Document:

EXHIBIT
10.5

    

    MAKE
GOOD ESCROW AGREEMENT

    

    This Make
Good Escrow Agreement, dated as of December 23, 2009 (the “Agreement”), is
entered into by and among ActiveWorlds Corp., a U.S. public reporting company
(the “Company”), Famous Grow
Holdings Limited (the “Make
Good Pledgor”), the investors listed on the Schedule of Investors
attached hereto as Schedule
I and identified on the signature pages hereto (each, an “Investor” and collectively,
the “Investors”),
Baytree Capital Associates, LLC, a Delaware limited liability company, as
representative of the Investors (the “Investor Agent”), and Paul
Goodman, Esq., as escrow agent (“Escrow Agent”).

    

    WHEREAS,
each of the Investors has entered into a Securities Purchase Agreement, dated of
even date herewith (the “Securities Purchase
Agreement”), evidencing their participation in the Company’s private
placement (the “Offering”) of securities.
 As an inducement to the Investors to participate in the Offering and as
set forth in the Securities Purchase Agreement, the Make Good Pledgor has agreed
to place certain shares of common stock of the Company owned by it into escrow
(the “Escrow Shares”)
for the benefit of the Investors in the event that the Company fails to meet
certain financial thresholds as set forth in this Agreement.

     

    WHEREAS,
the Make Good Pledgor and the Investors have requested that the Escrow Agent
hold the Escrow Shares and the Escrow Agent has agreed to act as escrow agent
pursuant to the terms and conditions of this Agreement; and

     

    WHEREAS,
all capitalized terms used but not defined herein which are defined in the
Securities Purchase Agreement shall have the respective meanings given to such
terms in the Securities Purchase Agreement;

     

    NOW,
THEREFORE, in consideration of the mutual promises of the parties and the terms
and conditions hereof, the parties hereby agree as follows:

     

    1. Appointment of Escrow
Agent. The Make Good Pledgor hereby appoints the Escrow Agent to act as
Escrow Agent in accordance with the terms and conditions set forth in this
Agreement, and Escrow Agent hereby accepts such appointment and agrees to act as
Escrow Agent in accordance with such terms and conditions.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Establishment of Escrow.
 Upon the execution of this Agreement, the Make Good Pledgor shall deliver,
or cause to be delivered, to the Escrow Agent certificates evidencing an
aggregate of 3,791,218 shares of the Company’s common stock owned by the
Make Good Pledgor, together with stock powers executed in blank, signature
medallion guaranteed or in other form, and substance acceptable for transfer, to
be held in escrow pursuant to the terms and conditions of this Agreement.
 The Make Good Pledgor understands and agrees that the Investors’ right to
receive certain of the Escrow Shares (the “Make Good Shares”) pursuant to
this Agreement shall continue to run to the benefit of each Investor even if
such Investor shall have transferred or sold all or any portion of the shares of
Common Stock it acquired under the Securities Purchase Agreement (the “Purchased Shares”), and that each Investor
shall have the right to assign its rights to receive all or any such Make Good
Shares to other Persons in conjunction with negotiated sales or transfers of any
of its Purchased Shares.  The Make Good Pledgor hereby irrevocably agrees
that, other than in accordance with this Agreement, the Make Good Pledgor will
not offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
or announce the offering of any of the Escrow Shares (including any securities
convertible into, or exchangeable for, or representing the rights to receive
Make Good Shares).  The Escrow Agent shall notify the Investors when the
Escrow Shares have been deposited with the Escrow Agent.

    

    3. Representations of Make Good
Pledgor.  

    

    The Make
Good Pledgor hereby represents and warrants to the Investors as
follows:

     

    (i) The Make Good Pledgor is the record
and beneficial owner of the Escrow Shares and all of the Escrow Shares are
validly issued, fully paid and nonassessable shares of the Company, and free and
clear of all liens.  Upon any transfer of Make Good Shares to Investors
hereunder, Investors will receive full right, title and authority to the Escrow
Shares free and clear of all liens.

     

    (ii) Performance of this
Agreement and compliance with the provisions hereof will not violate any
provision of any applicable law and will not conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of any lien upon any of the
properties or assets of Make Good Pledgor pursuant to the terms of any
indenture, mortgage, deed of trust or other agreement or instrument binding upon
Make Good Pledgor or such properties or assets, other than such breaches,
defaults or liens which would not have a material adverse effect taken as a
whole.

    
      
         

      

      
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    4. Disbursement of Make Good
Shares.

     

    In the
event that the After PRC Tax Net Income (as defined below) for 2009 calculated
based upon the figure as reported in the Annual Report on Form 10-K of the
Company for the fiscal year ending December 31, 2009 (the “2009 Financial Statements”) as
filed with the Securities and Exchange Commission ( the “SEC”), is more than 70% of
amount equivalent to RMB 65 million (the “2009 Target Net Income”), the
Escrow Agent shall deliver to the Make Good Pledgor, one-third (1/3) of the
Escrow Shares being held by the Escrow Agent.  In the event that the After
Tax Net Income is less than 70% of the 2009 Target Net Income, then the Escrow
Agent shall deliver to the Investors, pursuant to the Investor Agent Written
Instructions (hereinafter defined), on a pro rata basis (determined by dividing
each Investor’s Investment Amount by the aggregate of all Investment Amounts
delivered to the Company by the Investors under the Securities Purchase
Agreement) as specified in Schedule I to this
Agreement, for no additional consideration, such number of Make Good Shares
equal to ((2009 Target Net Income / Actual net income for 2009) -1)
× 3,791,218, up to a maximum of the total number of Escrow Shares which
were originally delivered to the Escrow Agent pursuant to the terms
hereof.

    

    In the
event that the After Tax Net Income for 2010 calculated based upon the figures
as reported in the Annual Report of the Company for the fiscal year ending
December 31, 2010 (the “2010
Financial Statements”) as filed with the SEC, is more than 70% of 
RMB 100.0 million (the “2010
Target Net Income”), the Escrow Agent shall deliver to the Make Good
Pledgor, one-third (1/3) of the Escrow Shares then being held by the Escrow
Agent. In the event that the After Tax Net Income is less than 70% of the 2010
Target Net Income, then the Escrow Agent shall deliver to the Investors,
pursuant to the Investor Agent Written Instructions, on a pro rata basis (as
determined by the formula set forth above), for no additional consideration,
such number of Make Good Shares equal to ((2010 Target Net Income / Actual net
income for 2010) - 1) × 3,791,218, up to a maximum of the total number of
Escrow Shares remaining in the possession of the Escrow Agent pursuant to the
terms hereof.

    

    In the
event that the After PRC Tax Net Income for 2011 as calculated based upon the
figures reported in the Annual Report of the Company for the fiscal year ending
December 31, 2011 (the “2011
Financial Statements”), is more than RMB 150 million (the “2011 Target Net Income”), the
Escrow Agent shall deliver to the Make Good Pledgor any remaining Escrow Shares
then being held by the Escrow Agent. In the event that the After Tax Net Income
is less than 70% of the 2011 Target Net Income, then the Escrow Agent shall
deliver to the Investors, pursuant to the Investor Agent Written Instructions,
on a pro rata basis (as determined by the formula set forth above), for no
additional consideration, such number of Make Good Shares equal to ((2011 Target
Net Income / Actual net income for 2011) - 1) × 3,791,218, up to a maximum
of the total number of Make Good Shares remaining in the possession of the
Escrow Agent pursuant to the terms hereof, with the balance of the Escrow Shares
held by the Escrow Agent, if any, being delivered to the Make Good
Pledgor.

    

    Within
five (5) business days of Investor Agent’s receipt of the 2009 Financial
Statements, the 2010 Financial Statements and the 2011 Financial Statements, as
applicable, Investor Agent shall provide written instructions (the “Investor Agent Written
Instructions”) in the form attached hereto as Exhibit A to the Escrow
Agent instructing the Escrow Agent to issue and deliver the Make Good Shares, if
any, to the Investors in accordance with the calculation above.

    
      
         

      

      
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    The
Company will provide the Investor Agent with 2009 Financial Statements, the 2010
Financial Statements and the 2011 Financial Statements, as applicable, no later
than two (2) days after the date on which the respective Annual Reports with the
SEC to allow the Investor Agent the opportunity to evaluate whether the
applicable Target Net Income was achieved.

    

    After an
Annual Report on Form 10-K for fiscal 2011 of the Company is filed with the SEC
and the Make Good Shares issuable to Investors for fiscal year of 2011 have been
transferred to the Investors, any Escrow Shares remaining in escrow shall be
returned to the Make Good Pledgor within fifteen (15) Business Days of date of
such transfer.

    

    For
purposes hereof, “After PRC Tax
Net Income” shall mean the Company’s operating income after taxes
incurred in PRC for the fiscal year ending December 31, 2009, December 31, 2010
or December 31, 2011 (as applicable) in each case determined in accordance with
U.S. GAAP.

     

    No
fractional shares shall be delivered to the Purchasers under the calculations
set forth in this Section 4.  If, upon calculation of the Make Good Escrow
Shares to be delivered to the Investors pursuant to these calculations, an
Investor would be entitled to receive a fractional interest in a share, such
number of shares shall be rounded up or down to the nearest whole number of
shares of Common Stock to be delivered to such Investor.  In addition to
the Escrow Shares, upon receipt of written notice from the Investor Agent, the
Make Good Pledgor shall deposit such number of additional shares (the “Additional Escrow
Shares”), with the Escrow Agent in accordance with Section 1.2, solely to
cover any shares required to be delivered to the Investors in excess of the Make
Good Escrow Shares as a result of the rounding up of fractional shares under the
calculations set forth in this Section 4.

    

    5. Make Good Shares.
 

    

    If any
Make Good Shares are deliverable to the Investors in accordance with this
Agreement, Make Good Pledgor covenants and agrees to execute all such
instruments of transfer (including stock powers and assignment documents) as are
customarily executed to evidence and consummate the transfer of the Make Good
Shares from Make Good Pledgor to the Investors, to the extent not done so in
accordance with Section 2 until such time as (if at all) the Make Good Shares
are required to be delivered pursuant to the Securities Purchase Agreement and
in accordance with this Agreement.

    

    Any
dividends payable in respect of the Make Good Shares and all voting rights
applicable to the Make Good Shares shall be retained by Make Good Pledgor and
should the Escrow Agent receive dividends or voting materials, such items shall
not be held by the Escrow Agent, but shall be passed immediately on to the Make
Good Pledgor and shall not be invested or held for any time longer than is
needed to effectively re-route such items to the Make Good Pledgor.
 

    
      
         

      

      
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    Assuming
the Make Good Pledgor provides good and valid title to the Make Good Shares to
be transferred and delivered on behalf of the Make Good Pledgor to the Investors
hereunder, free and clear of all liens, encumbrances, equities or claims, the
Escrow Agent will ensure that upon delivery of the Make Good Shares, good and
valid title to the Make Good Shares, free and clear of all liens, encumbrances,
equities or claims will pass to the Investors.   The Escrow Agent shall not
take any action which could impair Investors’ rights in the Make Good Shares.
 The Escrow Agent shall not sell, transfer, assign or otherwise dispose of
(by operation of law or otherwise) or grant any option with respect to any Make
Good Shares prior to the termination of this Agreement.

     

    6. Interpleader.  Should
any controversy arise among the parties hereto with respect to this Agreement or
with respect to the right to receive the Escrow Shares, Escrow Agent and/or the
Investor Agent shall have the right to consult and hire counsel and/or to
institute an appropriate interpleader action to determine the rights of the
parties. Escrow Agent and/or the Investor Agent are also each hereby authorized
to institute an appropriate interpleader action upon receipt of a written letter
of direction executed by the parties so directing either Escrow Agent or the
Investor Agent. If Escrow Agent or the Investor Agent is directed to institute
an appropriate interpleader action, it shall institute such action not prior to
thirty (30) days after receipt of such letter of direction and not later than
sixty (60) days after such date. Any interpleader action instituted in
accordance with this Section 6 shall be filed in any court of competent
jurisdiction in the State of New York, and the Escrow Shares in dispute shall be
deposited with the court and in such event Escrow Agent and the Investor Agent
shall be relieved of and discharged from any and all obligations and liabilities
under and pursuant to this Agreement with respect to the Escrow Shares and any
other obligations hereunder.

     

    7. Exculpation and Indemnification of
Escrow Agent and the Investor Agent.

     

    a. 
Escrow Agent is not a party to, and is not bound by or charged with notice of
any agreement out of which this escrow may arise.  Escrow Agent acts under
this Agreement as a depositary only and is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity of
the subject matter of the escrow, or any part thereof, or for the form or
execution of any notice given by any other party hereunder, or for the identity
or authority of any person executing any such notice. Escrow Agent will have no
duties or responsibilities other than those expressly set forth herein. 
Escrow Agent will be under no liability to anyone by reason of any failure on
the part of any party hereto (other than Escrow Agent) or any maker, endorser or
other signatory of any document to perform such person's or entity's obligations
hereunder or under any such document.  Except for this Agreement and
instructions to Escrow Agent pursuant to the terms of this Agreement, Escrow
Agent will not be obligated to recognize any agreement between or among any or
all of the persons or entities referred to herein, notwithstanding its knowledge
thereof.  The Investor Agent’s sole obligation under this Agreement is to
provide written instruction to Escrow Agent (following such time as the Company
files certain periodic financial reports as specified in Section 4 hereof)
directing the distribution of the Escrow Shares.  The Investor Agent will
provide such written instructions upon review of the relevant After Tax Net
Income amount reported in such periodic financial reports as specified in
Section 4 hereof.  The Investor Agent is not charged with any obligation to
conduct any investigation into the financial reports or make any other
investigation related thereto.  In the event of any actual or alleged
mistake or fraud of the Company, its auditors or any other person in connection
with such financial reports of the Company, the Investor Agent shall have no
obligation or liability to any party hereunder.

    
      
         

      

      
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    b.  Neither the Escrow Agent nor
Investor Agent will be liable for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, absent gross negligence or willful
misconduct.  The Escrow Agent and Investor Agent may each rely conclusively
on, and will be protected in acting upon, any order, notice, demand,
certificate, or opinion or advice of counsel (including counsel chosen by Escrow
Agent or Investor Agent, as applicable), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is reasonably believed by Escrow Agent
or Investor Agent, as applicable, to be genuine and to be signed or presented by
the proper person or persons.  The duties and responsibilities of the
Escrow Agent and Investor Agent, as the case may be, hereunder shall be
determined solely by the express provisions of this Agreement and no other or
further duties or responsibilities shall be implied, including, but not limited
to, any obligation under or imposed by any laws of the State of New York upon
fiduciaries.  NEITHER THE ESCROW AGENT NOR INVESTOR AGENT SHALL BE LIABLE,
DIRECTLY OR INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF
THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH
HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S
OR INVESTOR AGENT'S, AS THE CASE MAY BE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
OR (II) SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF THE ESCROW
AGENT OR INVESTOR AGENT, AS APPLICABLE, HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

     

    c.  The Company and the Make
Good Pledgor hereby indemnify and hold harmless each of Escrow Agent, the
Investor Agent and any of their principals, partners, agents, employees and
affiliates from and
against any expenses, including reasonable attorneys' fees and disbursements,
damages or losses suffered by Escrow Agent or the Investor Agent in connection
with any claim or demand, which, in any way, directly or indirectly, arises out
of or relates to this Agreement or the services of Escrow Agent or the Investor
Agent hereunder; except, that if Escrow Agent or the Investor Agent is guilty of
willful misconduct or gross negligence under this Agreement, then Escrow Agent
or the Investor Agent, as the case may be, will bear all losses, damages and
expenses arising as a result of its own willful misconduct or gross
negligence.  Promptly after the receipt by Escrow Agent or the Investor
Agent of notice of any such demand or claim or the commencement of any action,
suit or proceeding relating to such demand or claim, Escrow Agent or the
Investor Agent, as the case may be, will notify the other parties hereto in
writing.  For the purposes hereof, the terms "expense" and "loss" will
include all amounts paid or payable to satisfy any such claim or demand, or in
settlement of any such claim, demand, action, suit or proceeding settled with
the express written consent of the parties hereto, and all costs and expenses,
including, but not limited to, reasonable attorneys' fees and disbursements,
paid or incurred in investigating or defending against any such claim, demand,
action, suit or proceeding.  The provisions of this Section 7 shall survive
the termination of this Agreement, and the resignation or removal of the Escrow
Agent.

    
      
         

      

      
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    8. Compensation of Escrow
Agent.  Escrow Agent shall be entitled to compensation for its
services as stated in the fee schedule attached hereto as Exhibit B, which
compensation shall be paid by the Company. The fee agreed upon for the services
rendered hereunder is intended as full compensation for Escrow Agent's services
as contemplated by this Agreement.

     

    9. Resignation of Escrow
Agent.  At any time, upon ten (10) business says' written notice to
the Company and the Investors, Escrow Agent may resign and be discharged from
its duties as Escrow Agent hereunder. As soon as practicable after its
resignation, Escrow Agent will promptly turn over to a successor escrow agent
appointed by the Company and the Investor Agent the Escrow Shares held hereunder
upon presentation of a document appointing the new escrow agent and evidencing
its acceptance thereof.  If, by the end of the ten business day period
following the giving of notice of resignation by Escrow Agent, the Company and
the Investor Agent shall have failed to appoint a successor escrow agent, Escrow
Agent shall deposit the Escrow Shares as directed by the Investor Agent with the
understanding that such Escrow Shares will continue to be subject to the
provisions of this Agreement.

    

    10. Records.  Escrow
Agent shall maintain accurate records of all transactions hereunder. 
Promptly after the termination of this Agreement or as may reasonably be
requested by the parties hereto from time to time before such termination,
Escrow Agent shall provide the parties hereto, as the case may be, with a
complete copy of such records, certified by Escrow Agent to be a complete and
accurate account of all such transactions.  The authorized representatives
of each of the parties hereto shall have access to such books and records at all
reasonable times during normal business hours upon reasonable notice to Escrow
Agent and at the requesting party’s expense.

     

    11. Notice.  All notices,
communications and instructions required or desired to be given under this
Agreement must be in writing and shall be deemed to be duly given if sent by
registered or certified mail, return receipt requested, or overnight courier, to
the addresses listed on the signature pages hereto.

     

    12. Execution in
Counterparts.  This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

    
      
         

      

      
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    13. Assignment and
Modification.  This Agreement and the rights and obligations
hereunder of the Escrow Agent may be assigned by the Escrow Agent only with the
prior consent of the Company and the Investor Agent.  This Agreement and
the rights and obligations hereunder of the Make Good Pledgor may not be
assigned by the Make Good Pledgor.  Subject to the requirements under
applicable laws, an Investor may assign its rights under this Agreement without
any consent from any other party. This Agreement may not be changed orally or
modified, amended or supplemented without an express written agreement executed
by the Escrow Agent, the Company, the Make Good Pledgor and the Investor Agent
(upon consent of the Investors holding a majority of the Shares issued at
Closing under the Securities Purchase Agreement. This Agreement is binding upon
and intended to be for the sole benefit of the parties hereto and their
respective successors, heirs and permitted assigns, and none of the provisions
of this Agreement are intended to be, nor shall they be construed to be, for the
benefit of any third person.  No portion of the Escrow Shares shall be
subject to interference or control by any creditor of any party hereto, or be
subject to being taken or reached by any legal or equitable process in
satisfaction of any debt or other liability of any such party hereto prior to
the disbursement thereof to such party hereto in accordance with the provisions
of this Agreement.

     

    14.  Applicable
Law.  This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York. The representations
and warranties contained in this Agreement shall survive the execution and
delivery hereof and any investigations made by any party. Each party agrees that
all legal proceedings concerning the interpretations, enforcement and defense of
the transactions contemplated by this Agreement shall be commenced exclusively
in the state and federal courts sitting in the City of New York, Borough of
Manhattan (the “New York
Courts”).  Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith, and hereby irrevocably waives, and
agrees not to assert in any such proceeding, any claim that it is not personally
subject to the jurisdiction of any such New York Court, or that such proceeding
has been commenced in an improper or inconvenient forum. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law.

     

    15. Headings.  The
headings contained in this Agreement are for convenience of reference only and
shall not affect the construction of this Agreement.

     

    16. Attorneys’ Fees.  If
any action at law or in equity, including an action for declaratory relief, is
brought to enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys’ fees from the other
party (unless such other party is the Escrow Agent), which fees may be set by
the court in the trial of such action or may be enforced in a separate action
brought for that purpose, and which fees shall be in addition to any other
relief that may be awarded.

    
      
         

      

      
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    17. Merger or
Consolidation.  Any corporation or association into which the Escrow
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer all or substantially all of its corporate trust
business and assets as a whole or substantially as a whole, or any corporation
or association resulting from any such conversion, sale, merger, consolidation
or transfer to which the Escrow Agent is a party, shall be and become the
successor escrow agent under this Agreement and shall have and succeed to the
rights, powers, duties, immunities and privileges as its predecessor, without
the execution or filing of any instrument or paper or the performance of any
further act.

    

    18.  Waiver. No waiver
of, or  any breach of any covenant or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof, or of any other
covenant or provision herein contained. No extension of time for performance of
any obligation or act shall be deemed an extension of the time for performance
of any other obligation or act.

    

    19. Entire Agreement. This
Agreement is the final expression of, and contains the entire agreement between,
the parties with respect to the subject matter hereof and supersedes all prior
understandings with respect thereto. This Agreement may not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be
waived, except by written instrument signed by the parties to be charged or by
its agent duly authorized in writing or as otherwise expressly permitted
herein.

     

    20. Construction. Whenever
required by the context of this Agreement, the singular shall include the plural
and masculine shall include the feminine. This Agreement shall not be construed
as if it had been prepared by one of the parties, but rather as if all parties
had prepared the same.

    

    21. Further Instruments. If
the Escrow Agent reasonably requires other or further instruments in connection
with this Agreement or obligations in respect hereto, the necessary parties
hereto shall use its best efforts to join in furnishing such
instruments.

     

    [SIGNATURE
PAGES FOLLOW]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
set forth below.

     

    
      
        
          
            
              
                
                  	 	
                          COMPANY:

                        
	 	 
      
	 	
                          ActiveWorlds
      Corp

                        
	 	 
      
	 	
                          By:/s/
      Paul Goodman

                        	 
      
	 	
                          Name:
      Paul Goodman

                        
	 	
                          Title:
      President

                        
	 	
                          Date:

                        
	 	 
      
	 	
                          Address:

                        
	 	
                          Facsimile:

                        
	 	
                          Attn.:

                        
	 	 
      
	 	
                          MAKE GOOD
      PLEDGOR:

                        
	 	 
      
	 	
                          Famous
      Grow Holdings Limited

                        
	 	 
      
	 	
                          By: 
      /s/ Qian Lei

                        	 
      
	 	
                          Name:
      Qian Lei

                        
	 	
                          Title:

                        
	 	
                          Date:

                        
	 	 
      
	 	
                          Address:

                        
	 	
                          Facsimile:

                        
	 	
                          Attn.:

                        

                

              

            

          

        

      

    

    
      
         

      

      
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                  ESCROW
      AGENT:

                
	 	 
      
	 	
                  By:

                	
                  /s/ Paul Goodman

                	 
      
	 	
                  Name:
      Paul Goodman

                
	 	
                  Title:

                
	 	
                  Date:

                
	 	 
      
	 	
                  Address:

                
	 	
                  Facsimile:

                
	 	
                  Attn.:

                
	 	 
      
	 	
                  INVESTOR
      AGENT

                
	 	 
      
	 	
                  Baytree
      Capital Associates, LLC

                
	 	
                  By:

                	
                  /s/ Michael Gardner

                	 
      
	 	
                  Name:
      Michael Gardner

                
	 	
                  Title:
      Managing Member

                
	 	
                  Date:

                
	 	 
      
	 	
                  Address:

                
	 	
                  Facsimile:

                
	 	
                  Attn.:

                
	 	 
      
	 	
                  INVESTORS

                
	 	 
      
	 	
                  By:

                	 
      	 
      
	 	
                  Name:

                
	 	
                  Title:

                
	 	
                  Date:

                
	 	 
      
	 	
                  Address:

                
	 	
                  Facsimile:

                
	 	
                  Attn.:

                

        

      

    

    
      
         

      

      
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                SCHEDULE
      I

                 

                LIST
      OF INVESTORS AND SHARES PURCHASED

                 

              
	
                Investor

              	
                Purchase
      Price

              	
                Shares

              	
                Warrants

              
	
                 

                Whitebox
      Combined Partners, LP

                C/O
      Whitebox Advisors, LLC

                3033
      Excelsir Blvd., Suite 3P

                Minneapolis,
      MN  55416

                EIN:  N/A
      (BVI entity)

              	
                 

                 

                 

                 

                 

                $1,680,000

              	
                 3,373,494

              	
                 674,699

              
	
                 

                Whitebox
      Intermarket Partners, LP

                C/O
      Whitebox Advisors, LLC

                3033
      Excelsir Blvd., Suite 3P

                Minneapolis,
      MN  55416

                EIN:  N/A
      (BVI entity)

              	
                $320,000

              	
                 642,570

              	
                 128,514

              
	
                 

                Wallington
      Investment Holding Ltd

                C/O
      Welch & Co.

                25500
      Hawthorne Blvd., Suite 2500

                Torrence,
      CA 90505

                EIN:  N/A

              	
                 

                 

                 

                 

                 

                $1,150,000

              	
                2,309,237

              	
                461,847

              
	
                 

                Parkland
      Ltd.

                Sinserstrasse
      65

                CH
      6330

                Cham,
      Switzerland

                EIN:  N/A
      (foreign entity)

              	
                 

                 

                 

                 

                 

                $500,000

              	
                1,004,016

              	
                 200,803

              
	
                 

                Jayhawk
      Private Equity Fund II, LP

                930
      Tahoe Blvd. 802-281

                Incline
      Village, NV  89451

                EIN:  26-1692972

              	
                 

                 

                 

                 

                $500,000

              	
                 1,004,016

              	
                 200,803

              
	
                 

                Trillion
      Growth China Limited Partnership

                1000,
      888-Third Street SW

                Calgary,
      AB  T2P5C5

                Canada

                EIN:  N/A
      (Canadian entity)

              	
                $250,000

              	
                 502,008

              	
                 100,402

              
	
                Great
      Places LLC

                C/O
      Baytree Capital

                40
      Wall Street, 58th
      Fl

                New
      York, NY 10005

                EIN:
      73-1552966

              	
                $250,000

              	
                 502,008

              	
                 100,402

              
	
                 

                 

                 

                Donald
      Rosenfeld

                11
      East 68th Street, Apt. 7G

                New
      York, NY 10065

                SS:
      ###-##-####

              	
                 

                 

                 

                 

                 

                 

                $75,000

              	
                 

                 

                 

                 

                 

                 

                150,602

              	
                 

                 

                 

                 

                 

                 

                30,120

              
	
                 

                Jay
      T.  Snyder

                C/O
      HJB Investments

                592
      Fifth Avenue, 4th
      Fl

                New
      York, NY 10036

                SS:
      ###-##-####

              	
                $50,000

              	
                 100,402

              	
                 20,080

              
	
                 

                Beryl
      Snyder

                592
      Fifth Avenue, 4th
      Fl

                New
      York, NY  10036

                SS:
      ###-##-####

              	
                $50,000

              	
                 100,402

              	
                 20,080

              
	
                 

                Randall
      Cox

                1314
      Sagamore, Lane

                Ventura,
      CA  93001

                SS:
      ###-##-####

              	
                $50,000

              	
                 100,402

              	
                 20,080

              
	
                 

                Silicon
      Prairie Partners

                130
      Lytham Ave.

                Palo
      Alto, CA  94301

                EIN:
      77-0570408

              	
                $50,000

              	
                 100,402

              	
                 20,080

              
	
                 

                Michael
      Harris, Esq.

                c/o
      Harris Cramer LLP

                1550
      Palm Beach Lakes Blvd.

                West
      Palm Beach, FL  33401

                SS:
      ###-##-####

              	
                $25,000

              	
                 50,201

              	
                 10,040

              
	
                 

                Bo
      Bai

                23/F
      Block B

                Cornwall
      Court, Kings Road

                North
      Point, Hong Kong

                SS:
      N/A (foreign national)

              	
                $150,000

              	
                301,206

              	
                60,240

              
	
                 

                Baytree
      Capital Associates, LLC

                and/or
      designees

                (consultant
      warrants)

              	
                -

              	
                -

              	
                3,072,289

              

      

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Exhibit A

    

    INSTRUCTION
NOTICE

    

    TO:
___________

    

    This
Instruction Notice is issued pursuant to that certain Make Good Escrow
Agreement
(the “Agreement”), dated
as of December ___, 2009, by and among ActiveWorlds Corp, a U.S. public
reporting company, Famous Grow Holdings Limited (the “Make Good Pledgor”), certain
investors listed on the Schedule of Investors attached to the Agreement as
Schedule I ( the “Investors”), Baytree Capital Associates, LLC, a Delaware
limited liability company, as representative of the Investors (the “Investor
Agent”), and you, as Escrow Agent. Capitalized terms used but not otherwise
defined in this Instruction Notice shall have the meanings ascribed to them in
the Agreement.

    

    The
undersigned hereby certifies that, pursuant to Section 4 of the Make Good Escrow
Agreement, it has a good faith belief that the Investors are entitled to receive
__________ shares of Make Good Shares as set forth in Exhibit A
hereto.

    

    Accordingly,
you are hereby instructed to transfer, upon your receipt of this Instruction
Notice, certain number of shares to the Investors as set forth in Exhibit
A

    

    A copy of
this Instruction Notice has been given to the Company and Investors in
accordance with the applicable provisions of the Make Good Escrow
Agreement.

    

    Dated:
_____________, 20__.

    

    
      
        
          	 
      	
                  Baytree
      Capital Associates, LLC

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Exhibit
B

    

    FEE
SCHEDULE

     

    $10,000

    
      
         

      

      
        14Unassociated Document

    EXHIBIT
10.6

     

    Exclusive
Management Consulting and Technical Support Agreement

     

    This
Exclusive Management Consulting and Technical Support Agreement (this “Agreement”) is entered into by
and between the following two parties in Wuhan China on June 30th,
2009:

     

    Party A:  Wuhan
Kingold Jewelry Co., Ltd, a corporation incorporated and validly existing in the
territory of the PRC pursuant to the law of the PRC with business license
registration number:  420100000023089 and legal registered office at
No. Te 15, Huangpu Science and Technology Park, Jiang’an District,
Wuhan.

     

    Party B:  Wuhan
Vogue-Show Jewelry Co., Ltd, a Wholly-Owned Foreign Enterprise (“WOFE”) registered in Wuhan of
the PRC, with business license registration number:  420100400013662
and legal registered office at 5th Floor I-3, No. Te 15, Economic Development
Zone, Jiang’an District, Wuhan.

     

    In this
Agreement, Party A and Party B collectively are referred to as “both parties”
and each of them is referred to as “a party”.

     

    Whereas:

     

    1.           Wuhan
Kingold Jewelry Co., Ltd (hereinafter referred to as “Party A” or “Kingold Jewelry”) is a
corporation duly and legally incorporated and existing in the territory of the
PRC pursuant to the law of the PRC, and mainly engages in the manufacture and
wholesale of gold jewelry.

     

    2.           Wuhan
Vogue-Show Jewelry Co., Ltd (“Party B”), a WOFE registered
and existing in Wuhan of the PRC, has advanced process and design conception,
unique manufacture and processing technology and smooth sales channels, is
advantageous in the international trend in the design conception of gold jewelry
and craftworks, and has an industry-leading management team with advanced
conception, scientific method and rich experience.

     

    3.           Party
A agrees to employ Party B to be its exclusive management consultant who will
provide exclusive technical support for Party A.

     

    4.           Party
B agrees to accept the entrustment of Party A and work as the exclusive
management consultant of Party A and provide Party A with exclusive technical
support.

     

    Now,
therefore, with the consensus reached through negotiation, both parties have
entered into this Agreement and agreed to abide by it pursuant to the applicable
laws and regulations of the PRC.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Clause
1              Exclusive
Management Consulting and Technical Support

     

    1.1         Exclusive
Management Consulting

     

    As of the
date of the execution of this Agreement, Party A shall irrevocably agree to
entrust Party B as its exclusive management consultant pursuant to the terms and
conditions of this Agreement, and Party B shall agree to accept the entrustment
of Party A to be the exclusive management consultant of Party A pursuant to the
terms and conditions of this Agreement.

     

    1.2         Exclusive
Technical Support

     

    As of the
date of the execution of this Agreement, Party B shall irrevocably agree to
provide Party A with exclusive technical support for the production and
operation of Party A pursuant to the terms and conditions of this Agreement, and
ensure that the technical support Party A receives will not be less than the
services for Party B itself and its any other affiliate.

     

    Clause
2              Representations
and Warranties

     

    2.1         Each
party respectively represents and warranties to the other party that, upon the
execution of this Agreement:

     

    2.1.1  it
has the right to execute this Agreement and the capability to perform the
same;

     

    2.1.2  it
has carried out necessary internal decision-making procedures, obtained proper
authority, acquire all the necessary consents and approvals of any requisite
third party and government authority to enter into and perform this Agreement
and this Agreement does not violate the laws and contracts binding or affecting
it;

     

    2.1.3  upon
the execution, this Agreement will constitute the legal, valid, binding
obligation of the other party and both parties will be subject to compulsory
enforcement pursuant to the terms and conditions of this Agreement.

     

    2.2         Party
A represents and warranties to Party B as follows that:

     

    2.2.1  Party
A and its business both have abided by all applicable national laws and
regulations in relation to environment protection;

     

    2.2.2  before
the execution of this Agreement, Party A’s assets and business did not involve
in or suffer any threats or sanctions of or in relation to material civil,
criminal or administrative claims, investigations, complaints or lawsuits
arising from or in relation to environment protection;

     

    2.2.3  before
the execution of this Agreement, Party A or its business (including assets, the
same below) did not have any criminal violations or any actions without duly
approval or any responsibility to be assumed arising from the violation of any
obligation (whether by law, by contract, or by other means), and did not have
any claims against Party A or its business due to the above-mentioned actions or
the violations to the above-mentioned obligations; and

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    2.2.4  before
the execution of this Agreement, there was not or would not be any
investigations or surveys of the business of Party A by government or other
authority.

     

    Clause
3              Service
Content

     

    3.1         Exclusive
Management Consulting

     

    3.1.1  Within
the Management Consulting Period (defined in Clause 10), Party B shall fully
manage the operation activities of Party A as its exclusive managing
consultant.  The detailed management services include but not limit
to:

     

    
      	
               
      

            	
              (a)

            	
              major
      decisions;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      decision in relation to the personnel recruitment, appointment and
      removal, dismissal, and remuneration of Party
A;

            

    

     

    
      	
               
      

            	
              (c)

            	
              fund
      management;

            

    

     

    
      	
               
      

            	
              (d)

            	
              financial
      management;

            

    

     

    
      	
               
      

            	
              (e)

            	
              assets
      management; and

            

    

     

    
      	
               
      

            	
              (f)

            	
              daily
      production and operation.

            

    

     

    3.1.2  As
of the day when this Agreement comes into effect, it is the obligation of Party
B to fully control and manage all internal operation activities of Party
A.

     

    3.1.3  For
Party B’s operation decision for the operation management of Party A, Party A
shall unconditionally provide necessary assistance.

     

    3.2         Exclusive
Technical Support

     

    As of the
day when this Agreement comes into effect, Party B shall permit Party A to use
its related technology in production and operation and obtain such technical
support including but not limited to technical consulting, training and
servicing, provided by Party B, and the service level shall not be below the
level of the similar technical service for Party B itself and its
affiliate.  If Party B or its affiliate has any improvement or
subsequent research and development on the above-mentioned technology, Party A,
pursuant to this Agreement, will automatically obtain the right to apply such
technology into its production and operation.

     

    Clause
4              Major
Decision Right Management

     

    4.1         Pursuant
to the Shareholders’ Voting Proxy Agreement entered into by Party B and some of
Party A’s shareholders on the same day as this Agreement (“Shareholders’ Voting Proxy
Agreement”), Party B shall have the right to participate in the
shareholder’s meeting of Party A, vote on the matters proposed at the meeting,
suggest the holding of temporary shareholders’ meeting as the agent of some
shareholders of Party A, and have other shareholders’ voting rights as
stipulated in the Articles of Association of Party A.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.2         Party
B shall have the right to designate the director and shareholder supervisor
candidates of Party A.

     

    4.3         Party
B shall also have the right to make the following major decisions:

     

    4.3.1  to
decide the operation plan and investment scheme for Party A;

     

    4.3.2  to
prepare the annual financial budget and settlement of Party A;

     

    4.3.3  to
prepare the profit distribution scheme and loss compensation scheme of Party
A;

     

    4.3.4  within
the authorization of the shareholder’s meeting, to decide such matters of Party
A as foreign investment, assets purchase and sale, assets mortgage, external
guarantee, assets management and related party transaction;

     

    4.3.5  to
decide the setup of the internal governance structure of Party A;

     

    4.3.6  to
employ or dismiss the senior officers of Party A and decide their remuneration
and other terms of employment;

     

    4.3.7  to
establish the basic management system and specific regulations of
Party A;

     

    4.3.8  to
prepare the amendment scheme for the Articles of Association of Party A;
and

     

    4.3.9  to
retain or replace the Certified Public Accounting (“CPA”) firm providing auditing
service for Party A.

     

    4.4         Party
B shall have the right to prepare the scheme to purchase or repurchase the
shares of Party A or merger, divide, dissolve and reorganize Party A, the scheme
to increase or decrease the registered capital, issue bonds or other securities
and go public for Party A; however, such schemes must obtain the consent of the
shareholders of Party A in advance.

     

    Clause
5              Human
Resource Management (“HR Management”)

     

    5.1         Party
B shall have the right to decide all matters in relation to HR of Party A
pursuant to the Company Law of the PRC and the Articles of Association of Party
A, including but not limited to the employment, removal, staffing and
remuneration of senior officers.

     

    5.2         Within
the Management Consulting Period, Party B shall enter into formal labor contract
with the personnel employed by Party A and transact such welfares as social
insurance and housing funds on behalf of Party A pursuant to the applicable laws
and regulations.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    5.3         For
all the existing employees of Party A, Party B undertakes to retain them and
keep their salary, insurance and welfare not below the level before Party B
takes over the business.

     

    Clause
6              Capital
Management

     

    Party B
shall manage and control all funds of Party A.  Party A shall open or
appoint a management account for its funds (“Management Account”) and Party
B shall be responsible for and have the right in deciding the inward and outward
remittance of its funds.  The seal affixed to such account shall be
that of the person appointed and confirmed by Party B.  As of the day
when this Agreement comes into effect, all cashes of Party A, including but not
limited to the existing working capitals, the incomes from the sale to customers
and inventories, raw materials and receivables (if any), all payables and
operating expenses, employees’ salaries and expenditures for assets acquisition,
and all operating incomes, must be saved and transacted in this Management
Account.

     

    Clause
7              Financial
Management

     

    7.1         Party
B shall establish the financial and accounting system of Party A pursuant to the
applicable laws and regulations of the PRC and the rules of the governmental
authority.

     

    7.2         Party
B shall submit annual budget and settlement scheme to the shareholders of Party
A.

     

    7.3         Party
B shall on a quarterly basis file financial statements to the shareholders of
Party A, and prepare the annual financial statements of Party A within one
hundred and twenty (120) days after the end of each financial year, and provide
them to the shareholders after they are audited by the CAP firm.

     

    Clause
8              Assets
Management

     

    8.1         Party
A shall deliver all its assets audited on December 31, 2008 (“Base Date”) to Party B (the
assets list attached hereunder as Exhibit A) and undertake it has no action
adversely affecting the above-mentioned assets after the Base Date and before
the execution of this Agreement.

     

    8.2         Within
the Management Consulting Period, Party B shall not transfer the assets of Party
A or reduce the same.

     

    8.3         Party
B shall undertake that, within the Management Consulting Period, the existing
assets of Party A are used only for the operation of the existing business, and
with its advanced management and by means of expanding production and operation
scale and financing, have the assets of Party A achieve the purpose of
maintaining and increasing value.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Clause
9              Production
and Operation Management

     

    9.1         Party
B shall have the right to decide all daily production and sales arrangements of
Party A such as the production scale, product category, sales strategy and
execution of operating contracts.

     

    9.2         Party
B undertakes to provide Party A with its existing and future developed advanced
processes and designs for gold jewelry and craftworks free of charge, as well as
free training.

     

    9.3         Party
B shall use advanced management and technology to further improve the quality of
Party A’s products and expand the production of Party A.

     

    9.4         Party
B undertakes to make full use of its existing sales channel and all these
methods such as market research, advertisement, propaganda and sales promotion
to broaden sales channels and increase sales volume.

     

    Clause
10            Period
of Management Consulting and Technical Support

     

    The
period of management consulting and technical support shall start as of the day
when this Agreement comes into effect and ends as at the earliest one of the
following dates:

     

    10.1       the
day when Party A’s operating period expires (“Management Consulting
Period”);

     

    10.2       the
day when the management consulting is terminated by both parties hereto through
negotiation; or

     

    10.3       the
day when Party B completes the acquisition of 95% of the equities or all the
assets of Party A.

     

    Clause
11            Fees
and Payment for Management Consulting and Technical Support

     

    In order
to fulfill the management consulting and technical support under this Agreement,
Party A shall pay on a monthly basis management consulting fees and technology
use and support fees in principle equal to 95% of all profits, if any, of that
month of Party A to Party B.  These fees that Party A shall pay to
Party B are paid in the following manner:  within the term of this
Agreement, after the costs and expenses are deducted for that month, 75% of all
incomes of Party A obtained that months are used to pay management consulting
fees and 20% of the same as technology use and support fees; if the incomes of
Party A that month are zero or negative after the costs and expenses and taxes
are deducted for that month, Party A will not pay Party B management consulting
fees and technology use and support fees, and the loss of that month shall be
deducted from the management consulting fees and technology use and support fees
of the following months.  Party A and Party B shall compute the
management consulting fees and technology use and support fees for the previous
month within fifteen (15) business days after the start of the next
month.  All payment to be made by Party A hereunder shall be made free
and clear of and without deduction for or on account of tax, unless Party A is
required to make such payment subject to the deduction or withholding of
tax.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Should
Party A fail to pay all or any part of the fees due to Party B under this Clause
within the time limits stipulated, Party B shall pay to Party A interest in RMB
on the amount overdue based on the three (3) month lending rate for RMB
announced by the Bank of China on the relevant due date.

     

    Clause
12            Rights
and Obligations of Party A

     

    12.1       On
the day when this Agreement comes into effect, Party A shall deliver all its
business data, personal archives, business licenses, official seals, financial
seals and other materials to Party B or representative authorized by Party
B.

     

    12.2       Without
the written consent of Party B, Party A shall not make any decisions for its
production and operation.

     

    12.3       Party
A shall assist Party B in the management consulting as per the request of Party
B.

     

    12.4       Party
A shall open or designate the Management Account within fifteen (15) days of
date hereof.

     

    12.5       Party
A shall actively assist Party B in broadening raw materials supply and sales
channels.

     

    12.6       Party
A shall assist Party B in purchasing and reconstructing equipments,
transportation tools, office supplies and communications tools within the
territory of the PRC.

     

    12.7       Party
A shall actively assist Party B in transacting foreign merger formalities
provided that doing so is permitted by the laws and regulations of the
PRC.

     

    12.8       Party
A shall not terminate this Agreement unilaterally.

     

    12.9       Party
A shall exercise the rights and perform the obligations under this
Agreement.

     

    12.10     Party
A shall permit and cause Party A’s shareholders to pledge the equity interests
of Party A to Party B for securing the management consulting fees and technology
use and support fees that should be paid by party A pursuant to this
Agreement.

     

    12.11     Party
A shall indemnify and hold harmless Party B from and against any loss, damage,
obligation and expenses arising out of any litigation, claim or other legal
procedure against Part A arising out of the performance of this
Agreement.

     

    12.12     Party
A will comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental authority, in respect of
the conduct of its business and the ownership of its property, including without
limitation, maintenance of valid and proper government approvals and licenses
necessary to provide the services, except that such non-compliances could not,
in the aggregate, have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of Party
A.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    12.13     Party
A will do or cause to be done, all things necessary to preserve and keep in full
force and effect its existence and its material rights, franchises and
licenses.

     

    12.14     Party
A shall designate the person recommended by Party B as the directors of Party A,
and Party A shall appoint Party B’s senior officers as Party A’s General
Manager, Chief Financial Officer, and other senior officers.  If any
of the above senior officers leaves or is dismissed by Party B, he or she will
lose the qualification to take any position in Party A and Party A shall appoint
other senior officers of Party B recommended by Party B to take such
position.  The person recommended by Party B in accordance with this
clause herein should comply with the stipulation on the qualifications of
directors, General Manager, Chief Financial Officer, and other senior officers
pursuant to applicable law.

     

    12.15     Information
Covenants.  Party A will furnish to Party B:

     

    12.15.1  Preliminary
Monthly Reports.  Within five (5) days after the end of each calendar
month the preliminary income statements, balance sheet and results of operations
of Party A made up to and as at the end of such calendar month, in each case
prepared in accordance with the PRC generally accepted accounting principles,
consistently applied.

     

    12.15.2  Final
Monthly Reports.  Within ten (10) days after the end of each calendar
month, a final report from Party A on the financial situation such as income
statements, balance sheet and results of operations of Party A made up to and as
at the end of such calendar month and for the elapsed portion of the relevant
financial year, setting forth in each case in comparative form figures for the
corresponding period in the preceding financial year, in each case prepared in
accordance with the PRC generally accepted accounting principles, consistently
applied.

     

    12.15.3  Quarterly
Reports.  As soon as available and, in any event, within thirty (30)
days after each Quarterly Date (as defined below), unaudited consolidated
balance sheet, consolidated statements of operations, statements of cash flows
and changes in financial situation of the Party A and its subsidiaries, if any,
for such quarterly period and for the period from the beginning of the relevant
fiscal year to such Quarterly Date, setting forth in each case actual versus
budgeted comparisons and in comparative form the corresponding consolidated
figures for the corresponding period in the preceding fiscal year, accompanied
by a certificate of the chief financial officer of the Party A, which
certificate shall state that said financial statements fairly present the
consolidated financial condition and results of operations, as the case may be,
of the Party A and its subsidiaries, if any, in accordance with U.S. general
accepted accounting principles applied on a consist basis as at the end of, and
for, such period (subject to normal year-end audit adjustments and the
preparation of notes for the audited financial statements).

     

    12.15.4  Annual
Audited Accounts.  Within six (6) weeks of the end of the financial
year, the annual audited accounts of Party A to which they relate (setting forth
in each case in comparative form the corresponding figures for the preceding
financial year), in each case prepared in accordance with, among others, the
U.S. generally accepted accounting principles, consistently
applied.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    12.15.5  Budgets.  At
least 90 days before the first day of each financial year of Party A, a budget
in form satisfactory to Party B (including budgeted statements of income and
sources and uses of cash and balance sheets) prepared by Party A for each of the
four financial quarters of such financial year accompanied by the statement of
the chief financial officer of Party A to the effect that, to the best of his
knowledge, the budget is a reasonable estimate for the period covered
thereby.

     

    12.15.6  Notice
of Litigation.  Promptly, and in any event within one (1) business day
after an officer of Party A obtains knowledge thereof, notice of (i) any
litigation or governmental proceeding pending against Party A which could
materially adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of Party A and (ii) any other
event which is likely to materially adversely affect the business, operations,
property, assets, condition (financial, or otherwise) or prospects of Party
A.

     

    12.15.7  Other
Information.  From time to time, such other information or documents
(financial or otherwise) as Party B may reasonably request.

     

    Clause
13            Negative
Covenants

     

    Party A
covenants and agrees that, during the term of this Agreement, without the prior
written consent of Party B,

     

    13.1       Party
A will not issue, purchase or redeem any equity or debt securities of
Party A.

     

    13.2       Party
A will not create, incur, assume or suffer to exist any liens upon or with
respect to any property or assets of Party A whether now owned or hereafter
acquired, provided that the provisions of this Clause 13.2 shall not prevent the
creation, incurrence, assumption or existence of:

     

    13.2.1  liens
for taxes not yet due, or liens for taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been established;
and

     

    13.2.2  liens
in respect of property or assets of Party A imposed by law, which were incurred
in the ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of Party A or (y) which
are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property of assets
subject to any such lien.

     

    13.3       Party
A will not wind up, liquidate or dissolve its operations or enter into any
transactions of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or any
part of its property or assets, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any person, except that (i) Party A may make
sales of inventory in the ordinary course of business and (ii) Party A may, in
the ordinary course of business, sell equipment which is uneconomic or
obsolete.

    
      
         

      

      
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    13.4       Parry
A will not declare or pay any dividends, or return any capital, to its
shareholders or authorize or make any other distribution, payment or deliver of
property or cash to its shareholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any options or
warrants issued by Party A with respect to its capital stock), or set aside any
funds for any of the foregoing purposes.

     

    13.5       Party
A will not contract, create, incur, assume or suffer to exist any indebtedness,
except accrued expenses and current trade accounts payable incurred in the
ordinary course of business, and obligations under trade letters of credit
inclined by Party A in the ordinary course of business, which are to be repaid
in full not longer than one (1) year after the date on which such indebtedness
is originally incurred to finance the purchase of goods by Party A.

     

    13.6       Party
A will not lend money or credit or make advances to any person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other person, except that Party A may
acquire and hold receivables owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms.

     

    13.7       Party
A will not enter into any transactions or series of related transactions,
whether or not in the ordinary course of business, with any affiliate of Party
A, other than on terms and conditions substantially as favorable to Party A as
would be obtainable by Party A at the time in a comparable arm’s-length
transaction with a person other than an affiliate and with the prior written
consent of Party B.

     

    13.8       Party
A will not make any expenditures for fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which should be capitalized
in accordance with generally accepted accounting principles in the PRC or in the
United States) in excess of US $1,000,000, without the prior written consent of
Party B.

     

    13.9       Party
A will not (i) make any voluntary or optional payment or prepayment on or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) any existing indebtedness or (ii) amend or
modify, or permit the amendment or modification of, any provision of any
existing indebtedness or of any agreement (including, without limitation, any
purchase agreement, indenture, loan agreement or security agreement) relating to
any of the foregoing or (iii) amend, modify or change its Article of Association
or Business License, or any agreement entered into by it, with respect to its
capital stock, or enter into any new agreement with respect to its capital
stock.

    
      
         

      

      
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    Clause
14            Rights
and Obligations of Party B

     

    14.1       Party
B shall have the independent and full operation management right over Party
A.

     

    14.2       Party
B shall have the right to dispose all the assets of party A, except otherwise
provided in this Agreement.

     

    14.3       Party
B shall have the right to collect management consulting fees.

     

    14.4       Party
B shall have the right to designate directors and shareholder supervisor of
Party A.

     

    14.5       According
to the resolution of the board of directors, Party B shall have the right to
appoint general manager, deputy general manager, financial officer of Party
A.

     

    14.6       Party
B shall have the right to convoke Party A’s shareholders’ meeting and adopt a
resolution at the shareholders’ meeting pursuant to the Shareholders’ Voting
Proxy Agreement.

     

    14.7       Party
B shall manage the fund accounts.

     

    14.8       Party
B shall manage all operation activities of Party A.

     

    14.9       If
Party A’s shareholders require, Party B shall inform them of the operation of
Party A in time and accept the reasonable suggestions from them.

     

    14.10     Party
B shall exercise the rights and perform the obligations under this
Agreement.

     

    Clause
15            Taxes
and Fees

     

    All taxes
and fees resulting from the execution and performance of this Agreement and in
the process of the operation with management consulting shall be borne by both
parties respectively pursuant to the applicable laws and
regulations.

     

    Clause
16            Intellectual
Property Right

     

    Party A
shall contribute all of its intellectual property rights to Party
B.

     

    Both
parties shall strictly keep confidential all patents, trademarks, data,
drawings, codes or other technical information including all intellectual
property right information that either party provides in writing or in any other
form pursuant to this Agreement.

     

    In
addition, the above-mentioned intellectual property right information either
party provides the other party shall not become the property of the other party,
shall be used only for the performance of its obligations under this Agreement
and shall not be copied for or disclosed to any third party or used wholly or
partially for any other purpose.  The provision of patents,
trademarks, data, drawings, codes or other technical information shall not be
interpreted as either party endows any title thereof to the other party
expressly or impliedly.

    
      
         

      

      
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    Party B
shall own all intellectual property rights developed or discovered through
research and development, in the course of providing services, or derived from
the provision of the services.  Such intellectual property rights
shall include patents, trademarks, trade names, copyrights, patent application
rights, copyright and trademark application rights, research and technical
documents and materials, and other related intellectual property rights
including the right to license or transfer such intellectual
properties.  If Party A must utilize any intellectual property, Party
B agrees to grant an appropriate license to Party A on terms and conditions to
be set forth in a separate agreement.

     

    Clause
17            Liability
for breach

     

    Both
parties shall sufficiently perform this Agreement.  Either party
breaking this Agreement shall bear the liability as arising therefrom and in
relation thereto.  If the breaking party causes damages to the other
party, the breaking party shall compensate the other party for all such
damages.

     

    Clause
18            Force
Majeure

     

    Force
majeure refers to all events that is out of the control of either party,
unforeseeable or foreseeable but inevitable and causes either party unable to
perform its obligations under this Agreement, including but not limited to
natural phenomena and natural disasters such as flood, fire, drought, typhoon,
rainstorm, tide, earthquake, explosion, epidemic, strike, tsunami, accident, war
or any other unforeseeable, inevitable or out-of-control circumstances,
including the circumstance that is deemed as force majeure in international
commercial practice.

     

    In case
of force majeure, the affected party shall inform the other party of such event
in writing within fourteen (14) business days after its
occurrence.  Where the occurring force majeure causes either party to
be unable to perform its obligations under this Agreement, the other party shall
have the right to send a written notice to such party to terminate this
Agreement and this Agreement will be terminated thirty (30) days after the
reception of the termination notice.

     

    Clause
19            Confidentiality

     

    19.1       All
materials, documents, communications and other information obtained in the
negotiation, execution or performance of this Agreement, whether commercial,
technical or in any other form (hereinafter referred to as “Confidential Information”),
shall be kept confidential and used only for the performance of the obligations
under this Agreement.  Unless otherwise the other party consents in
writing, neither party shall release, leak or disclose any Confidential
Information to any third party.

     

    19.2       Either
party can disclose the Confidential Information in the following
circumstances:  (1) where the law, court order or the competent court
with jurisdiction requires, and such disclosure can be conducted only within
such requirement; (2) where the competent authority or government department
requires; (3) where such Confidential Information has been known to the general
public; or (4) where such Confidential Information was owned duly and legally by
the disclosing party rather obtained from the other party before the disclosing
party obtains it. However, for the circumstances aforesaid, where either party
discloses the Confidential Information, it shall inform the other party of the
Confidential Information to be disclosed.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    19.3       Nonetheless
other provisions of this clause, either party shall have the right to disclose
the Confidential Information to its lawyer, accountant, other professional
consultants, directors or senior officers; however, such personnel shall
undertake in writing to treat such information as Confidential Information by
taking the measures similar to those stated in Paragraph 1 of this
clause.

     

    Clause
20            Governing
Law

     

    The
execution, validity, effect, interpretation, performance and dispute solution of
this Agreement shall be governed by the laws and regulations of the
PRC.

     

    Clause
21            Dispute
Resolution

     

    Both
parties agree that any dispute arising from or in relation to this Agreement
shall first be settled by the friendly negotiation of both
parties.  If the negotiation fails within 45 days, either party shall
have the right to file the dispute with China International Economic and Trade
Arbitration Commission (“CIETAC
“) in Beijing for arbitration pursuant to the currently effective
arbitration rules of CIETAC at the time of application.  This
arbitration shall be final and bind both parties and shall be enforceable in any
court of competent jurisdiction.  The arbitration fees shall be born
by the losing party.

     

    Clause
22            Party
B’s Remedy upon Party A’s Default

     

    In
addition to the remedies provided elsewhere under this Agreement, Party B shall
be entitled to remedies permitted under PRC laws, including without limitation
compensation for any direct and indirect losses arising from the breach and
legal fees incurred to recover losses from such breach.

     

    Clause
23            Effect
and Termination of this Agreement

     

    23.1       This
Agreement shall come into effect as of the day when the seals of both parties
are affixed to it and the authorized representatives of both parties sign on it,
and shall terminate on the day of the acquisition of 95% of equities or all the
assets of Party A.

     

    23.2       The
term of this Agreement may be extended by Party A in its sole discretion before
the termination or expiration of this Agreement.  The term of
extension shall be determined through mutual agreement by both parties to this
Agreement.

     

    23.3       Before
Party B’s acquisition of 95% of equities or assets of Party A, unless otherwise
agreed on through negotiation by both parties, neither party can terminate in
advance or amend this Agreement, except otherwise stipulated in this
Agreement

     

    23.4       The
rights and obligations of both Parties under Clause 12.11 regarding indemnity
and Clause 19 regarding confidentiality shall survive the termination of this
Agreement.

    
      
         

      

      
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    Clause
24            General
Terms

     

    24.1       Entire
Agreement

     

    This
Agreement is the basic agreement between the parties for entrusted
operation.  This Agreement and the Exhibits and Schedules hereto
contain the entire understanding between the parries, no other representations,
warranties or covenants having induced any party to execute this Agreement, and
supersede all prior or contemporaneous agreements with respect to the subject
matter hereof.  All exhibits, addendums, and schedules referred to in
this Agreement are incorporated herein by reference.  All references
to schedules and exhibits are to exhibits and schedules attached to and to
become a part of this Agreement unless otherwise indicated.

     

    24.2       Amendment

     

    Any
amendment and/or rescission shall be in writing and signed by the authorized
representatives of both parties.  Such revision shall be a valid
integral part of this Agreement.

     

    24.3       Headings

     

    The
headings of any Clauses or other portion of this Agreement are for convenience
only and are not to be considered in construing this Agreement.

     

    24.4       Construction

     

    References
in this Agreement to “Clauses,” “Sections” “Schedules” and “Exhibits” shall be
to the Clauses, Sections, Schedules and Exhibits of this Agreement, unless
otherwise specifically provided; any use in this Agreement of the singular or
plural, or the masculine, feminine or neuter gender, shall be deemed to include
the others, unless the context otherwise requires; the words “herein”, “hereof”
and “hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement; the word “including” when used in this Agreement shall mean
“including without limitation”; and except
as otherwise specified in this Agreement, all references in this Agreement (a)
to any agreement, document, certificate or other written instrument shall be a
reference to such agreement, document, certificate or instrument, in each case
together with all exhibits, schedules, attachment and appendices thereto, and as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof; and (b) to any law, statute or regulation
shall be deemed references to such law, statute or regulation as the same may be
supplemented, amended, consolidated, superseded or modified from time to
time.

     

    24.5       Transfer

     

    Without
the prior written consent of the other party, no party shall sub-contract,
license or transfer its rights and obligations under this Agreement to any third
party or its affiliate; and any transfer of this Agreement without approval
shall be invalid.  Each party shall determinate whether to approve a
transfer without unreasonable delay.

     

    
      
        
        

      

      
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    24.6       Severability

     

    Any
provision hereof that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     

    24.7       Waiver

     

    No
failure or delay of either party to enforce any right hereunder shall constitute
a waiver of any such right hereunder.  No waiver shall be effective
hereunder unless in writing and a waiver shall only be effective for the
specific act or circumstance for which it is given and not for any future act or
circumstance.

     

    24.8       Succession
of this Agreement

     

    This
Agreement shall bind the successors and transferees of both
parties.

     

    24.9       Language

     

    This
Agreement is in both Chinese and English and signed by both parties, and the two
versions have the same effect.  Should there be any discrepancy
between the two language versions, the Chinese version shall
prevail.

     

    24.10     Copies
of this Agreement

     

    This
Agreement shall be executed in two counterparts, each party holds
one.  Each of the copies shall be deemed as the original one and has
the same effect.

     

    24.11     Notices

     

    All
notices required or permitted under this Agreement shall be in writing and shall
be sufficiently given only if mailed by registered or certified mail, return
receipt requested, or sent by expedited or overnight delivery service with
return receipt, or sent by telecopier with confirmed receipt, to the party to
receive notice at the following addresses or at such other address as any party
may, upon ten (10) days prior notice, direct:

     

    If to
Party A:

     

    With a
copy to:  

    
      
         

      

      
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    If to
Party B:

     

    With a
copy to:  

     

    [The
remainder of this page is intentionally left blank.]

    
      
         

      

      
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    In witness hereof, both
parties have signed this Agreement on the date specified on the first page of
this Agreement

     

    Party
A:

     

    Wuhan
Kingold Jewelry Co., Ltd (seal)

     

    Authorized
Representative (signature):

     

     

    Party
B:

     

    Wuhan
Vogue-Show Jewelry Co., Ltd (seal)

     

    Authorized
Representative (signature):

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Exhibit
A

      

      
        	
                1.  

              	
                Gold
      Jewelry and Bars, etc.

              

      

      

      
        	
                2.  

              	
                Office
      Furniture, Furnishings and
Appliances

              

      

      

      
        	
                3.  

              	
                Other
      Assets

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