account (the specific
date is subject to the receipt for the loan at that time);

 

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(2) For any loan which is disbursed after the first existing 24 months
calculated from the value date for interest of the first loan in the whole trust
loan term, the term shall be calculated from the date when that batch of loan is
disbursed to the borrower’s special loan account (the specific date is subject
to the receipt for the loan at that time) up till to the expiry date of the
total trust loans, namely 60 months.

 

Despite the agreements above, anything occurs as what is agreed in article 6.2.5
in this contract, the term of each trust loan shall be calculated from the
effective date of each trust benefits conforming to each trust loan fund.(
specifically subject to the announcement date of the lender)

 

2.1.5If any agreed condition in this contract occurs, the lender is entitled to
announce the acceleration of maturity for partial or whole loans.

 

2.2The expansion of term

 

2.2.1The term of the trust loans under this contract shall not be expanded. If
both party negotiates and agrees to expand the term, additional agreement to
this contract shall be signed.

 

2.3Payment in advance

 

2.3.1When the term of each loan expires 24 month, the borrower can pay back the
total sum of the trust loan with written application 10 working days in advance
and written approval of the lender; If the term of any batch of trust loan is
less than 24 months calculated from the date of disbursement of the total loan
to the expiry date of the total trust loans, the borrower shall give written
application 10 working days in advance and get a written application of the
lender. Then the borrower can pay back the total trust loans three months in
advance from the expiry date of the total loan.

 

Once the application for payment in advance is submitted, it is irrevocable.
When such application is approved by the lender in written form, the borrower
shall pay back the total loans one for all to the specific account of the lender
on the advanced date which the lender approves to become the payment date. After
the lender receives the payments, the corresponding loans all end in advance.
The trust loan interest shall be calculated according to the actual loan days,
with repayment of principal with interest.

 

2.3.2The borrower shall pay back both of the principal amount and the
corresponding interest of all trust loans as stipulated in article 2.3.1 in this
contract. Then, the loans end in advance.

 

3Precedent condition of disbursement

 

3.1Unless all the precedent conditions stipulated in this contract are all met
or given up by the lender in written form, the lender has no obligation to
disburse any loan under this contract to the borrower.

 

3.2After the lender meets all of the following precedent conditions, trust loans
shall be disbursed to the borrower according to the ways stipulated in this
contract.

 

3.2.1This trust plan has established special account of the trust properties and
has enough funds to disburse the first batch of trust loan.

 

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3.2.2The trust plan has been approved and recorded by the Shanghai Regulatory
Authority of the China Banking Regulatory Commission.

 

3.2.3This contract has been duly signed and notarized. If this contract is
signed by people other than the legal representative of the borrower, a Power of
Attorney stamped with the seal of the borrower and signed or sealed by the legal
representative shall be submitted.

 

3.2.4The borrower has received decision, authorization, approval and consent on
the signature of this contract as well as the transactions carried in the
contract by the powerful policy-making bodies within the company which includes
but not limit to general meetings of shareholders and shareholders’ decisions.
In addition, the lender has received the effective copies of such authorization,
approval and consent. (stamped with the seal of the borrower)

 

3.2.5The contract of Guaranty, Pledge Contract of Gold and Insurance Contract
all have been duly signed and notarized. All the parties are entitled to get the
effective resolution, authorization, approval and agreement provided by the
executive department of the company according to the related laws and
legislation or the regulations, and the lender has obtained the Insurance
Contract as well as the copies of the above documents (stamped with the seal of
the borrower)

 

3.2.6Before the issue of the trust loans, the borrower has provided all the
pledged gold as the pledge guarantee which is calculated by the loan-to-value
ratio to the lender and has met the following demands: (i) to have deposited the
pledge gold into the safe of Wuhan branch of the Industrial Bank or other safes
rent by the lender in other banks (hereinafter referred to as pledge safe) (the
password of the pledge safe and one of the keys are kept by the lender, and the
other by PICC P&C), and before depositing the pledge gold into the safe, the
related insurance is bound to be bought for the pledge gold according to the
contract. (ii) the related procedures have been gone through in the Jiang’an
branch of Wuhan Finance Bureau and the lender has gotten the Certificate of
Registration of Real Estate Mortgage.

 

3.2.7Up till to the disbursement of each loan, the Contract of Guaranty, Pledge
Contract of Gold and Insurance Contract all have been duly signed and notarized.
Nothing may lead the borrower and guarantor to make unreal and ineffective
articles of statement or guaranty under this contract, guaranty documents and
Insurance Contract.

 

3.2.8Up till to the disbursement of each loan, there is no event of default or
expected event of default for the borrower and the guarantor. Besides, each loan
that the guarantor provides guaranty for the lender will have no event of
default.

 

3.2.9The real controller Jia Zhihong promises to remain the shareholding
position of the borrower before the disbursement of trust loans and promises to
remain the final principal of the operation and management of the borrow during
the existing period of the trust plan.

 

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3.2.10Laws and regulations, rules and supervision departments do not forbid and
restrict the lender to disburse trust loans under this contract.

 

3.2.11Other loan conditions reasonably required by the lender.

 

4Disbursement of loans

 

4.1According to articles in this contract, the lender is supposed to grant the
loans to the loan account of the borrower who has been confirmed to be in accord
with the credit terms.

 

4.2If confirmed by the borrower, the lender is entitled to grant the credit
loans on installments according to the capital arrangements, the actual fund
raising situation, control standard, the borrower’s capital needs as well as
fund position in the trust investment plan. The lender is also entitled to
decide the amount of the trust loans and the day of granting the trust loans
unilaterally. Meanwhile, the lender is entitled to reduce the trust loans or
even refuse to grant part or all of the trust loans based on the management
situation and bail payment of the borrower. The lender is not considered to have
broken the contract in the above situations; therefore, the borrower cannot
require the lender to shoulder the responsibility.

 

4.3Regardless of the above initiating loan prerequisites, the lender is entitled
to initiate the loan ahead of the time when all the prerequisites have not been
fully met; if the lender initiate the loans ahead of time, it neither means that
the lender gives up the obligations in the contract nor the security does not
fully or partially carries out the obligation and the security document of the
contract. The lender is entitled to raise a plea, pursue legal actions and take
a legal action against the borrower and the security at any time if they do not
carry out or fully carry out the obligations in the contract as well as in the
security document.

 

5The usage of trust loan

 

5.1The borrower shall use the trust loans under this contract to supplement
circulating funds and purchase raw materials of AU9999 Standard Gold which
purity is 999.9(the gold content is not lower than 999.9‰).

 

5.2The trust loans in the contract cannot be embezzled by the borrower. The
borrower is supposed to promise that the trust loans shall be used according to
the contract, which does not cover the overseas investment, stock investment,
the real estate investment as well as steel trade. The investment of the trust
loans cannot break the laws, legislations and cannot be invested in all the
projects that the government prohibits and the government has not confirmed. The
trust loans cannot be applied to the project that the trust loans have not been
included.

 

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5.3The lender is entitled to ask the borrower to issue the related documents and
information according to the laws and the stipulation issued by regulatory
authorities, which include but not limited to the contract/agreement,
invoice/receipt, voucher and warehouse warrant of gold. The borrower shall
grantee that the provided material should be real, correct, complete and
effective so that the lender can supervise and verify the usage condition of the
trust loans in the contract.

 

6Interest

 

6.1Trust loan interest rate

 

The trust loan interest rate under this contract is annual interest rate 14.8%.

 

The trust loan interest rate under this contract is fixed, within the validity
of the contract, trust loan interest rate shall not be adjusted.

 

6.2Interest calculation

 

6.2.1The trust loan interest under this contract is calculated by day, day
interest rate

 

6.2.2The interest of each trust loans under this contract is calculated from
their Respective value date for interest..

 

6.2.3Each loan interest under this contract is calculated separately. The
interest corresponding to each loan is calculated from its corresponding value
date for interest. And the interest is calculated and collected according to the
actual working days of the trust loan fund.

 

6.2.4The calculating formula of interest each day is: interest each day=
principal balance of this day's trust loan*day interest rate.

 

6.2.5If any sum of trust loan is failed to be paid to the Borrower on
corresponding effective day of trust beneficiary right not due to the Lender
(includes but no limited to that the Lender fails to realizing loan prerequisite
agreed in Article 3.2 of this Contract), the Borrower agrees to calculate
corresponding anticipated interest losses during trust fund is not paid as
scheduled according to loan rate agreed in this Contract and compensate the
borrower. Base on this, both parties agree that in above-mentioned case both
parties acknowledge the value date for interest of every sum of trust loan is
the effective day of corresponding trust beneficiary right (subject to the day
announced by the Loan).

 

6.3Payment of interest

 

6.3.1Unless otherwise agreed in the contract, if the trust loan granting date is
between January 1st to July 30th and December 21st to November 31st in some
year, then during trust loan duration, the borrower should pay the payable
interest of various trust loans under this contract according to the following
arrangement and should pay unpaid trust loan principals and remaining interest
to the lender on the due date of various trust loans or on the due date of all
trust loans(including advanced due date). The details are as follows:

 

Within five days before the first day after each trust loan is issued, the
interest amount the borrower should pay to the lender=the principal amount of
the trust loan*annual interest rate*duration date from interest-calculating
date(including) to the interest-settling date(excluding) of the trust loan/360.

 

On the due date of each trust loan(including advanced due date), the borrower
should pay the remaining interest and unpaid principals of the trust loan to the
lender, paying amount=the principal amount of the trust loan*(1 + annual
interest rate of the loan*duration days of the trust loan/360) - interest paid
for the trust loan by the borrower.

 

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On the due date of all trust loans(including advanced due date), the borrower
should pay remaining interest and outstanding principals of all trust loans to
the lender , paying amount 一∑ principal amount of each trust loans*(1 + annual
interest rate of the loan*duration date of each trust loans/360)- interest
already paid by the borrower- principal already paid by the borrower.

 

6.3.2If the trust loan granting date is some day between July 1st to December
20th every year, during the trust loan duration, the borrower should, within 5
days after December 20th every year, pay interest calculated by 3% of the total
amount of the principal of the trust loan granted from July 1st to December 20th
that year to the lender.

 

The borrower should pay the payable interest of each trust loans under this
contract to the lender as per the following arrangements on each interest-paying
date, and should pay outstanding trust loan principals and remaining interest to
the lender on the due date of each trust loans or all trust loans. The details
are as follows:

 

Within five working days before the first interest-settling date after the grant
of each trust loan, the interest amount the borrower should pay to the lender
=the principal of the trust loan*(annual interest rate of the loan -
3%)*duration date from interest-calculating date(including) to interest-settling
date(excluding) of the trust loan/360.

 

On interest-paying date of every other trust loan except for trust loan
stipulated in previously-stated loans during the duration of the trust loans,
the interest the borrower should pay to the lender=the remaining amount of the
trust loan principal*(annual interest of the loan-3%)* duration date of the
trust loan from the last interest-settling date(including) to this
interest-settling date(excluding) /360.

 

On the due date of each trust loan(including advanced due date), the borrower
should pay the remaining interest and outstanding principal of the trust loan to
the lender, paying amount=principal of the trust loan*(1 + annual interest rate
of the loan*duration of the trust loan/360) -the interest the borrower paid for
the trust fund.

 

On the due date of all trust loans(including advanced due date), the borrower
should pay remaining interest and outstanding principals of all trust loans to
the lender, paying amount=∑principal of various trust loans*(1 + annual interest
rate of the loan*duration of various trust loans/360)-the interest already paid
by the borrower- the principal already paid by the borrower.

 

6.4Overdue interest

 

If the borrower doesn't pay the principal and interest of the loan according to
the contrast, then during the loan's overdue period, besides continuing
calculating and collecting loan interest according to the Article 6.3, the
lender has the right to collect overdue loan interest during overdue period. The
overdue loan interest is calculated and collected everyday automatically
according to one in a thousand of the remaining of the loan principal from its
overdue date

 

7Repayment

 

7.1The lender should repay each batch of trust loan principal and/or interest to
the account specified by the lender according to the contract. Unless otherwise
agreed in the contract, the date which the trust loan principal or interest
arrive at the designated account is the actual repayment date.

 

7.2The trust loan principal and interest repaid by the borrower should be
remitted to the following account specified by the lender:

Account name: Anxin Trust Co., Ltd.

Deposit bank: Shanghai Pudong Subbranch of China Construction Bank

Account number: 31050161364000000891

If the lender adjusts the above repayment account, the repayment account should
be subject to Paying Notice sent by the lender.

 

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7.3The money repaying the trust loan comes from the sales income of the
borrower, cash flow produced through processing Standard Gold which purity is
999.9 into cash or other capital which can be used to repay the loan.

 

7.4Insurance fund

 

The borrower knows and understands provisions in Managing Methods, and knows
that he is the subscription obligor of the insurance fund, and agrees to pay the
insurance fund according to Managing Methods.

 

7.4.1Payment of insurance fund

The borrower, as the subscription obligor of the insurance fund, should conform
to provisions in Managing Methods. He should pay the insurance fund timely and
sufficiently. The detailed arrangements by which the borrower pays the insurance
fund are as follows:

(1)Amount paid

The insurance fund the borrower should pay= principal amount of various trust
fund actually granted by the lender*1%

(2)Paying method

Within 30 working days from the date each trust loan is granted, the borrower
should pay insurance fund to the specified account which is opened in insurance
fund custodian bank by the lender. The detailed information of the account is as
follows:

Account name: Anxin Trust Co., Ltd.

Account number:

Deposit bank:

 

The borrower is only responsible for opening, paying and checking
above-mentioned account according to Management Method, the above-mentioned
behaviors of the Borrower shall not be deemed as to take any joint liability or
warranty liability for the obligation of the Lender to purchase insurance funds,
the borrower takes no joint obligation, supplementary obligation or payment
obligation for the obligation of the Lender to purchase insurance funds.
Meanwhile, the borrower ascertains that, under no circumstances should the
borrower delay or refuse to perform the loan clear-off obligation on account of
insurance fund loss or not timely paid insurance fund.

 

7.4.2Process of insurance fund principal and income

 

The lender should, according to Managing Methods and related provisions of
supervising departments, put the money paid by the borrower into insurance fund
special account Natural quarterly. Before the fund goes into insurance fund
special account, its income is calculated in bank current deposit interest rate.
After the fund goes into insurance special account, the formula for calculating
the insurance fund income is as follows:

Insurance fund income=Insurance fund principal*One-year annual interest
rate(percentage) *days/365

 

The aforementioned “One-year annual interest rate” means financial institutions
RMB one year fixed deposit benchmark interest rate published by People’s Bank of
China. If interest rate adjustment is encountered, calculate and pay the
interest according to one year fixed deposit benchmark interest rate publicized
on income distribution day, do not calculate by segment. For days count the
starting date not the ending date, namely from the day when the insurance fund
custodian bank special account is paid to the day before settling.

 

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7.4.3After the completion of trust plan clearance, the lender should settle with
insurance fund company according to Managing Methods and related provisions of
supervisory departments. After the completion of settling, the lender should
return insurance fund and pay the insurance fund income to the borrower.

 

The borrower agrees and authorizes that, within the term of trust plan, the
lender has the right to put all or part of the insurance fund principal and
income which should be paid to the borrower to trust property special account
and to deduct from that account, so as to pay off any payable fund of the
borrower/guarantor under this contract.

 

8Loan Guarantee

 

8.1The borrower’s payment obligations for principal and interests of all trust
loans as well as other payables (including but not limited to payment
obligations for overdue interests, default interests, liquidated damages, damage
awards, all expenses incurred for the Lender’s credit realization, and payables
by all other borrowers), shall be guaranteed by the borrower with its legally
owned and pledged standard gold, with the Guarantor offering personal joint
liability guaranty. In case the borrower fails to fulfill or incompletely
fulfill principal and interest payment obligations for any trust loan hereunder
or part or all of payment obligations for other payables, or in case of other
default circumstances under this Contract or Gold Pledge Contract, the Lender
shall be entitled to implement the right of pledge for all gold pledged it will
occupy on the occasion, and request the guarantor to bear joint liability
guaranty.

 

8.2Gold pledge guarantee

 

8.2.1The borrower shall properly sign Gold Pledge Contract with the Lender and
handle notarial acts upon signature of this Contract, and provide pledged gold
in relevant sum calculated according to pledge rate of such loans as pledge
guarantee, and store such pledged gold into hostage safe box; the specific
amount of pledged gold in all batches shall be subject to Hostage List attached
to Gold Pledge Contract, the Parties shall sign a Hostage List for every
follow-up loan except for the first loan. All hostage lists serve as an integral
part of this Contract with the same legal force. The Lender shall release
corresponding trust loans upon registration of pledge for gold in each batch,
any batch of pledged gold shall be guaranteed with all payment obligations
hereunder.

 

8.2.2The sum of gold to be pledged for each loan shall be determined by the gold
price on the previous trading day of the pledge day for the pledged gold in
related batch, under the premise of loan pledge rate not exceeding 80% (matching
with insurance amount as agreed under Article 8.2.3 hereof).

 

For convenience of gold amount calculation, the pledge rate of each loan shall
be separately calculated, that is Loan pledge rate = Sum of principal balance of
such trust loan and one year’s loan interests / (Amount of pledged gold in
related batch * Price of pledged gold) ≦80%. In case the gold price falls below
margin line (inclusive) of each loan for 3 consecutive trading days during
existence of this Contract, the short position shall be covered based on
stipulations of Article 8.3 hereof.

 

To avoid ambiguity, “price of pledged gold” as stated herein is real-time gold
price, i.e. the gold price on the previous trading day of that day pledging such
batch of pledged gold in case of pledge of pledged gold in any batch, the gold
price on the previous trading day of covering day in case of super
addition/short coverage of any trust loan, and gold price on the previous
trading day of the return day in case of return of pledged gold/cash deposit
added for each trust loan, and so on.

 

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8.2.3The borrower shall properly sign Insurance Contract with PICC regarding
pledged gold upon signature of this Contract and handle notarial acts, and
purchase property insurance from PICC with the borrower as sole beneficiary for
quality, purity, weight and risks on damages, loss, robbery of pledged gold in
related batch (including those added) during the pledge period prior to delivery
of any batch of pledged gold to hostage safe box (i.e. prior to the Lender’s
release of any loan by this Contract), or prior to provision of adding pledged
gold to the Lender by this Contract; the amount of insurance claims = Gold price
on the previous trading day of gold pledge * 80% of weight of such gold. The
insurance period of any batch of pledged gold is one year (inclusive) from its
pledge day, the Lender needs to renew the insurance 1 month before expiry of its
insurance period, which shall be no less than 1 year, so as to guarantee to hold
a guarantee slip with remaining validity no less than 6 months in case of each
application for loans. Where the borrower uses any reasons to refuse or fail to
extend the insurance period of any batch of pledged gold within stipulated term,
or the extended period is less than one year, the borrower shall be entitled to
announce early expiry of all trust loans hereunder, and fulfill right of pledge
against all gold pledged.

 

8.3Additional Pledge Gold or Additional Cash

 

8.3.1The borrower is obligated to provide additional Pledge Gold (hereinafter
referred to as “additional Pledge Gold”) and / or call margin by corresponding
money (hereinafter referred to as “additional margin ”). Every sum of loan shall
set up individual call margin line, the computing standards of all call margin
lines shall be conformed, that is 82% of Gold Price on previous day of Pledge
Day of corresponding Pledge Gold plus 1 Yuan/gram. If the Gold Price dropped
below call margin line (included) of any sum of loan for three continuous
transaction days, the borrower shall complement additional Pledge Gold or
additional margin within 2 working days after above-mentioned event, and keep
the pledge rate of this sum of loan be not higher than 80%. If the Gold Price
rise again above call margin line (excluded) for three continuous transaction
days, according to the written application of the borrower, the Lender may
return partial or the whole additional margin or remove the ledge of and release
partial or the whole additional Pledge Gold, however after returning
corresponding part of additional margin or additional Pledge Gold, the pledge
rate of this sum of loan shall be lower than 80% (included).

 

The borrower acknowledges that, any batch of additional Pledge Gold under this
Contract shall be the guarantee for the borrower to perform all the payment
obligations together with other Pledge Gold. At the same time, in order to avoid
ambiguity, all the “Pledge Gold” said in this Contract includes additional
Pledge Gold (if any).

 

8.3.2The computing methods for the amount of the additional margin (see detail
in formula 1) and the quantity of the additional Pledge Gold (see detail in
formula 2), and the conditions that shall be satisfied when calling margin by
additional Pledge Gold and additional margin (see detail in formula 3) at the
same time are as follows:

(1) Formula 1: Computational Formula for Amount of Additional Margin

 

Summation of principal balance of this sum of trust loan and annual interest–
balance of additional margin paid for this sum of trust loan before calling
margin day–payable additional margin amount

 =80%

 

Gold Price on the transaction day before calling margin day* quantity of the
Pledge Gold provided for this sum of trust loan before calling margin

 

The additional margin=Summation of principal balance of this sum of trust loan
and annual interest– balance of additional margin paid for this sum of trust
loan before calling margin day– Gold Price on the transaction day before calling
margin day* quantity of the Pledge Gold provided for this sum of trust loan
before calling margin*80%.

 

The additional margin shall be paid to the account appointed by the Lender. In
order to avoid ambiguity, in this Contract, the “call margin day” of additional
margin corresponded to any sum of trust loan is the day when all amount of this
sum of additional margin is remitted to the account appointed by the Lender,
“return day” is the day when all amount of this sum of additional margin is
remitted to the account appointed by the borrower.

(2) Formula 2: Computation Formula for Quantity of Additional Pledge Gold

 

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Summation of principal balance of this sum of trust loan and annual interest–
balance of additional margin paid for this sum of trust loan before calling
margin day

=80%

 

Gold Price on the transaction day before calling margin day*( quantity of the
Pledge Gold provided for this sum of trust loan before calling margin+ quantity
of additional Pledge Gold that shall be offered)

 

Quantity of Additional Pledge Gold =(Summation of principal balance of this sum
of trust loan and annual interest–balance of additional margin paid for this sum
of trust loan before calling margin day) ÷80%÷ Gold Price on the transaction day
before calling margin day– quantity of Pledge Gold provided for this sum of
trust loan before calling margin day.

 

Before providing any batch of additional Pledge Gold, the borrower shall update
and sign new Hostage List together with the Lender, and register the pledge for
this batch of additional Pledge Gold at Jiang’an Substation of Wuhan Industrial
and Commercial Bureau, and purchase corresponding insurance product for this
batch of additional Pledge Gold according to agreement of this Contract
immediately. The time and quantity of additional Pledge Gold shall be subject to
the records of Chattel Mortgage Registration Certificate obtained by the Lender.

 

The borrower shall deposit the additional Pledge Gold in the hostage safe box,
in order to avoid ambiguity, in this Contract, the “call margin day” of
additional margin corresponded to any sum of trust loan is the day when all
amount of this sum of additional Pledge Gold is remitted to the account
appointed by the Lender, “return day” is the day when all amount of this sum of
additional Pledge Gold is remitted to the account appointed by the borrower
(namely the Lender notifies the borrower to go to the bank of the safe deposit
box and deliver the Pledge Gold to the borrower directly on the same day).

 

(3) Formula 3: If call margin by additional Pledge Gold and additional margin at
the same time, following conditions shall be satisfied after calling margin:

 

Summation of principal balance of this sum of trust loan and annual interest–
balance of additional margin paid for this sum of trust loan before calling
margin day–payable additional margin amount

≤80%

 

Standard Gold Price on the transaction day before calling margin day*( quantity
of the additional Pledge Gold provided for this sum of trust loan before calling
margin+ quantity of additional Pledge Gold that shall be offered)

 

8.3.3For any reason, if the borrower refuses to and fails to fully compensate
additional margin or additional Pledge Gold, or compensate other mortgage and
pledge that is accepted by the Lender and has equal estimated value to
corresponding additional margin and additional Pledge Gold according to
agreements of this Contract, the Lender is entitled to declare that all trust
loan(s) under Main Contracts are due in advance, and require the borrower to
perform all the payment obligations under Main Contracts immediately, otherwise,
the Pledgor is entitled to exercise mortgage to all the Pledge Gold, and use
funds gained from realizing hostage to pay off all unpaid payable amounts of the
borrower under Main Contracts for priority; if the income is insufficient to pay
off above-mentioned amount, then Borrower shall directly complement the Lender,
if the income is more than above-mentioned amount, the excess shall be return to
the borrower.

 

If the pledge gold of any sum of loan is in the condition that the pledge
preservation is delayed and not timely, additional margin or additional pledge
gold is compensated insufficiently, the Lender it entitled to declare that all
loans are due in advance, exercise mortgage to all the pledge gold, and take
priority in compensation from income of exercising mortgage.

 

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8.3.4The additional margin paid by the borrower shall be paid into following
bank account of the Lender:

 

Account Name: Anxin Trust Co., Ltd.

Opening Bank:

Account No.:

 

If the above-mentioned bank account is needed to be changed, the Lender shall
notify the borrower in written 5 working days in advance.

 

8.3.5If the borrower completes all the gold pledge, insurance obligations and
corresponding complements and call margin obligations according to the
agreements of this Contract, after the principal and interest of any sum of loan
has been fully paid and the borrower has performed all the payment obligations
corresponded to the loan, the Lender is entitled to decide release the pledge of
corresponding gold provided by the borrower in advance, however, the pledge rate
of this loan shall be below 80% (included) after discharging the gold.

 

8.4Warranty

 

Mr. Jia Zhihong, the actual control of the Borrower, provides irrepealable joint
liability guarantee for all payment obligations under this Contract.

 

9Payment

 

9.1The lender and the borrower shall pay relevant taxes and fees in accordance
with the provisions of the law in China.

 

9.2Trust loans cost involved under this contract including but not limited to
notary fees, legal fees, audit fees, rent, insurance fee, registration fee,
enquiry fee and service fee shall be bear and paid by the borrower.

 

9.3The borrower under this contract shall pay all the money that should be paid
in full and should not be attached to any claim or limit and shall not have any
nature of tax deduction or withholding under this contract.

 

9.4When the borrower pay a certain sum of accounts payable to the lender
according to the provisions of this contract (including but not limited to
breach of contract, damage awards, penalty interest, interest, principal), if
the day of accounts payable is not the day of the working day of the lender, it
will postpone to the next succeeding working day. Trust loan principal and
interest will continue to calculate the interest during expansion period in
accordance with this contract.

 

9.5When the borrower pay a certain sum of accounts payable to the lender
according to the provisions of this contract (including but not limited to
breach of contract, damage awards, penalty interest, interest, principal), the
borrower should pay to the account designated by the lender in the day of the
cash payment and send a copy of the payment voucher copy or the copies of the
seal of the unitto the lender on the same day.

 

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9.6When the borrower’s repay money is not enough to pay off all the due payable
amount under this contract (including but not limited to the trust loan
principal, interest, default interest, liquidated damages, damages, the cost of
the creditor's rights, etc.), the lender shall have the right to use the money
to return the other payables (including the cost of the creditor's rights,
penalty interest, damages, liquidated damages, etc.), interest and principal and
etc. in order.

 

10Capital Regulation

 

10.1In order to ensure the trust loans under this contract on the use of the
funds in accordance with the contract is applied, the borrower shall open a loan
account by the lender in the designated bank according to the requirements.

 

10.1.1Trust Loans Special Account

Account name: Wuhan Kingold Jewelry Co., Ltd.

Bank: Wuhan Jiangan sub-branch bank of China Construction Bank

Account No. : 42001116208053017159

 

The trust loans account opened for lenders in a designated bank by the borrower
in accordance with the requirements , special to receive loans under this
contract. The lender shall have the right to require the borrower to adjust the
loan special account, and open the new loans account in the designated bank. The
new loans account should fit Loan account change confirmation letter send by the
borrower.

 

11Representations and Warranties matters

 

11.1The borrower make the following statement and guarantee to the lender in the
date of this contract signed , and confirm that the lender conclude the
following contract relying on the representations and warranties, and these
statements and guarantee are continuous effective during the effective period of
this contract and the subordinate contracts.

 

11.1.1The established and validly existing enterprise as a legal person
according to the laws and regulations of the People's Republic of China, the
borrower system has the right to punish all its property completely and engage
in its business license in the rules of business; As of each loan issuing date
of this contract, the borrower is in normal operation condition. There is no any
existing or reasonable expectations that may lead to the borrower in the trust
loan term cannot continue to operate normally.

 

11.1.2The borrower shall have the right to sign and perform this contract and
the relevant financing documents. All the necessary measures and other action
has taken, making it have all the necessary rights and authorization to sign and
perform this contract.

 

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11.1.3Signing and performing this contract is voluntary by borrowers, is their
true meaning, and passes all the necessary legal authorization. the
authorization and authorization to sign and perform not contrary to the borrower
under the articles of association or any laws and regulations or the contract
binding upon the borrower. The formalities that used to sign and perform this
contract by the borrower are to be completed legally and fully effective.

 

11.1.4Except that has disclosed to the lender and the lender in writing to sign
for the situation of the disclosure document records, borrowers did not hide any
that has occurred or is about to occur may make lenders don't agree to grant
trust loans under this contract of the following events:

 

(1)  There is no event of default has occurred by the borrower and no event of
default reasonably expected for any withdrawal under this contract ;There is no
other binding agreement or other documents constitute a default under, and may
cause serious adverse effects of other events or circumstances;

 

(2)  The borrower violate the obligations that signed by him and other creditors
under this credit and debt agreement;

 

(3)  Any pending litigation, arbitration, administrative procedures, judicial
execution of the program /or the administrative authority of similar nature/or
other legal process;

 

(4)  The borrower and its shareholders, actual controllers do not have the
illegal/unlawful behavior and other events that Can be reasonably expected by
the borrower and its shareholders, actual controllers, their actions fault
caused by it in the process of litigation, arbitration and administrative,
judicial and/or administrative organs of the executable program and/or other
legal proceedings with similar properties ;

 

(5)  The borrower bear debt, contingent liabilities, or to a third person to
provide mortgage, pledge, and other guarantee;

 

(6)  Other financial condition affecting the borrower and solvency.

 

11.1.5All documents, data, reports and documents to the lender for the trust
loans under this contract provided by the borrower are accurate, true, complete
and effective; There are no misleading and no any missing important facts.

 

11.1.6The obligation is the duty of legal and valid under this contract of the
borrower and it has the legally binding; the borrower did not involved any
liquidation, dissolution, merger, division or similar legal process; The
borrower did not involved in that has a significant adverse effect of civil,
criminal, administrative litigation or arbitration proceeding to the borrower's
ability that perform this contract.

 

11.1.7Whether the borrower has been or will counter guarantee agreement or
similar agreement with the guarantor for its warranty obligations under this
contract. The agreement will not damage the lender in any of the rights and
interests under this contract on the law or fact.

 

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11.1.8Any important asset of the borrower is not involved in any enforcement,
property preservation, sealing up, distraining, lien, regulation, or deduct the
deposit by financial institutions.

 

11.1.9The borrower, guarantor should provide the last quarter financial reports
to the lender after the expiry of each natural quarter within 15 days; The
borrower, guarantor guarantee the all financial statements and audit report is
submitted in accordance with relevant laws and the report indicate their
financial condition, etc. truly, fairly.

 

11.1.10The borrower promise that they will not allocate profit or pay off debt
to its share holders in trust loans surviving period.

 

11.1.11The borrower promises that its creditor's rights of the guarantor/issuer
is inferior to creditor's rights of the guarantor by the borrower in trust loans
surviving period.

 

11.1.12The borrower agrees that the lender inquire the borrower's credit
standing in the People's bank of China and approved by the competent department
of credit investigation to establish credit database or the relevant units and
department sand agrees that the lender provide the borrower information to the
People's bank of China and approved by the competent department of credit
investigation to establish credit database. And borrower agrees that the lender
can reasonable use and disclose the borrower’s information for business needs.

 

The borrower guarantees that they repay the full specified amount trust loan
principal and interest in accordance with the contract on time; The lender shall
have the right to be notified to the relevant department or unit, has the right
to make announcement collection through the news media for borrowers default
loan principal and interest of the trust or other default situation.

 

11.1.13The borrower promise that they were aware and fully understand the
Management Method and regulatory rules, and guarantee that they will pay full
assurance fund amount on schedule.

 

11.2The borrower hereby further represents and warrants from the day of signing
this contract to the day of all payments are paid off under this contract that
will observe each item stipulated in article 11.1 above statement and guarantee
correctly and fully in accordance with the situation at that time unless the
lender in writing to give up.

 

12The Agreed Items

 

In addition to the other terms and conditions of this contract, during the
period of the trust loan, the following items will be further agreed between the
borrower and lenders:

 

12.1The lender can check and understand the use of the loan at any time in a
variety of reasonable ways; the borrower have to actively cooperate with the
lender to make the lender understand the usage of the loan and their operating
conditions according to the reasonable requirements of the lender to provide the
relevant materials.

 

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12.2During the period of the credit loan, without the prior written consent of
the lender, the borrower could not use their legal standard gold to provide a
guaranty to other people except the lender. When the borrower dispose of the
major material assets, and change the practical control right and so on, they
should get the written consent of the lender in advance.

 

12.3Before the borrower repay all the trust loan principal and interest under
this contract, such as taking actions like contracting, leasing and the reform
of the shareholding system, joint, combination, merger, division, joint venture,
material assets transferring, control rights transferring, application for
closure, application for dissolution, application for bankruptcy, and other
actions which enable to cause the changes of creditors’ rights and debt
relations or the influences on the implementation of the creditors’ rights of
the lender, they should give written notice to the lender in advance, and obtain
the consent of the lender, at the same time, carry out the liquidation
liabilities or debts in advance, otherwise they can not take the above listed
actions.

 

12.4The borrower should ensure that the submitted financial statements to the
lender are drawn up in accordance with Chinese accounting standards.

 

12.5The borrower should promise that they will not dissolute, liquidate, and
influence the lender’s rights and interests before they make the preserved
measures on the loan creditor's rights without the prior written consent made by
the lender.

 

12.6The repayment order of the debt under the items of this contract is prior to
the debts of the borrower to its shareholders, at the same time, the borrower
pledge that they will not violate the normal repayment order to pay off the
other loans preferentially. What’s more, they will not sign any contract or
agreement which will make the trust loans under this contract lie in a
subordinate or inferior position at present and in the future.

 

12.7If the following situations occur, the borrower should notify the lender in
5 business days:

 

12.7.1The events, such as major legal litigation, arbitration or administrative
disposal programs or deduction of the deposits by the financial institutions
which influence the lender’s interests;

 

12.7.2If any default event appears under this contract, the borrower should
explain the nature and duration, and explain what action has been taken or what
measures will take;

 

12.7.3When the borrower is aware of himself or any important assets having been
involved in any legal proceedings or arbitration proceedings, enforcement or
seizure or detainment or other similar measures, the borrower should inform the
lender in written notice according to the provisions of this article, besides,
they should also list the constituted influences or the possible influences in
detail and the remedial measures which have been taken or planned to take;

 

12.7.4If the borrower have economic disputes with a third person for the
economic activities or accidental events which affect the borrower to carry out
business activities normally, such as production halts, closure, the
cancellation of registration, revoking the business license, engagement in the
illegal activities of the legal representatives or the principal persons,
involving major litigation activities, appearance of the serious difficulties in
the production and business operation, deterioration of the financial
conditions, etc;

 

12.7.5Any event that may happen or has happened, which has an effect on the
borrower’ normal repayment;

 

12.7.6If the borrower need to change the legal representatives, the authorized
representatives, correspondence address, name of the unit, or the major changes
in the financial and personnel aspects, and the changes in the articles of
association of the borrower;

 

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12.7.7If the guarantor under this contract appear the situations of production
halts, closure, the cancellation of registration, revoking of the business
license, bankruptcy and operating loss, and loss the corresponding guaranteed
capabilities related to this loan partly or completely, the borrower should
timely provide the other guaranteed measures approved by the lender.

 

12.8Without the written consent of the opposite side, both sides should not
disclose the opposite side’s business secrets to third parties, including
operating information, management information, technical information, customers’
information and other business information which can bring economic benefits and
are not known by the public.

 

12.9The borrower state here in particular, once the borrower breach the contract
or the borrower do not repay the trust loan principal and interest stimulated by
the contract, and the borrower themselves have no enough property to repay the
debt, with regard to any creditor’s right, receivables, and other property
rights possessed by the borrower in allusion to the third party, the lender has
the preferred subrogation to reimburse rights.

 

13Events of default

 

13.1Any one of the following events shall form the borrower’ default of this
contract:

 

13.1.1If the borrower appear the big earnings volatility and significant legal
litigation which affect the abilities of the borrower to perform the obligations
under this contract;

 

13.1.2If the borrower violates the provisions of this contract, without the
written consent of the lender, arbitrarily uses or transfers loan funds in the
special account;

 

13.1.3If the borrower fails to repay the credit loan principal and interest,
overdue interest, default interest, liquidated damages and any other payables in
accordance with the provisions of this contract, the cognizance of such default
is applicable to any loan. That is to say, the delay or underpay of any loan’s
principal and interest, overdue interest, penalty interest, liquidated damages
and any other payables under this contract shall constitute a fundamental
default of this contract, and the lender have the right to take measures
according to the article 14;

 

13.1.4If any important asset of the borrower has been involved in any
enforcement, sealing up, distrain, lien, regulated measures or similar measures;

 

13.1.5If the borrower do not totally disclose all the debts connected with the
company, such as the lender’ compulsory enforcement by other creditors’ applying
to the people’s court due to the borrower or other persons’ debts, the borrower
shall bear the liability for default of the contract, and pay liquidated damages
to the lender according to five percent of the total trust loans’ principal.

 

13.1.6Any representation or warranty made by the borrower under the items of
this contract is incorrect, untrue, misleading, violated, or the representation
or warranty has been proved to be incorrect, untrue, misleading, and violated
when they are made or considered to be made, and has caused that the reasonably
expected trust loan principal and interest can not be fully repaid.

 

13.1.7Because of the changes in the laws or the executive orders of any
government, the business situations of the borrower or any of their important
assets have changed significantly or possible events or situations which may
lead to the big changes. However, the changes, events, or situations have been
considered by the lender reasonably to have constituted or possibly constitute
the significant adverse impacts on the borrower’ repaid capabilities under the
items of the contract;

 

13.1.8The borrower do not materially comply with or perform any one of its
commitments and obligations under the items of this contract;

 

13.1.9Without the written consent of the lender, the borrower sets the
guaranteed interests on the fixed assets formed by main assets or the trust
loans under the items of this contract happened some events which have produced
significant adverse impacts on the performed capabilities on the obligations
under the items of this contract;

 

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13.1.10The borrower are ordered to terminate the business due to going out of
business, dissolution, cancellation, closure of the business, bankruptcy and
other reasons;

 

13.1.11The borrower’s legal representatives or the principal persons escape,
disappear, suspect of a crime, and be taken compulsory measures;

 

13.1.12The borrower or the guarantor have involved in or is about to involve in
major litigation, arbitration, and other legal disputes;

 

13.1.13The borrower appears some big events or situations of cross default which
fail to perform the borrowing or financing made with other financial
institutions or the obligations of guaranty contracts, etc.;

 

13.1.14Without the lender’s consent, the borrower change the purpose of the loan
arbitrarily, or use the loan to proceed illegal and improper tradings;

 

13.1.15The borrower uses the false contract with the related party to discount
or pledge to the banks, and withdraw the bank capital illegally or extend the
credit based on the creditors’ rights like receivables and notes receivable
which have no real trade backgrounds;

 

13.1.16The borrower who refuses to accept the supervision and inspection of the
lender on the usages of the loans and the related business financial activities;

 

13.1.17The borrower appears situations of the major merger, acquisition and
reorganization, transfer of equity, and the sale of real estate, etc., which
have affected or may affect the loan security.

 

13.1.18The borrower deliberately evades the debts of financial enterprises
through the related party transactions;

 

13.1.19Other situations considered by the lender which can lead to the failure
to repay the loan principal and interest on time under the items of this
contract;

 

13.1.20Other defaulted behaviors according to the relevant laws and regulations
of this contract.

 

13.2If the guarantor appears one of the following circumstances, the borrower
shall be considered to default under this contract, and the lender shall have
the right to take relieved measures stipulated by this contract:

 

13.2.1The guarantee which are not established, inactive, invalid, being
dismantled and lifted under the items of this contract; the guarantors default
or clearly indicate or show that they will not fulfill the guaranteed
responsibility; or the guarantor or warrantor loss part or all of the guaranteed
qualifications; the collateral value reduces or appear some other changes;
what’s more, within the time schedule made by the lender, the borrower does not
supple according to this contract’s stipulation or fail to timely provide new
collateral or take other preserved measures of creditors’ rights approved by the
lender;

 

13.2.2The borrow underwrites insurance for the pledge gold and renew in time,
which is not in accordance with the contract;

 

13.2.3The guarantor do not substantially comply with or carry out any commitment
or obligation under the items of the guarantee files; or any representation or
warranty made by the guarantor under the items of the guarantee files is
incorrect, untrue, misleading, violated; or the representation or warranty has
been proved to be incorrect, untrue, misleading, and violated when they are made
or considered to be made.

 

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13.3Cross default

The guarantor who appears the below or any kind of situation in the agreement of
13.1 or 13.2in this contract shall be regarded as the borrower’s default of this
contract, and the lender has the right to call in the loan ahead of the
contract’s schedule and require the borrower to take the defaulting
responsibilities:

 

13.3.1Any loan, financing or debt has defaults;

 

13.3.2Any guarantee or similar obligation is not performed;

 

13.3.3Failing to perform or violate the relevant debt guarantees and other legal
documents or contracts having similar obligations;

 

13.3.4Appearances of the situations being unable to repay the expiring debtor
borrowing/financing;

 

13.3.5Bankrupt which has been declared or is about to be declared through the
legal procedure;

 

13.3.6Transferring the assets or property to other creditors;

 

13.3.7Other situations which endanger the safety of loan principal and interest
under this contract.

 

14Liabilities for default

 

14.1If one or several default items occur listed in article 13 of this contract,
the lender has the right to take one or more remedial measures according to the
actual situation of the borrower’ default. The borrower should bear the
corresponding responsibilities for default of the contract.

 

14.1.1If the borrower fails to fully repay any loan’s principal and interest or
the other payables in time under the items of this contract in accordance with
the stipulation of this contract; or fail to fully supply any additional gold
pledge and margin in time, or fail to timely buy insurance or extend insurance
time limit for any pledged gold; and fail to correct the defaulting behaviors
and remedy according to the requirements of the lender within the time limit
specified by the lender, the lender shall have the right to declare all trust
loans under the items of this contract expire in advance immediately, and
withdraw all the trust loans’ principal balance and the unpaid part in all the
interest payable according to the calculation stipulated by this contract,
overdue interest, penalty interest, liquidated damages and any other payables in
advance from the lender, and the immediate recourse to the borrower through
various forms.

 

14.1.2If the borrower violates the provisions of this contract without the
consent of the lender, and arbitrarily use or transfer the loan funds of special
accounts, the lender shall have the right to take back all or part of the loan
ahead of schedule. At the same time, from the date of arbitrarily use (transfer)
of the loan, according to the amount of the use (transfer) and actual days of
the use (transfer), the lender shall calculate and collect the penalty interest
from the borrower in the light of the thousandth of the use (transfer) fund
every day, until the borrower returns all the use (transfer) funds to the
lender. The lender’s collecting penalty interest from the borrower shall not
influence the lender’s any other rights under the items of this contract.

 

14.1.3During the period of the trust loan, if the Borrower fail to pay interest
within the time limit prescribed in this contract, as to the overdue interest
part, during the overdue period, the Lender shall have the right to add one
thousandth penalty interest every day on the basis of the original overdue loan
interest stipulated in article 6.4 from the overdue date.

 

14.1.4If the Borrower fails to repay the trust loan principal according to the
stipulation of this contract, as for the overdue part of the trust loan
principal, during the overdue period, the Lender shall have the right to add one
thousandth penalty interest every day on the basis of the original overdue loan
interest stipulated in article 6.4 from the overdue date.

 

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14.1.5According to the provisions of this contract or guaranteed documents, it
requests the Guarantor to bear guaranteed responsibilities, including the ways
of selling off and auctioning the pledged gold, the borrower’ agreement on the
discount of the pledged gold, or entrust the members in Shanghai Gold Exchange
to sell the pledged gold at the market price in the open gold market to perform
the right of pledge, or requests the Guarantor to bear the joint guaranteed
responsibilities.

 

14.1.6Other remedial measures stipulated by the relevant laws and regulations
and this contract.

 

14.2After the Lender took the default measures stipulated by the preceding
articles, the Borrower still cannot make up for the loss to the Lender, and they
have the right to continue to pursue of recovery to the Borrower about the
failing repay part.

 

14.3Because of any party’s default making the opposite party adopt the litigated
ways to realize the creditors’ rights, the default party should bear the
reasonable costs paid by the opposite party, including but not limited to legal
fares, property preservation fee, auction fee, attorney fees, travel expense,
copying charge, and printed materials fees, etc.

 

15Special stipulations

 

15.1When the news media, such as the documents, newspapers or web sites
sponsored by the state council and its ministries and commissions, provincial
government (including the municipalities directly under the central government
and autonomous regions), the people's bank of China, China banking regulatory
commission and other financial regulatory institutions ,report the industrial
policies of the state’s prohibition or restriction on the investment of the
related industries or series of enterprises, the lender could suspend,
discontinue, and terminate the debts’ issue or recover the loan ahead of
schedule to the borrower of the related industries or series of enterprises.

 

15.2The borrower agrees that the lender could use and save credit information
because of the loan application and post-loan management query.

 

15.3The reasons, such as the irresistible forces, stoppages of the
communications or network, or system faults of the lender, lead to the failures
to issue loans or conduct the payments in accordance with the stipulations of
this contract, the Lender shall not take the responsibility, but should promptly
notify the borrower to take remedial measures.

 

16Supplement, Modification and Transfer of the contract

 

16.1After the contract entries into force, the parties can modify or supplement
the contents of the contract on the basis of consensus. If the provisions of the
contract are inconsistent with the regulations of the law, a supplementary
contract should be timely consulted and signed to perfect the contract. For
matters not covered in this contract, both parties can sign a supplementary
contract. The supplementary contract is an integral part of this contract, and
it has the same legal effect as the contract. If the supplementary contract is
in conflict with the contract, the supplementary contract shall prevail. In this
contract, when this contract is mentioned, any effective revisions and
supplements to this contract should be included.

 

16.2Without the written consent of the Lender, the borrower may not transfer any
rights and obligations under this contract.

 

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17Notices

 

17.1unless there are other provisions in the contract, otherwise, all notices
between the two parties under the terms of the contract shall be in written
form, which can be delivered by people, registered letters, express mail
service, and fax can be as an auxiliary way, however, it must have a
supplementary delivery according to the agreed ways in the contract. The notices
on the following dates shall be deemed to be the dates of service:

 

(1) The notices delivered by people are an effective delivery on the delivery
date.

 

(2) The notices delivered by registered letter (postage paid) are effective
delivery on the seventh day after they are delivered (as indicated by the
postmark).

 

(3) The notices issued by express mail service (postage paid) are effective
delivery in the third days after being delivered (as indicated by the postmark).

 

(4) The notices sent by fax are effective after they are delivered.

 

(5) Using the above methods to send notices at the same time, the fastest one
reaches the receiver is effective.

 

17.2The notices under this contract shall be delivered according to the
following address; if some changes need to be done, the party who wants to
change shall notify the other party in written way and three working days in
advance. The losses caused by the failure to notice in time are bore by the
party who changes the correspondence address or the contact ways.

 

Lender: Anxin Trust Co., Ltd. Correspondence address: the 2nd Floor, No. 689.
Guangdong Road, Shanghai City. Postcode: 200001 Telephone numbers: 021-63410777
Fax: 021-63410309 Recipient: Lian Bo Borrower: Wuhan Kingold Jewelry Co., Ltd.
Correspondence address: Special No. 15 of Huangpu Science and Technology Park,
Jiang’an District, Wuhan City Postcode: 200001 Tel:   Fax: 027-65694777
Recipient: Hu Qiao

 

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18Grace and Partial invalidity

 

18.1The lender does not or delay exercising any rights under this contract shall
not be deemed to give up such rights, who exercises such rights alone or in part
should not be rid of using any other way or exercising such rights further or
other rights.

 

18.2The rights and remedies stipulated in the contract are cumulative and any
rights or remedies of the lender endowed by laws do not being ruled out.

 

18.3A provision or some portions of one provision in this contract are now or in
the future will become invalid, the invalid provision or the invalid portions do
not affect the validity of the contract, the other terms of the contract and
other contents of the provision.

 

19Other matters

 

19.1.This contract is effective after the legal representatives or authorized
representatives of both parties signed or sealed and stamped with official seal
and special seal for contractual use, and it terminates until trust loan
principal, interest, penalty interest, liquidated damages and all the other
obligations of payment have been fulfilled.

 

19.2If both parties produce differences to the provisions of this contract and
that has come to the “significant”, “substantial”, “serious” standards and so
on, the lender's interpretation shall prevail.

 

19.3When disputes arise during the performance of this contract, and they can be
resolved through consultation, if it doesn’t work, either party shall file a
lawsuit to the people's court having jurisdiction over the place where the
lender has his domicile. During the proceeding, the terms that do not involve
the dispute in the contract shall still be fulfilled.

 

19.4The contracts, memos, commitments and other binding legal documents which
have come into force signed by the borrower or Lender on the matters under this
contract shall be an integral part of this contract.

 

19.5Once the contract has been signed, it shows that the two parties have read
this contract in full and detail, do not have any doubt and ambiguity on all
terms in the contract, and have accurate and correct understanding on relevant
rights, obligations and responsibilities of both parties.

 

19.6Six copies of this contract, two copies of the lender, one copy of the
borrower, and the rest are used for conducting notarization and other
procedures, and each one has the same legal effect. 5 working days from the date
of signing this contract, and the contract shall be notarized by the two parties
to the notary organ designated by the lender.

 

19.7Loan application form, IOU, and other relevant documents and data provided
by the borrower are integral parts of this contract.

 

(The remainder of this page is intentionally left blank.)

 

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Attachment 1:

Receipt for Loan

Day    Month    Year

 

Loan Contract No.: AXXT [2016]JHXT01-DK01 No.: AXXT[2016]JHXT01-DK01-JJ01

 

Name of Lender : Anxin Trust Co., Ltd. Name of Borrower Unit: Wuhan Kingold
Jewelry Co., Ltd.

Special Account for Loan: Wuhan Kingold Jewelry Co., Ltd.

Opening Bank:

Account No.:

Loan Amounts: Loan Term: Value Date: ___Day___Month,___Year Loan Rate:

 

Borrower Unit (Official Seal): Legal Representative (Signature and Seal):

 

 

 

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(No text in this page, signing page of No. AXXT [2016]JHXT01-DK01 Trust Loan
Contract)

 

When signing this Contract, both parties have read and knew all the articles in
this Contract, have no objection, and accurately understood all legal
implications of all articles related to legal relations, related rights,
obligations and responsibilities between both parties.

 

Lender: Anxin Trust Co., Ltd. (Official Seal)

 

Legal Representative or Authorized Representative (Signature or Seal)

 

Borrower: Wuhan Kingold Jewelry Co., Ltd. (Official Seal)

 

Legal Representative or Authorized Representative (Signature or Seal)

 

Signing Date: _____  Day _____  Month, 2016

 

Signing Place: Shanghai

 

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