Unassociated Document


    EXHIBIT
10.4

    


    


    BAYTREE
CAPITAL

    


    


    April 7,
2010

    


    
      	
              Mr.
      Jia Zhihong

            


    

    
      	
              Chairman
      & CEO

            


    

    
      	
              Kingold
      Jewelry, Inc.

            


    

    
      	
              No.
      15 Huangpu Science and Technology
Park

            


    

    
      	
              Jiangan
      District, Wuhan, Hubei Province,
430023

            


    

    
      	
              China

            


    

    


    Dear
Chairman Jia,

    


    This letter serves to confirm the
agreement entered into between us whereby Kingold Jewelry, Inc., a Delaware
company, (“Kingold” or the “Company”) retains Baytree Capital Associates LLC, a
Delaware LLC, (the “Consultant”) as the Company’s exclusive financial advisor
(with the exception of the Company’s relationship with Rodman & Renshaw, LLC
or such other party as we may from time to time exclude) for a period of
eighteen (18) months to perform business and financial consulting services for
the Company.  As part of its duties, the Consultant shall, on written
request of the Company, provide advice and guidance in the following
areas:

    


    1.           Assist
the Company in long-term financial planning, and expansion;

    


    2.           Review
and assist in the preparation of budgets and financial forecasts prepared by
employees of the Company;

    


    3.           Review
internal and other financial statements prepared by employees or consultants of
the Company;

    


    4.           Assist
management and its counsel in negotiating any proposed equity or debt financing,
whether such financing involves conventional institutional loans or public or
private offerings of securities;

    


    5.           Assist
management and others in the preparation of presentations;

     

     

     

      
        

      

    

    
       

      Baytree
Capital Associates, LLC

      The Trump
Building

      40 Wall
Street, 58th
Floor

      New York,
NY 10005

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Kingold
jewelry, Inc.

          April 7,
2010

          Page
2

        

      

    

    
 

    6.           Work
with the Company's counsel and auditors in conjunction with the preparation of
any documentation referred to above or any financing negotiations and
preparation referred to above;

    


    7.           Provide
advice to the Company's management concerning proposed agreements;

    


    8.           If
requested by the Company, communicate, correspond and negotiate on behalf of the
Company with regard to the potential acquisition or sale of other businesses and
entities; and

     

    9.           If
requested, evaluate the financial condition and review the financial information
supplied relating to the business' entities referred to in Section 8
above.

    


    In addition, as part of its duties, the
Consultant shall have the authority to bind the Company in regard to the
following:

    


    1.           Although
we do not engage in the practice of investor relations or public relations, we
will act as your agent and interface with the Company’s investor and public
relations firms with regard to communications and presenting the Company to the
investment community;

    


    2.           Although
we do not engage in the practice of law, the Consultant will provide advice to
the Company with respect to its proposed filings with the Securities and
Exchange Commission; and

    


    3.    Although we are not
an underwriter we will negotiate the terms of any underwriting agreement to
which the Company is a party on behalf of the Company.

    


    Notwithstanding the foregoing, the
Consultant’s Managing Member, Michael Gardner, shall not be obligated to attend
any meetings outside of its offices or prepare any written reports, documents or
responses.  All services shall be performed by the Consultant from the
office in New York.

    


    The Company agrees to pay the
Consultant 100,000 shares of newly issued common stock each six month period
following in return for its services hereunder. The Company shall pay for any
expenses incurred by the Consultant pursuant to this Agreement, except that any
expenses over $2,500 shall be approved by the Company in advance.

    


    The Company may not terminate this
Agreement for eighteen (18)  months except if the Consultant willfully
refuses to perform services required by this Agreement and the Company has first
given the Consultant 60 days’ written notice of such willful refusal and in
connection with such notice, supplies the Consultant with detailed documentation
concerning this willful refusal.  In the event that after receipt of
such notice, the Consultant willfully fails to perform reasonable services
requested, this Agreement shall expire at the expiration of such 60-day period.
Notwithstanding any termination, the Consultant shall not be required to refund
any shares delivered to it or fees paid to it.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
          Kingold
jewelry, Inc.

          April 7,
2010

          Page
3

        

      

    

    
 

    Any controversy, dispute or claim
arising out of or relating to this agreement, or its interpretation,
application, implementation, breach or enforcement which the parties are unable
to resolve by mutual agreement, shall be settled by submission by either party
of the controversy, claim or dispute to binding arbitra­tion in New York,
N.Y., (unless the parties agree in writing to a different location) before a
single arbitrator in accordance with the rules of the American Arbitration
Association then in effect.  In any such arbitration proceeding the
parties agree to provide all discovery deemed necessary by the
arbitrator.  The decision and award made by the arbitrator shall be
final, binding and conclusive on all parties hereto for all purposes, and
judgment may be entered thereon in any court having jurisdiction
thereof.

    


    This Agreement and any dispute,
disagreement, or issue of construction or interpretation arising hereunder
whether relating to its execution, its validity, the obligations provided
therein or performance shall be governed or interpreted according to the laws of
the State of New York.

    


    If the foregoing is acceptable to you,
please execute a copy and return it to me.

     

    
      
        	 	 	 
	 	 	Very
      truly yours,	 
	 	 	 	 
	
                 

              	
                 

              	/s/ 
      Michael Gardner	 
	 	 	 	 
	 	 	Michael
      Gardner, Managing Member	 


      

    

    


    We hereby
agree to the contents of the foregoing letter agreement.

     

    
      
        	 	KINGOLD
      GROUP	 
	 	 	 	 
	
                Date:  April
      7, 2010  

              	
                By:
      

              	/s/ Jia
      Zhihong	 
	 	Jia
      Zhihong, Chairman	 


      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    ANNEX A

    


    
      	
              Kingold
      Jewelry, Inc.

            


    

    
      	
              No.
      15 Huangpu Science and Technology
Park

            


    

    
      	
              Jiangan
      District, Wuhan, Hubei Province,
430023

            


    

    
      	
              China

            


    

     

     

    April 7,
2010

    


    Baytree
Capital Associates, LLC

    40 Wall
Street, 58th
Floor

    New York,
NY 10005

    


     Gentlemen:

     

               
In connection with the engagement of Baytree Capital Associates, LLC (“Baytree”)
to advise and assist the undersigned (together with its affiliates and
subsidiaries, referred to as the “Company”) with the matters set forth in the
Agreement, dated April 7, 2010 between the Company and Baytree (the
“Agreement”), in the event that Baytree becomes involved in any capacity in any
claim, suit, action, proceeding, investigation or inquiry (including, without
limitation, any shareholder or derivative action or arbitration proceeding)
(collectively, a “Proceeding”) in connection with any matter in any way relating
to or referred to in the Agreement or arising out of the matters contemplated by
the Agreement, including, without limitation, related services and activities
prior to the date of the Agreement, the Company agrees to indemnify, defend and
hold Baytree harmless to the fullest extent permitted by law, from and against
any losses, claims, damages, liabilities and expenses in connection with any
matter in any way relating to or referred to in the Agreement or arising out of
the matters contemplated by the Agreement, including, without limitation,
related services and activities prior to the date of the Agreement, except to
the extent that it shall be determined by a court of competent jurisdiction in a
judgment that has become final in that it is no longer subject to appeal or
other review that such losses, claims, damages, liabilities and expenses
resulted solely from the gross negligence or willful misconduct of Baytree.
 In
addition, in the event that Baytree becomes involved in any capacity in any
Proceeding in connection with any matter in any way relating to or referred to
in the Agreement or arising out of the matters contemplated by the Agreement,
the Company will reimburse Baytree for its legal and other expenses (including
the cost of any investigation and preparation) as such expenses are incurred by
Baytree in connection therewith.  If such indemnification were not to be
available for any reason, the Company agrees to contribute to the losses,
claims, damages, liabilities and expenses involved (i) in the proportion
appropriate to reflect the relative benefits received or sought to be received
by the Company and its stockholders and affiliates and other constituencies, on
the one hand, and Baytree, on the other hand, in connection with the matters
contemplated by the Agreement or (ii) if (but only if and to the extent) the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and its
stockholders and affiliates and other constituencies, on the one hand, and the
party entitled to contribution, on the other hand, as well as any other relevant
equitable considerations.  The Company agrees that for the purposes of this
paragraph the relative benefits received, or sought to be received, by the
Company and its stockholders and affiliates and other constituencies, on the one
hand, and the party entitled to contribution, on the other hand, in connection
with the matters contemplated by the Agreement shall be deemed to be in the same
proportion that the total value received or paid or contemplated to be received
or paid by the Company or its stockholders or affiliates and other
constituencies, as the case may be, as a result of or in connection with the
matters (whether or not consummated) for which Baytree has been retained to
perform financial services bears to the fees paid to Baytree under the
Agreement; provided, that in no
event shall the Company contribute less than the amount necessary to assure that
Baytree is not liable for losses, claims, damages, liabilities and expenses in
excess of the amount of fees actually received by Baytree pursuant to the
Agreement.  Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission or any other alleged
conduct relates to information provided by the Company or other conduct by the
Company (or its employees or other agents), on the one hand, or by Baytree, on
the other hand.  The Company will not settle any Proceeding in respect of
which indemnity may be sought hereunder, whether or not Baytree is an actual or
potential party to such Proceeding, without Baytree’s prior written consent if
any admission of wrong-doing, negligence or improper activity of any kind of
Baytree is a part of such settlement.  Baytree shall not settle any
action or proceeding which settlement requires the Company (or any insurance
company providing coverage to the Company) to pay any sums of money or property
(including issuing any securities) without the express written consent of the
Company.  For purposes of this Indemnification Agreement, Baytree shall
include Baytree Capital Associates, LLC, any of its affiliates, each other
person, if any, controlling Baytree or any of its affiliates, their respective
officers, current and former directors, employees and agents, and the successors
and assigns of all of the foregoing persons.  The foregoing indemnity and
contribution agreement shall be in addition to any rights that any indemnified
party may have at common law or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
Company agrees that neither Baytree nor any of its affiliates, officers,
directors, agents, employees or controlling persons shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either Baytree’s engagement under
the Agreement or any matter referred to in the Agreement, including, without
limitation, related services and activities prior to the date of the Agreement,
except to the extent that it shall be determined by a court of competent
jurisdiction in a judgment that has become final in that it is no longer subject
to appeal or other review that any losses, claims, damages, liabilities or
expenses incurred by the Company resulted solely from the gross negligence or
willful misconduct of Baytree in performing the services that are the subject of
the Agreement.

     

               
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF ANY
KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT (“CLAIM”), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EXCEPT AS SET FORTH
BELOW, NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER
THAN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF
SUCH MATTERS, AND THE COMPANY AND BAYTREE CONSENT TO THE JURISDICTION OF SUCH
COURTS AND PERSONAL SERVICE WITH RESPECT THERETO.  THE COMPANY HEREBY
CONSENTS TO PERSONAL JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY
CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY
THIRD PARTY AGAINST BAYTREE OR ANY INDEMNIFIED PARTY.  THE COMPANY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT.  THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY PROCEEDING OR
CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND MAY BE ENFORCED
IN ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE
SUBJECT, BY SUIT UPON SUCH JUDGMENT.

    
      
        	 	 	 
	 	 	Very
      truly yours,	 
	 	 	 	 
	
                 

              	
                 

              	/s/ Jia
      Zhihong	 
	 	 	 	 
	 	 	Jia
      Zhihong, Chairman & CEO	 


      

    

     

    
      
        
        

      

      
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    KINGOLD
JEWELRY, INC.

    


    


    


    September
2,, 2009

    


    Mr.
Michael Gardner

    Managing
Member

    Baytree
Capital Associates, LLC

    40 Wall
Street, 58th Floor,  New York, NY  10005

    


    Dear Mr.
Gardner:

     

    Reference
is made to your letter of April 7, 2010 (the “Consulting Agreement”), between
Kingold Jewelry, Inc. (the “Company”) and Baytree Capital Associates, LLC (the
“Consultant”), a copy of which is attached hereto. The purpose of this letter is
to supplement and clarify the understanding of the parties with regard to a
particular provision of the Consulting Agreement in light of the reverse stock
split undertaken by Company subsequent to the date to the Consulting
Agreement.

     

    Reference
is specifically made to that paragraph of the Consulting Agreement which
states:

     

    “The
Company agrees to pay the Consultant 100,000 shares of newly issued common stock
each six months period following in return for its services hereunder. The
Company shall pay for any expenses incurred by the Consultant pursuant to this
Agreement, except that any expenses over $2,500 shall be approved by the Company
in advance.”

     

    Pursuant
to our subsequent meeting and discussions in your offices on Thursday, August
19, 2010, by way of clarification and supplementation of the Consulting
Agreement, the Company has agreed, and by the letter does agree, to issue
100,000 post-reverse
shares of newly issued common stock each six month period following in return
for services rendered under the Consulting Agreement.

     

    We look
forward to continuing to work with you to accomplish the objectives described in
numbered paragraphs 1 through 9 of the Consulting Agreement.

     

    Thank
you.

     

    Very
truly yours,

     

    /s/ Jia
Zhihong

     

    Zhihong
Jia

     

    Chairman
& CEO, Kingold Jewelry, Inc.

     

    
      
        
        

      

      
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