Form 8-K KINGOLD JEWELRY, INC. For: Feb 09

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 9, 2015

 

 

KINGOLD JEWELRY, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-15819		13-3883101
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

15 Huangpu Science and Technology Park Jiang’an District Wuhan, Hubei Province, PRC		430023
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (011) 86 27 65694977

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01

Entry into a Material Definitive Agreement.

 

On February 9, 2015, Wuhan Kingold Jewelry Co., Ltd. (“Wuhan Kingold”), the PRC-based operating subsidiary of Kingold Jewelry, Inc. (the “Company”), received a Notice of Acceptance of Registration (the “Acceptance”) from the PRC’s National Association of Financial Market Institutional Investors (the “NAFMII”), registering the issuance of up to RMB 750 million (approximately US$120 million) of debt financing instruments by Wuhan Kingold pursuant to a Non-Public Oriented Debt Financing Instruments Private Placement Agreement, by and among Wuhan Kingold, Shanghai Pudong Development Bank Co., Ltd (“Pufa Bank”) and the other institutional investors named therein (together with Pufa Bank, the “Investors”), dated July 21, 2014 (the “Private Placement Agreement”). Such Private Placement Agreement became valid upon the Acceptance. In connection with the Private Placement Agreement, Wuhan Kingold and Pufa Bank entered into an Underwriting Agreement dated August 12, 2014, appointing Pufa Bank as the lead underwriter and bookkeeping manager for the issuance of the debt securities.

 

The debt financing program is intended to operate similar to a commercial paper program. Under the program, Wuhan Kingold may issue the debt securities at any time within two years from the date of the Acceptance, with the initial issuance completed within six months from the date of the Acceptance. Wuhan Kingold is required to report any issuance to the NAFMII. The Private Placement Agreement provides that the Investors are entitled to, but are not required to, participate in any issuance, and prohibits using the proceeds from any issuance of debt securities for real estate and equity acquisition transactions. 

 

The total amount of the first phase issuance will be RMB 400 million (approximately US$64 million), and will be secured by certain gold or gold products held by Wuhan Kingold. The total amount of the second phase issuance will be RMB 350 million (approximately US$56 million), and will be secured by certain real property and construction in progress (including the Kingold Jewelry International Industry Park). In connection with the foregoing, Wuhan Kingold and Pufa Bank have entered into a Credit Agent Agreement (the “Credit Agent Agreement”), pursuant to which Pufa Bank serves as the agent of the holders of the debt securities. Mr. Zhihong Jia, Chairman and Chief Executive Officer of the Company has executed a guaranty, to guarantee Wuhan Kingold’s obligations under the Credit Agent Agreement.

 

The foregoing summary of the Private Placement Agreement and the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the text of such agreements, which are incorporated by reference herein. English translations of the Private Placement Agreement and the Underwriting Agreement are filed as Exhibits 10.1 and 10.2 hereto.

 

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in its entirety into this Item 2.03.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits

 

 

Exhibit No.		Description
10.1		Private Placement Agreement (English translation), dated July 21, 2014, between Wuhan Kingold Jewelry Co., Ltd., Shanghai Pudong Development Bank Co., Ltd and the other institutional investors named therein.
10.2		Underwriting Agreement (English translation), dated August 12, 2014, between Wuhan Kingold Jewelry Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	KINGOLD JEWELRY, INC.
	By:	/s/ Zhihong Jia
		Name: Zhihong Jia
		Title: Chief Executive Officer

 

Date: March 4, 2015

 

 

Exhibit 10.1

 

[Unofficial English Translation]

 

Wuhan Kingold Jewelry Co., Ltd

Authorized Distributor Agreement on 2014-2016 Non-Public

Oriented Debt Financing Tool

 

2015

 

 

Table of Contents

 

 

This agreement was made on July 21^st, 2014 by both parties:

 

I. Wuhan Kingold Jewelry CO., Ltd, as the distributor:

 

Legal representative: Jia Zhihong

 

Registered address: No. 15, Huangpu Science and Technology Park, Jiangan District, Wuhan

 

Business address: No. 15, Huangpu Science and Technology Park, Jiangan District, Wuhan

 

Contact: Hu Qiao

 

Contact information: 027-65694977

 

II. Organizations listed on the Agreement of List of Investors and Basic Information are regarded the oriented investors with the intention of purchasing oriented tool (hereinafter referred to as the “investor”).

 

The above-mentioned party shall be called as “a party” and “all parties” by combination in this agreement.

 

Whereas

 

1.

The distributor is a duly established and existing non-financial business entity. It plans to adopt non-public oriented issuance method (hereinafter referred to as “oriented issuance”) to issue debt financing tools (hereinafter referred to as “oriented tools”).

 

 

2.

The distributor has already employed Shanghai Pudong Development Bank Co., Ltd. to act as the lead underwriter and bookkeeping manager.

 

3.

The investor has the power and intention to invest in the oriented tools. It completely understands the nature of the debt financing tool issued by the distributor and related risks faced by its subscription or transfer. It is willing to accept the self-discipline management of National Association of Financial Market Institutional Investors. It also agrees to accept the rights and obligations stipulated in this agreement.

 

Based on the principles of honesty and trustworthiness, equality and mutual benefit, and true ideographical expression, the distributor and investor enter into the following agreement with respect to the issuance and subscription of oriented tools through friendly consultation.

 

 

Article One Distribution and Subscription of Oriented Tool

 

1.1 The distributor decides to submit the oriented tool with the registered amount of [750 million RMB] to National Association of Securities Dealers.

 

1.2 The distributor should inform oriented investors of oriented tool’s name, distribution amount, deadline, issue price or confirmation prescription of interest rate, etc. issue clauses and terms before issuing every time.

 

1.3 Investors are willing to participate in any issue of oriented tool with the above-mentioned registered limit with the distributor and have rights to decide whether they will submit subscription application in line with issue clauses and terms of current oriented tool.

 

 

Article Two Fund-raising Purpose

 

2.1 The distributor promises that fund-raising purpose of oriented tool shall conform to laws and regulations and national policy requirements and use as requested.

 

2.2 In case the fund-raising purpose changes during duration of oriented tools, the modified fund-raising purpose should conform to the laws and regulations and national policy requirements. The distributor should obtain the consent of the investor 5 workdays earlier before the modification of fund-raising.

 

2.3 Modification procedure of fund-raising:

 

2.3.1 The distributor discloses the modification information of fund-raising or inquires the opinion of oriented investor in accordance with the way stipulated in Article 3.1 of this agreement.

 

2.3.2 The investor who disagrees with the modification of fund-raising purpose could notify the distributor or lead underwriter pursuant to the way stipulated in Article 11 of this agreement within 5 workdays after the distributor discloses the modification plan of fund-raising purpose.

 

 

2.3.3 In case the investor doesn’t express its disagreement opinion to the distributor or the lead underwriter within 5 workdays after the distributor discloses the modification plan of fund-raising purpose, it will be deemed as that the investor agrees with the distributor’s modification of fund-raising purpose.

 

2.3.4 In case more than 50% (not including 50%) (agreed proportion of investors) of the total investors don’t express disagreement to the distributor or the lead underwriter within 5 workdays after the distributor discloses the modification plan of fund-raising purpose, the distributor could modify the fund-raising purpose according to the previously disclosed modification plan. Otherwise, the distributor should not modify the fund-raising purpose.

 

2.4 In case the distributor modifies the fund-raising purpose without the necessary permission of this agreement, any current investor has the right to require the distributor to give a reasonable explanation. The investor is also entitled to apply for corresponding protective measures according to Article 4.1 and 4.2 of this agreement when it disapproves the distributor’s explanation.

 

 

Article Three Information Disclosure

 

3.1 Way of information disclosure: the distributor will conduct information disclosure in accordance with the way appointed in Article 11 of this agreement or in the way of Shanghai Clearing House’s website and announcement of Chinese currency web.

 

3.2

Disclosure of issuance situation: The distributor should disclose the practical issuance scale, term, interest rate, and other related information of the current oriented tools to the investor next workday after it completes the creditor and debtor registration of oriented tools.

 

3.3

Regular information disclosure during duration: During the duration of oriented tools, the distributor will disclose the audited financial report of last year and accounting statement of parent company before April 30 every year.

 

3.4

Disclosure of major events: During the duration of oriented tools, in case the following major events of distributor occur:

 

(1)

The name, operation policy and business scope of the distributor has significant changes.

 

(2)

The external condition of the distributor’s production and operation has significant changes.

 

(3)

The distributor involves a significant contract which may have important influence on its assets, liabilities, rights and interests, and business performance.

 

 

(4)

The distributor encounters mortgage, pledge, sell, transfer, and scrap of assets which may influence its debt paying ability.

 

(5)

The distributor fails to pay off the significant debts which are due.

 

(6)

The distributor bears the responsibility of a large amount of compensation or the responsibility of compensation affects its normal production and operation, and is hard to be eliminated.

 

(7)

The distributor has significant loss of more than 10% of the net asset.

 

(8)

The absolution of other’s debts by the distributor exceeds a certain amount, which may influence the distributor’s debt paying ability.

 

(9)

More than one third of directors, or two thirds of supervisors, chairman or the general manager have changes; the chairman or the general manager fails to fulfill their duties.

 

(10)

The distributor makes a decision of capital reduction, incorporation, separation, and application for bankruptcy, or enters the bankruptcy procedure legally or is closed under order.

 

(11)

The distributor involves the market rumors that need to be explained.

 

(12)

The distributor involves significant lawsuit and arbitration.

 

 

(13)

The distributor is investigated by the authority because it is suspected of being involved in violating laws and rules; or it suffers criminal punishment or significant administrative punishment; the director, supervisor, or senior manager is investigated by the authority because it is suspected of being involved in violating laws and rules or the authority adopts obligatory measures.

 

(14)

The distributor encounters seizure, pledge or freezing of assets which may influence its debt paying ability; the distributor’s main or complete business is caught in suspense which may influence its debt paying ability.

 

(15)

The distributor provides significant guarantee for others.

 

The distributor should disclose to the investor in line with the way agreed as follows within 2 workdays after the occurrence of disclosure.

 

The way appointed in Article 11 of this agreement or the way published on www.shclearing.com and www.chinamoney.com.cn.

 

3.5

Disclosure of payment of interest and encashment: The distributor should disclose the encashment of principal and interest and payment of interest 5 workdays earlier before the encashment date of principal and interest of oriented tools.

 

 

(1)

The distributor fails to cash the principal or interest of debt financing tool according to the agreement.

 

(2)

The distributor transfers the debt financing tool to pay off the full or part obligation.

 

(3)

The distributor modifies the credit improvement arrangement or credit improvement institution, leading to significantly bad influence on the rights and interests of possessors of debt financing tool.

 

(4)

The distributor or credit improvement institution has capital reduction, incorporation, separation, dissolution, application for bankruptcy, or they are taken over, stops production under order, or their license or business license is seized temporarily or revoked.

 

(5)

The one-time capital reduction of distributor or credit improvement institution caused by their free transfer of asset, asset transfer, debt reduction, equity transaction, trusteeship of the stock right, etc, exceeds 10% of the most recently audited net asset, or the accumulated reduction of capital in 2 years exceeds 10% of the net asset (subject to the most recently audited net asset when the initial reduction of capital happens); or despite the capital reduction doesn’t reach the foresaid index, it has significant impact on the production and operation of distributor or credit improvement institution.

 

 

(6)

The possessors who independently or collectively hold more than 30% of the balance of the current debt financing tools propose to convene the meeting.

 

(7)

Other situations stipulated in the agreement of oriented issuance under which the possessors’ meeting should be held.

 

(8)

Other situations stipulated in laws and regulations under which the decision should be made through possessors’ meeting.

 

 

Article Four Protection of Investors

 

4.1 In the duration of oriented tool, when it occurs special situations, investors will have rights to convene possessors’ meeting of oriented tool; or take corresponding measures in line with appointment between the distributor and investors [if so, please hereby explain it].

 

(1)

The distributor fails to cash the principal or interest of debt financing tool according to the agreement.

 

(2)

The distributor transfers the debt financing tool to pay off the full or part obligation.

 

(3)

The distributor modifies the credit improvement arrangement or credit improvement institution, leading to significantly bad influence on the rights and interests of possessors of debt financing tool.

 

(4)

The distributor or credit improvement institution has capital reduction, incorporation, separation, dissolution, application for bankruptcy, or they are taken over, stops production under order, or their license or business license is seized temporarily or revoked.

 

 

(5)

The one-time capital reduction of distributor or credit improvement institution caused by their free transfer of asset, asset transfer, debt reduction, equity transaction, trusteeship of the stock right, etc, exceeds 10% of the most recently audited net asset, or the accumulated reduction of capital in 2 years exceeds 10% of the net asset (subject to the most recently audited net asset when the initial reduction of capital happens); or despite the capital reduction doesn’t reach the foresaid index, it has significant impact on the production and operation of distributor or credit improvement institution.

 

(6)

The possessors who independently or collectively hold more than 30% of the balance of the current debt financing tools propose to convene the meeting.

 

(7)

Other situations stipulated in the agreement of oriented issuance under which the possessors’ meeting should be held.

 

(8)

Other situations stipulated in laws and regulations under which the decision should be made through possessors’ meeting.

 

4.2 Events and responsibilities of default

 

Unless there is force majeure, the responsibilities of default should be executed as follows:

 

4.2.1 Events and responsibilities of the distributor’s default

 

 

(1) In case the distributor fails to pay the unpaid payables to the investor pursuant to this agreement, it should pay the liquidated damages regarding the unpaid payables to the investor. The liquidated damages should be calculated since the date of default according to 0.05% of daily interest rate of unpaid payables until the date of completing the payment.

 

(2) In case the distributor violates the provisions of this agreement, Debt Financing Tools Management Methods of Non-financial Enterprises in Inter-bank Bond Market and other laws, and related self-discipline standard documents of National Association of Financial Market Institutional Investors, leading to the loss of the investor, it should compensate for the practical loss caused to the investor.

 

(3) In case the above default events (1) and (2) happen to the distributor, the investor has the right to delay the performance or terminate the investment obligations under this agreement without bearing any liability for damage.

 

4.2.2 Events and responsibilities of the investor’s default

 

(1) In case the investor fails to fully pay the fund-raising in accordance with this agreement, it should pay liquidated damages of unpaid payables to the distributor except immediately fulfilling the corresponding obligation of payment. The liquidated damages should be calculated since the date of default according to 0.05% of daily interest rate of unpaid payables until the date of practical payment. Under the notice sent by the distributor or lead underwriter, if the investor fails to fulfill the obligation of payment within 3 workdays after the appointed date of payment, the distributor and lead underwriter have the right to transfer the amount of oriented tools subscribed by the investor to other investors and investigate and affix the investor’s responsibility of default.

 

 

(2) In case the investor violates the provisions of this agreement, Debt Financing Tools Management Methods of Non-financial Enterprises in Inter-bank Bond Market and other laws, and related self-discipline standard documents of National Association of Financial Market Institutional Investors, leading to the loss of the distributor, it should compensate for the practical loss caused to the distributor.

 

(3) The obligation of every investor under this agreement is independent. Any investor will not bear any joint liability for the practical loss caused to the distributor due to other investors’ defaults, actions or opinions.

 

4.3 In case there is any dispute relating to the effectiveness and execution of resolution of possessors’ meeting or protective measures agreed by this agreement, it should be settled according to Article 12 of this agreement.

 

 

4.4 Coping mechanism of default:

 

4.4.1 Responsibilities of trustee organization

 

(1) The lead underwriter acts as the trustee organization and convenes the possessors’ meeting when events which may affect the significant rights and interests of investors occur.

 

(2) Deal with the negotiation or litigation between the investor and distributor diligently in the duration of oriented tools.

 

4.4.2 Responsibilities of the distributor

 

(1) Notify the investor and trustee organization immediately when events which may affect the significant rights and interests of investors occur.

 

(2) In case the distributor sets guarantee for oriented tools, it should coordinate with the trustee organization to provide corresponding guarantee rights certificate and other related documents; when it is estimated that the distributor cannot pay back the debts, the distributor should coordinate with the trustee organization to supplement a guarantee or adopt other measures.

 

 

Article Five Rights and Obligations of the Distributor

 

5.1 Rights of the distributor:

 

5.1.1 It enjoys the right of using fund-raising in line with the stipulated form.

 

5.2 Obligations of the distributor:

 

5.2.1 Based on the principle of honesty, credibility, and diligence, it should manage and use the fund-raising in line with the provision of this agreement. In case the distributor plans to change the fund-raising purpose, it should perform the necessary procedure according to this agreement.

 

5.2.2 It should have the obligation to repay capital and interest to investors who hold oriented tool by appointment and perform other obligations appointed by this agreement.

 

5.2.3 It should accept the supervision of the investor and additionally provide guarantee and compensate for the liquidated damages (provide guarantee/repay the principal and interest of oriented tools in advance/compensate for liquidated damages/please fill in others_______/________) according to the requirements of the investor when default events of the distributor stipulated in this agreement occur.

 

 

5.2.4 It should perform the information disclosure obligation in a true, accurate, complete, immediate and fair way without false records, misleading statement or significant omission according to the self-discipline management rules of National Association of Financial Market Institutional Investors and the provisions of this agreement.

 

 

Article Six Rights and Obligations of Investors

 

6.1 Rights of investors:

 

6.1.1 Investors enjoy the right to charge principal and interest by appointment;

 

6.1.2 Investors have the right to decide whether to transfer its subscribed oriented tool;

 

6.1.3 In case the investor finds out that the events which may damage the distributor’s interests occur, it will immediately exercise its rights as the investor of oriented tool according to the provisions of laws and regulations and this agreement.

 

6.2 Obligations of the investor:

 

6.2.1 The investor has the qualification and aptitude to purchase oriented tool.

 

6.2.2 The investor has already obtained all authorization and approval of participating in issuing oriented tool.

 

6.2.3 The investor unconditionally agrees that the distributor could continually arrange other organizations with the qualification of oriented investors to sign this agreement after its signature of this agreement, and endows it with the right of subscribing oriented tool.

 

6.2.4 The National Association of Financial Market Institutional Investors controls self-discipline management over the oriented investors.

 

 

6.2.5 The investor should immediately notify the distributor and lead underwriter when the address, fax number and other information change.

 

Article 7 Confidentiality

 

7.1 As for the materials of business, financial condition, and other non-public information relating to the other party obtained by one party from relevant work under this agreement (including written material and non-written material, hereinafter referred to as “confidential material”), unless otherwise stipulated in this agreement, the party who accepts the confidential material should keep the confidentiality of the material without disclosing the above confidential material to anyone or any organization.

 

7.2 The above Article 7.1 should not apply to the following confidential material:

 

7.2.1 The material that has been known by the receiver before the issuance and this fact can be proved by the written records.

 

7.2.2 The material that has been disclosed not because the receiver’s breach of this agreement.

 

7.2.3 The material obtained by the receiver from the third party which doesn’t bear any confidentiality obligation for the confidential material.

 

 

7.2.4 The confidential material which is disclosed after the consent of its provider.

 

7.2.5 The material which is disclosed according to the laws, regulations, rules, and requirements of National Association of Financial Market Institutional Investors and other authorities.

 

7.3 Each party shall guarantee that itself and the directors, supervisors, senior managers and other related employees of affiliated parties relating to the work under this agreement should abide by the confidentiality obligation stated in this article in the same way.

 

7.4 The receiver is entitled to disclose the confidential material to affiliated parties, intermediary agencies, and the employees and counselors of each party for the purpose of related work under this agreement. However, under this situation, the receiver should only disclose the material to the people or organization with reasonable business needs, and the foresaid parties should abide by this confidential term.

 

7.5 One party has the right to disclose the material to related governmental departments or institutions pursuant to laws and regulations, related self-discipline standard documents of National Association of Financial Market Institutional Investors, and requirements of authorities under the premise of notifying the disclosure to other parties as soon as possible before the foresaid disclosure without violating laws and regulations, and related self-discipline standard documents of National Association of Financial Market Institutional Investors.

 

 

7.6 Any provision in this article should not interfere with the announcement or disclosure which is made by one party based on honest judgment in line with the laws and regulations, and related self-discipline standard documents of National Association of Financial Market Institutional Investors.

 

7.7 The provision of this article doesn’t apply to the disclosure made with the prior written consent of each party hereto.

 

Article 8 Modifications

 

8.1 After reaching consensus through consultation, the signatories of this agreement can effectively modify its provisions.

 

8.2 In case the oriented tool under this agreement plans to increase the oriented investors, it shall notify the distributor through the lead underwriter. Within 5 workdays after issuing the notice, unless the distributor expresses disagreement in written form, otherwise it will be deemed as the distributor agrees that the new increased investors enter into this agreement and has the equal rights and obligations with the investors who have signed this agreement as oriented investors after signing this agreement unilaterally.

 

 

8.3 Provisions relating to the modified procedure of other events of this agreement:

 

In case the terms of this agreement need to be modified, it should obtain the agreement of each party after negotiation. In addition, this agreement should be modified in written form or the supplementary agreement should be made, and the modification should be submitted to National Association of Financial Market Institutional Investors.

 

Article 9 Termination of Issuing Oriented Tool

 

9.1 In case the following situations occur, each party should firstly turn to friendly negotiation. If the friendly negotiation fails, the investor has the right to send a written notice to the distributor requiring the correction of distributor. In case the distributor doesn’t make correction within 15 days after receiving the written notice of correction, the investor has the right to revoke the subscription application submitted to the distributor:

 

9.1.1 There is evidence showing that the distributor is not in line with the issuance condition stipulated by People’s Bank of China or other regulatory agencies, or the distributor’s basic operation and other situations have material changes, no longer conforming to the issuance condition or related provisions.

 

 

9.1.2 The distributor violates or doesn’t perform the provisions of this agreement.

 

9.1.3 Any statement, guarantee and commitment with respect to oriented tools made by the distributor is inconsistent with the facts, misleading or fails to be performed, which is sufficient to affect the performance of this agreement.

 

9.1.4 The distributor enters bankruptcy procedure or other events which will significantly damage its debt paying ability of oriented tools occur.

 

9.2 In case the following situations occur, the distributor has the right to send a written notice to the investor and cancel the investor’s qualification of subscription.

 

9.2.1 The investor violates or doesn’t perform the provisions of this agreement.

 

9.2.2 Any statement, guarantee and commitment with respect to oriented tool made by the investor is inconsistent with the facts, misleading or fails to be performed, which is sufficient to affect the performance of this agreement.

 

9.3 In case the complete or part of the terms of this agreement terminate due to the occurrence of events stipulated in the agreement, the termination shall not affect any rights or proposals that have been formed, or any obligations or responsibilities of each party accrued by their commitment and guarantee under this agreement.

 

 

Article Ten Arrangement of Credit Improvement(If any)

 

Wuhan Kingold Jewelry Co., Ltd 2014-2016 non-public oriented debt financing tool adopts the following arrangement of credit improvement:

 

10.1 Agent of creditor’s rights

 

The distributor and Wuhan Branch of Shanghai Pudong Development Bank sign Agency Agreement of Creditor’s Rights on Wuhan KINGOLD Co., Ltd. 2014-2016 Non-public Oriented Debt Financing Tool, agreeing SPDB will handle the related affairs of the current non-public oriented debt financing tool (hereinafter referred to as “oriented tool”), protect the interests of bondholder, and accept the warranty property provided by Party A for the issuance of oriented tool as representative and agent of all bondholders of “Wuhan KINGOLD Co., Ltd. 2014-2016 Non-public Oriented Debt Financing Tool”.

 

 

10.2 Measures of credit improvement

 

10.2.1 Gold impawning supervision

 

The phase one issues 400 million Yuan and plans to adopt the way of gold impawning supervision to improve credit. Gold impawning supervision applies cash commodity static impawning patter to operate, uses the enterprise own gold and product (no mosaic) to impawn, sets up lower limiting value of impawning in line with 1.25 times of issuance amount (impawning rate of 80%), and implements the total quantity control mode, i.e. the total quantity of gold in the company warehouse must exceed the sum of the company’s lease amount of gold and the total quantity of gold impawned to the supervision agent Wuhan Branch of Shanghai Pudong Development Bank (hereinafter referred to as “SPDB Wuhan Branch”). Different from the dynamic impawning supervision of gold leasing business, this impawning adopts static supervision mode. In other words, the impawning gold will be sealed up for safekeeping in impawning vault, and will not be used for daily production and turnover of the distributor. Meanwhile, the supervision agent SPDB Wuhan Branch and the distributor will transact mortgage registration at Wuhan Industrial and Commercial Bureau to make sure the effectiveness of impawning within 5 workdays after the pledge enters the warehouse for supervision, which is different from the gold leasing business that doesn’t set up pledge registration for gold. The pledge will be stored at the company’s second-floor closed factory and vault. Address: Special No. 15, Huangpu Science Park, Wuhan city. The third-party logistics supervision company China Shipping Logistics Hubei Co., Ltd. approved by Shanghai Pudong Development Bank carries out 24-hour ceaseless supervision. The value of gold pledge always maintains at least 500 million Yuan. According to the impawning rate of 80%, its value is 400 million Yuan.

 

 

As for the management of gold pledge, the related department of SPDB Wuhan Branch is responsible for mark-to-market operation. The mark-to-market work is conducted once a day. The content of mark-to-market includes but is not limited to the weight (number), value (amount), etc, of impawning gold on the day of mark-to-market. The value of impawning gold is calculated based on the closing price of AU9995 in Shanghai Gold Exchange 1 workday earlier before mark-to-market. When the value of pledge is less than the minimum lower limit of 500 million Yuan, it should send a notice of adding cash deposit or pledge to the borrower, requiring the borrower to add cash deposit and pledge to make the value of pledge no less than 1.25 times of the lower limit supervision, i.e. less than the impawning rate of 80% before the opening quotation on Shanghai Gold Exchange next day. The mark-to-market recording book of impawning gold should be established to register the weight and value of the pledge every day to guarantee the full value of pledge. In case the distributor fails to add the warranty within 10 workdays and yet fails to perform the remedial measure after the urge of agent of creditor’s rights, the agent of creditor’s rights may convene the bondholder’s meeting and report the related situation. The bondholders’ meeting has the right to require the distributor immediately repay the principal and interest in advance through resolution. In case the distributor fails to conduct repayment within 30 workdays after starting the procedure of repayment in advance, the agent of creditor’s rights SPDB Wuhan Branch is entitled to adopt other measures to claim compensation from the principal and interest of oriented tool and other loss.

 

 

10.2.2 Land and mortgage of constructing project

 

The phase two issues 350 million Yuan and plans to adopt land and mortgage of constructing project. The land and construction in process are held by Wuhan Huayuan Science and Technology Development Limited Company, which has already issued the commitment letter to the distributor. It promises that the land and construction in process don’t transact mortgage. Moreover, they will be regarded as mortgage and used for issuing the oriented tool of the phase two. The land mortgage is the site which is located at Hanhuang Road 8, Jiangan District under the name of Wuhan Huayuan Science and Technology Development Limited Company with the State-owned Land Use Certificate No. A06020003 and obtained from transfer. According to the certificate, the land use is industrial estate; the practical use is industrial estate of construction in process; the total area of land is 66,666.44 square meters; the nature of land use rights is transfer; the remaining useful life of land is 42.87 years (from August 15, 2014 to June 29, 2057). According to the preliminary appraisal report issued on August 20, 2014 by Wuhan Guojia Real Estate Appraisal Co., Ltd., the total land value is 79.9997 million Yuan; the cost of realization is RMB 4.4835 million Yuan; the net value of mortgage is RMB 75.5162 million Yuan. The estimated value of land that plans to be mortgaged is 75.5162 million Yuan. It can realize the mortgage value of 37.7 million Yuan according to the mortgage rate of 50%.

 

 

Due to the progress of constructing project, the current land value has been appraised, while it is unable to appraise the construction in process. Here, the total value of land and constructing project subjects to the practical appraisal value and the mortgage rate is 50%. The insufficient part of mortgage value is made up by pledge of gold. The management requirements of pledge are same with that of the phase one. The value of pledge is no less than 1.25 times of lower limit supervision, i.e. less than the impawning rate of 80%.

 

 

Wuhan Guojia Real Estate Appraisal Co., Ltd. is employed to carry out the mortgage appraisal of land and constructing project. The formal appraisal report will be completed before the issuance of phase two. Before issuance, the mortgage registration of land and constructing project should be transacted at Wuhan Housing Security and Housing Authority to make sure the authenticity and effectiveness of mortgage. Wuhan Guojia Real Estate Appraisal Co., Ltd. is the first real estate appraisal organization with national-level qualification in Hubei province. It is previously known as Wuhan Real Estate Appraisal Office and is affiliated with Wuhan Real Estate Bureau

 

10.2.3 Actual controller of Jia Zhihong acts as the warrantor.

 

Actual controller of Jia Zhihong, as the warrantor, signs the Maximal Amount Contract of Guaranty with Shanghai Pudong Development Bank Wuhan Branch (hereinafter referred to as “SPDB Wuhan Branch”) on matters of Wuhan Kingold Jewelry Co., Ltd 2014-2016 non-public oriented debt financing tool and promises seriously:

 

 

The warrantor agrees Wuhan Kingold Jewelry Co., Ltd to perform all obligations of the Agency Agreement on Wuhan Kingold Jewelry Co., Ltd 2014-2016 Non-Public Oriented Debt Financing Tool and assumes the liability of guaranty.

 

10.3 Mortgage and mortgage agent

 

The distributor signs the Agency Agreement on Wuhan KINGOLD Co., Ltd 2014-2016 Non-Public Oriented Debt Financing Tool with SPDB Wuhan Branch. Meanwhile, this agreement promises to appoint SPDB Wuhan Branch to hold the post of the agent of mortgage and pledge right of the current oriented tool. The one of mortgage/pledge represents the holder of oriented tool to exercise rights of mortgage and pledge. The agent of mortgage and pledge right should sign the mortgage and pledge contract with the distributor pursuant to laws, administrative regulations and rules, and the provisions of this agreement, immediately transact the mortgage and pledge registration, and protect the interests of bondholder.

 

Unless otherwise stipulated or the possessor’s meeting of oriented tool decides to terminate the employment of SPDB Wuhan Branch as the warranty agent, any possessor of oriented tool shall not terminate the employment. Any transferee of the current oriented tool is regarded as automatically accepting the employment of warranty agent under this agreement. In addition, any transfer of current oriented tool is deemed as that the pledgor has already notified the investor of oriented tool automatically.

 

 

10.4 Asset Pledge Scheme

 

Wuhan KINGOLD Co., Ltd and warranty agent (SPDB Wuhan Branch) agree to give mortgage and pledge of gold, land and construction in process to warranty agent by transacting registration formality of gold, land and construction in process in registration authority, after the 10 workdays of issuing non-public oriented debt financing tool. The warranty agent signs the Repayment Account and Mortgage/Pledge Asset Supervision Agreement on Wuhan KINGOLD Co., Ltd 2014-2016 Non-Public Oriented Debt Financing Tool with SPDB Wuhan Branch, requiring the distributor to set up repayment account and supervise the mortgage/pledge asset. Before completing the registration, the agent of creditor’s rights supervises the fund-raising. In case the gold pledge has flaws in formality, etc, leading to the failure of pledge within the required time, the agent of creditor’s rights has the right to require the distributor to add the equivalent asset mortgage/pledge within 5 workdays. In case it fails to add the effective mortgage/pledge within 5 workdays, the agent of creditor’s rights has the right to require the distributor to repay the principal and interest in advance.

 

 

10.4.1 Gold impawning supervision scheme

 

The distributor has already signed Maximum Amount Pledge Contract of Movable Property with SPDB Wuhan Branch. The distributor and SPDB Wuhan Branch transact registration of pledge together. Pledge certificate and ownership demonstration of properties pledged (value added tax invoice of purchasing gold) will be consign to SPFB Wuhan Branch for custody immediately, after applying for pledge certificate.

 

10.5 In case the registration amount is issued by stages, the foresaid guarantee measures cover the registration amount and the investors of each phase enjoy the equal rights. If the oriented tool of phase one has defaults, the distributor needs to repay the full principal and interest of oriented tool in duration within the registration amount.

 

Article 11 Notice and Delivery

 

11.1 Unless otherwise stipulated in this agreement, any notice or information disclosure given by one party to other parties of this agreement pursuant to the provisions of this agreement should be made in writing form, written in Chinese language, and send to the related address listed in this agreement by personal delivery, express delivery service, registered post, fax, electronic information system, etc.

 

 

11.1.1 The notice sent by personal delivery or express delivery service comes into effect on the signing date after receiving the service return receipt. In case the receiver, the agent of receiver, or the bankruptcy administrator of receiver refuses to sign on the service return receipt, the addresser can adopt notarization delivery or give an effective notice through announcement delivery or detention delivery stipulated in the supplementary agreement made by each party hereto. The effective notice sent by notarization delivery, announcement delivery or detention delivery should be deemed as having the same effectiveness in all respects with the effective notice sent by original delivery method.

 

11.1.2 The notice sent by registered post comes into effect on the signing date.

 

11.1.3 The notice sent by fax comes into effect on the date when the receiver acknowledges that it receives the legible fax.

 

11.1.4 The notice sent by electronic information system comes into effect on the date when the notice enters the electronic information system designated by the receiver.

 

11.1.5 The notice sent by other means comes into effect on the date separately agreed by each party herein.

 

11.2 In case the foresaid date is non-workday, or the notice is delivered, received or enters the related system after the business hours end on some workdays, the notice shall be deemed as coming into effect next workday.

 

 

11.3 In case the postal address or contact information of any party changes, this party should notify the other party immediately according to the ways stipulated in this agreement. The modified postal address or contact information comes into effect when the other party receives the notice of modification.

 

11.4 The contact information of each party herein is as follows:

 

Distributor: Wuhan KINGOLD CO., Ltd.

 

Postal address: Special No. 15, Huangpu Science Park, Jiangan District, Wuhan

Contact: Hu Qiao

Tel: 027-65694977

Fax: 027-65694977

Postal code: 430023

 

Investor: See List of Investors and Basic Information of this Agreement

 

 

Article Tewelve Dispute Resolution

 

12.1 This agreement is administered by Law of the People’s Republic of China (purposes of this agreement are exclusive of the law of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan, as well as are exclusive of conflict rules) and explains based on it.

 

12.2 In case the distributor and investor fail to reach consensus with respect to the dispute arising from this agreement within 15 days after their negotiation, any party has the right to submit it to China International Economic and Trade Arbitration Commission for dispute resolution by means of arbitration according to the effective Arbitration Rules of China International Economic and Trade Arbitration Commission. The arbitration place is Beijing. The arbitral decision is final with binding force on each party herein.

 

12.3 The arbitration relating to any dispute arising from this agreement will not influence the effectiveness and performance of other terms herein.

 

 

Article Thirteen Come to Effect and Termination

 

13.1 Entry-into-force conditions

 

13.1.1 All parties have already adopted all necessary internal behaviors and make it obtain authorization to sign and perform this agreement. The representative who signs on this agreement has already obtained rightful authorized signature of this agreement and makes all parties constrained by this agreement. This agreement needs the legal representative and authorized agent of all parties to sign (or seal) and stamp common seal or special seal for contractual uses.

 

13.1.2 The oriented tool under this agreement has already registered in China Association of Interbank Market Dealers.

 

13.2 The due date of this agreement subjects to the termination of the relationship of all the rights and obligations of each party under this agreement.

 

13.3 As for the matters unmentioned in this agreement, a supplementary agreement should be made in writing separately. In case there is inconsistency between the supplementary agreement and this agreement, the former shall prevail.

 

13.4 This agreement is made in twelve copies with each party holding one copy. The remaining copies are submitted to related supervision organizations.

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Distributor: Wuhan Kingold Jewelry Co., Ltd (Seal)

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Shanghai Pudong Development Bank Co., Ltd (Seal)

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Ping An Bank Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: China Merchants Bank Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Bank of Dalian

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: China Merchants Securities Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: AXA SPDB Investment Managers

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Hwabao Trust Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: First Capital Securities Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Shanghai Guotai Junan Securities Management Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

(This page is the signature of Authorized Distributor Agreement on Wuhan Kingold Jewelry Co., 2014-2016 Non-Public Oriented Debt Financing Tool. This page has no main body)

 

Investor: Donghai Securities Co., Ltd

 

Legal representative (or authorized representative): (Signature)

 

 

List of Investors and Basic Information

 

Company name	Shanghai Pudong Development Bank Co., Ltd
Legal representative(or legal authorized representative)	Ji Xiaohui
Address	No. 12, East One Road, Zhongshan, Shanghai
Contact number	021-61616488
Fax	021-63604215
Contact	Zhang Wei
E-mail	[email protected]
Zip code	200001

 

Company name	Ping An Bank Co., Ltd
Legal representative(or legal authorized representative)	Sun Jianyi
Address	Pingan Finance Building 8F, No. 1333 Loop Road, Lujiazui, Pudong, Shanghai
Contact number	021-20368125
Fax	021-20259969
Contact	Han Yujia

 

 

E-mail	[email protected]
Zip code	200120

 

Company name	China Merchants Bank Co., Ltd
Legal representative(or legal authorized representative)	Fu Yuning
Address	Floor 6, China Merchants Bank, Shanghai Building, No. 1888, Loop Road, Lujiazui, Pudong New Area, Shanghai
Contact number	021-20625866
Fax	021-58421192
Contact	Yang Jiamu
E-mail	[email protected]
Zip code	200120

 

Company name	Bank of Dalian
Legal representative(or legal authorized representative)	Chen Zhanwei
Address	No. 88, Zhongshan Road, Dalian
Contact number	0411-82311975

 

 

Fax	0411-82311727
Contact	Ban Yunhao, Niu Ying
E-mail	[email protected]   [email protected]
Zip code	116001

 

Company name	China Merchants Securities Co., Ltd
Legal representative(or legal authorized representative)	Gong Shaolin
Address	Floor 3, Dongfang Building, No. 1500, Century Avenue, Pudong New Area, Shanghai
Contact number	021-20398520
Fax	021-68407678
Contact	Ke Qian
E-mail	[email protected]
Zip code	200122

 

Company name	AXA SPDB Investment Managers
Legal representative(or legal authorized representative)	Jiang Mingsheng
Address	Room 316, Building 3, No. 981, Pudong

 

 

	Avenue, Pudong New Area, Shanghai
Contact number	021-23212831
Fax	021-23212980
Contact	Tao Yi
E-mail	[email protected]
Zip code	200135

 

Company name	Hwabao Trust Co., Ltd
Legal representative(or legal authorized representative)	Zheng Anguo
Address	Floor 59, No. 100, Century Avenue, Pudong New Area, Shanghai
Contact number	021-38506964
Fax	021-68403802
Contact	Shi Fuming
E-mail	[email protected]
Zip code	200120

 

Company name	First Capital Securities Co., Ltd
Legal representative(or legal authorized representative)	Liu Xueming

 

 

Address	Floor 25, Building B, Zhongming Times Square, No. 12, Sungang Road, Luohu District, Shenzhen
Contact number	0755-23838682
Fax	0755-25832940
Contact	Li Gaoya
E-mail	[email protected]
Zip code	518038

 

Company name	Shanghai Guotai Junan Securities Management Co., Ltd
Legal representative(or legal authorized representative)	Gu Jie
Address	Floor 24, No. 168, Yincheng Central Road, Shanghai
Contact number	021-38676390
Fax	021-38670390
Contact	Chen Nan
E-mail	[email protected]
Zip code	200120

 

Company name

Donghai Securities Co., Ltd

 

 

Legal representative(or legal authorized representative)	Zhu Kemin
Address	Bond Issue Department, Floor 4, Donghai Building, No. 1928, Dongfang Road, Pudong New Area, Shanghai
Contact number	021-20333395
Fax	021-50498839
Contact	Ruan Jieqiong
E-mail	[email protected]
Zip code	200125

 

 

Exhibit 10.2

 

[Unofficial English Translation]

 

The Underwriting Agreement on Non-Financial Business Debt Financing Tool of Interbank Bond Market

 

(2013 Version)

 

All right Reserved: China Association of Interbank Market Dealers 2013

 

 

Statement

 

The copyright of Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools (version 2013) (short for Underwriting Agreement) belongs to National Association of Financial Market Institutional Investors (NAFFII). Except for relevant business hereunder or teaching and research purpose, without the copyright owner’s written approval in advance, any one shall not copy, duplicate, translate, or distribute the paper, electronic, or version of other form of Underwriting Agreement.

 

The parties hereto may supplement or modify relevant terms in Underwriting Agreement (however, the content in Article 21 of Underwriting Agreement shall be not modified) and sign corresponding supplemental agreement according to relevant stipulations of Underwriting Agreement via consensus. Furthermore, the parties hereto shall timely submit underwriting agreement and supplemental agreement (and its modification) to NAFFII.

 

 

Table of Contents

 

Article 1 Definition	2
Article 2 Agreement composition and effective grade	6
Article 3 Appointment on underwriter	7
Article 4 Issuance of debt financing tools	8
Article 5 Underwriting of debt financing tools	11
Article 6 Transfer and payment of raised funds	13
Article 7 Fee and payment	14
Article 8 Information disclosure	19
Article 9 Payment of interest and capital	19
Article 10 Follow-up management of debt financing tools	20
Article 11 Statement, guarantee, and promise	21
Article 12 Precondition	21
Article 13 Major adverse events	25
Article 14 Events of default and responsibilities for breach of contract	29
Article 15 Force majeure	31
Article 16 Confidentiality	33
Article 17 Transfer	34
Article 18 No waiver	35
Article 19 Way of notification and its effectiveness	35
Article 20 Signing of agreement and effectiveness	38
Article 21 Modification of agreement	38
Article 22 Rescission and termination of agreement	39
Article 23 Application of law and settlement of dispute	40
Article 24 Supplementary articles	41

 

 

Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools

 

In order to stipulate the underwriting behaviors of non-financial business debt financing tools, clearly state the issuer and the leader underwriter’s rights and obligations, protect all parties’ legal rights and interests, the parties hereto sign this agreement in accordance with relevant laws such as Contract Law of the People’s Republic of China and Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools as well as relevant self-discipline normative documents of NAFFII on the basis of equity and free will:

 

Party A/Distributor: Wuhan KINGOLD Co., Ltd

 

Party B/lead underwriter: Shanghai Pudong Development Bank Co., Ltd

 

Party C/lead underwriter (if any):                

 

Article 1 Definition

 

Unless otherwise specified herein, the following words are defined as below:

 

 

1.1 Debt financing tools: The debt financing tools refer to negotiable securities which are issued by non-financial business in interbank bond market and for which the capital shall be repaid with interest within certain time limit in accordance with the rules stated in Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools.

 

1.2 Issuer: The issuer refers to the issuer/co-issuer issuing debt financing tools hereunder.

 

1.3 Lead underwriter: The lead underwriter refers to underwriter institution with lead underwriting qualification of debt financing tools which has been entrusted by the issuer herein.

 

1.4 Lead underwriting party: The lead underwriting party refers to lead underwriter and co-lead underwriter (if any)/ associate lead underwriter (if any).

 

1.5 Bookkeeping supervisor: The bookkeeping supervisor refers to lead underwriter who is entrusted by the issuer to be responsible for specific operation of bookkeeping.

 

1.6 Underwriting group: The underwriting group refers to underwriting group of debt financing tools which consists of lead underwriting party and other underwriters in order to issue the debt financing tools of one issue hereunder.

 

1.7 Underwriting group agreement: It refers to the written agreement signed by and between lead underwriter and other underwriters in terms of jointly underwriting debt financing tools of one issue hereunder in order to specify all parties’ relevant rights, obligations, responsibilities and their work arrangement as well as other content in underwriting activity.

 

 

1.8 NAFFII: It refers to National Association of Financial Market Institutional Investors.

 

1.9 Registered amount: It refers to the amount of debt financing tools registered in NAFFII hereunder, and such amount is determined in Notice of Accepting Registration of NAFFII.

 

1.10 Registration validity: It refers to the validity of registered amount of debt financing tools verified in Notice of Accepting Registration of NAFFII.

 

1.11 Issuance scheme: It refers to descriptive document which is formulated by the issuer and the lead underwriter in accordance with Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools and relevant self-discipline normative documents of NAFFII upon adopting bookkeeping way to issue debt financing tools so as to make specific arrangement on various operations of bookkeeping; moreover, such descriptive document will be disclosed to the market as a part of issuance documents.

 

 

1.12 Issuance notice: It refers to the issuance notice of debt financing tools formulated by the issuer in accordance with Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools and relevant self-discipline normative documents of NAFFII so as to issue the debt financing tools of one issue hereunder.

 

1.13 Raising specification: It refers to the descriptive document formulated by the issuer in accordance with Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools and relevant self-discipline normative documents of NAFFII so as to issue the debt financing tools of one issue hereunder; moreover, such descriptive document is disclosed in issuance document.

 

1.14 Book building: It refers to the behavior that the member of underwriting group/investor issue out subscription order after the issuer and lead underwriter determine the interest/price range via negotiation, and then the bookkeeping supervisor records the interest/price and quantity will of debt financing tools subscribed by underwriting group/investor, determines final issuing interest/ price according to stipulated price and placement way and carry out placement.

 

1.15 Standby underwriting: It refers to a way of underwriting in which the lead underwriter purchases all debt financing tools which are not sold out within underwriting limit according to issuance interest/price on payment date stated on raising specification.

 

 

1.16 Working days: It refers to business days of commercial banks in Beijing to the public.

 

1.17 Notice day: It refers to the day on which the documents such as issuance scheme, issuance notice, and raising specification are published.

 

1.18 Issuance day: It refers to the issuance day determined for raising specification.

 

1.19 Payment day: It refers to the payment day determined for raising specification.

 

1.20 Chinese laws/laws: It refers to the laws, regulations, and rules effectively implemented in the People’s Republic of China (not including Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region for the sake of this agreement) as well as the normative documents with general binding effect issued by the institutions with legislative, judicial, and administrative management authority or function according to laws.

 

Article 2 Agreement composition and effective grade

 

2.1 This agreement consists of following parts:

 

2.1.1 Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools (version 2013) (short for “Underwriting Agreement”);

 

 

2.1.2 Supplemental Agreement to Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools (version 2013) (short for “Supplemental Agreement”, if any);

 

2.2 The abovementioned documents constitute single and complete agreement among parties hereto (short for “this agreement”).

 

2.3 In case of any inconsistency between Supplemental Agreement (if any) and Underwriting Agreement, the Supplemental Agreement shall prevail.

 

Article three: appointment on underwriter

 

3.1 The distributor appoints Party B as the lead underwriter of issuing debt financing tool under this agreement

 

[Please select to fill in: lead underwriter, co-lead underwriter].

 

The issuer entrusts Party C (if any) as            [Please select to fill in: co-lead underwriter, associate lead underwriter] of debt financing tools hereunder.

 

The lead underwriter agrees the appointment of the distributor, assists the distributor to register/arrange, and sell debt financing tool, as well as follow-up management in line with appointment of this agreement.

 

3.2 The distributor appoints Party B as the bookkeeping manager of issuing debt financing tool under this agreement, and appoints __________ (if there are multiple bookkeeping managers) to be responsible for bookkeeping filing.

 

 

Party B agrees to accept the appointment of the distributor, takes charge of bookkeeping filing of debt financing tool under this agreement, and agrees __________(if there are multiple bookkeeping managers) to be responsible for bookkeeping filing.

 

3.3 The placement result of book building and the final issuance interest shall be determined by lead underwriter according to the stipulations in Issuance Scheme.

 

Article Four: issue of debt financing tool

 

4.1 The distributor’s application for registration amount of Dealers’ association should not exceed RMB/U.S. dollar/please fill in RMB for others [750million] for debt financing tool in line with appointment of this agreement. Moreover, with the registered amount limit confirmed by Notification of Accepting Registration of dealers’ association, the distributor should standardize documents to issue debt financing tool in according with related self-discipline of dealers’ association.

 

4.2 The issuer shall have right to autonomously determine the amount of debt financing tools that are applied for registration to NAFFII according to laws and relevant self-discipline normative documents of NAFFII.

 

 

4.3 The distributor has the right to consult with lead underwriter to confirm issue of debt financing tool and deadline, amount, interest rate/price range, etc. issue clauses of every period with the registered amount limit confirmed by Notification of Accepting Registration of dealers’ association.

 

4.4 After this agreement comes into effect, the distributor has the right to decide whether it should submit registration application for debt financing tool to the dealers’ association, as well as whether it should issue debt financing tool actually after obtaining registered notification of dealers’ association.

 

4.5 The issuer shall have right to require the lead underwriter to timely notify the information related to issuance of debt financing tools that the lead underwriter knows earlier than the issuer due to the fact that the lead underwriter undertakes the obligations hereunder.

 

4.6 The issuer shall be obliged to pay underwriting fee and other fees on time and in full amount according to rules herein.

 

4.7 The issuer shall coordinate with lead underwriter to carry out due investigation work for the issuance of debt financing tools.

 

 

4.8 The issuer shall timely submit various kinds of materials related to this agreement to the lead underwriter, including but not limited to approval by supervision department, NAFFII, and other relevant institutions on relevant issuance documents of this issuance, transaction, and circulation as well as their modification or supplement, permission or registration/record notice, notice on suspending issuance of debt financing tools or suspending use of issuance documents, and documents, information, and data about corporate operation, finance, law status and grading, and shall ensure that the abovementioned documents, information, and data provided are true, real, and complete.

 

4.9 The issuer shall sign Letter of Confirmation on Interest/Price Range in writing form with lead underwriter, and the final issuance interest/price shall be determined according to Article 3.3.

 

4.10 The distributor should transact trusteeship, circulation, cash and information disclosure, etc. matters in line with regulations of registration hosting organization (□Central Treasury Securities Registration and Settlement Co., Ltd, □Interbank Market Clearing Co., Ltd), as well as China Foreign Exchange Trade System and national interbank funding center, etc. organizations.

 

 

4.11 At any time before the 1^st day of transaction and circulation of debt financing tools (including the 1^st day of transaction and circulation), if the issuer knows any situation which causes error in the statement, guarantee or promise made herein or makes the statement, guarantee or promise made herein become not real, not accurate or not incomplete, the issuer shall immediately notify the lead underwriter, and adopt necessary measures according to laws and relevant self-discipline normative documents of NAFFII as well as lead underwriter’s reasonable requirements to make remediation or publish such situation.

 

4.12 The issuer shall sign relevant agreement with relevant registration and trustee agency before notice day, and stipulate the matters related to both parties’ rights and obligations as well as fee in the process of entrusting registration and trustee agency to handle issuance registration, trusteeship, transfer trusteeship, creditor’s right management, and act for principal and interest redeeming business.

 

Article Five: underwriting of debt financing tool

 

5.1 Under this agreement, debt financing tool is the oriented tool for the distributor to register in dealers’ association. Moreover, it will be underwritten by lead underwriter (short-term financing bond/medium term note/SME’s collection notes/super short-term financing bond/oriented tool/asset support note/others for_________).

 

5.2 Except for additional appointments of supplemental agreement, underwriting of debt financing tool under this agreement should adopt the way of underwriting balance.

 

 

In case of existence of Party C, Party B and Party C’s underwriting limit proportion shall be     . Either lead underwriter shall not undertake joint liability for the other party’s underwriting limit, and each lead underwriter’s breach against its underwriting obligation shall not constitute the breath against other lead underwriter’s obligation.

 

5.3 The lead underwriter shall carry out due investigation on debt financing tools hereunder according to relevant requirements, and have right to require the issuer to provide various kinds of materials required in issuance, including but not limited to documents, information, and data about corporate operation, finance, law status and grading.

 

5.4 The lead underwriter shall transfer and pay the raised fund to the issuer on time and in full amount according to rules stated herein.

 

5.5 The lead underwriter shall have the obligation to organize professional personnel with rich experience to engage in issuance and underwriting work of debt financing tools hereunder.

 

5.6 The lead underwriter shall have the obligation to provide the issuer with issuance suggestions or scheme of debt financing tools if the issuer has relevant requirements.

 

 

5.7 The lead underwriter shall have the obligation to provide consulting suggestions to documents related to issuance of debt financing tools issued by the issuer; however, in terms of accounting, law, grading and other matters, the issuer shall depend on professional suggestions made by relevant intermediary organs and independently make decisions and judgment.

 

5.8 The lead underwriter shall be responsible for organize underwriting group, and carry out the underwriting work of debt financing tools hereunder.

 

5.9 The lead underwriter shall be responsible for organization and coordination among members of underwriting group, and assist the issuer to jointly coordinate with the works of intermediary organs related to accounting, law, and grading.

 

Article Six: funding-raising payment

 

6.1 Unless there are additional appointments in supplemental agreement, fund-raising will adopt the following way in article 6.1.1 to pay:

 

6.1.1 In the day of payment, bookkeeping managers will classify balance into the distributor’s specified account, after deducting underwriting fee of debt financing tool;

 

6.1.2 On payment date, the bookkeeping supervisor shall transfer all raised funds of debt financing tools into the account appointed by the issuer.

 

 

6.2 If the lead underwriter undertakes balance underwriting responsibility due to breach or insufficient subscription by other members of underwriting groups, the lead underwriter who doesn’t serve as bookkeeping supervisor shall transfer the corresponding raised funds into the account appointed by the bookkeeping supervisor not later than 14:00 on payment date.  

 

6.3 The issuer and lead underwriter hereby confirm that the lead underwriter’s underwriting obligations and responsibilities are terminated after the bookkeeping supervisor transfers raised fund to the issuer in full amount according to stipulations in Article 6 and the issuer actually receives such raised fund; however, the lead underwriter’s other obligations and responsibilities hereunder are not terminated.

 

6.4 The bookkeeping supervisor shall perform money transfer obligation for the issuer under the condition that the precondition in Article 12 is continuously satisfied before payment.

 

Article Seven: fee and payment

 

7.1 Based on the underwriting service provided by the certain debt financing tool (distributor) under this agreement of lead underwriter, after issuing successfully, the distributor should pay underwriting fee for lead underwriter stipulated amount and payment of this agreement.

 

The calculation mode of underwriting fee is shown as below:

 

 

Underwriting fee = Total face value of current debt financing tools issued x issuance term x annual underwriting rate

 

The annual underwriting rate of debt financing tools hereunder is (please check the item):

 

□Short-term financing bond:      %;

 

□Medium-term note:         %;

 

□Middle and small-sized enterprise collection note:         %;

 

□Super-short-term financing bond:        %;

 

√Directional tool: 0.4%;

 

□Asset-backed note:        %;

 

□Others:      ,     %

 

7.2 The underwriting fee include all underwriting fees paid to lead underwriter, and it is divided into lead underwriting fee and sales commission; the way and proportion of sales commission shall be additionally stipulated by lead underwriter and other members of underwriting group.

 

7.3 Unless otherwise specified in supplemental agreement, the abovementioned underwriting fee shall be paid via following 7.3.1.1 way:

 

7.3.1 One-off payment:

 

7.3.1.1 The bookkeeping supervisor deducts the fee from raised funds on payment date;

 

 

7.3.1.2 The issuer additionally makes one-off payment to bookkeeping supervisor within        

 

working days after the payment date.  

 

7.3.2 Payment on an annual basis:

 

7.3.2.1 The bookkeeping supervisor deducts the underwriting fee (including sales commission) of the 1^st year from raised funds on payment date, and the remaining underwriting fee will be paid within        working days after corresponding date (except for due date of repaying capital with interest) by the issuer in duration of current debt financing tools on an annual basis at average, and the underwriting fee of the 1^st year is      % of total underwriting fee;

 

7.3.2.2 The issuer pays the underwriting fee of the 1^st year to bookkeeping supervisor within    

 

working days after payment date, and the remaining underwriting fee will be paid within        

 

working days after corresponding date (except for due date of repaying capital with interest) by the issuer in duration of current debt financing tools on an annual basis at average, and the underwriting fee of the 1^st year is      % of total underwriting fee;

 

 

7.3.3 Unless otherwise specified in supplemental agreement, in case of existence of Party C, the distribution proportion of lead underwriting fee between Party B and Party C shall be same as the distribution proportion of underwriting limit stipulated in Article 5.2 herein, and the bookkeeping supervisor shall collect full-amount underwriting fee receivable from the issuer. Within  working days after the bookkeeping supervisor receives the underwriting fee receivable, the bookkeeping supervisor shall pay current underwriting fee receivable in full amount to the lead underwriter who doesn’t serve as bookkeeping supervisor.

 

7.4 The fees incurred from accounting, law, and grading required in issuance of debt financing tools as well as trusteeship, redeeming, and other intermediary organs related to debt financing tools, and other fees incurred due to issuance of debt financing tools shall be borne by the issuer who shall directly pay the fees to corresponding institutions.

 

7.5 Within period of validity after the debt financing tools hereunder obtain NAFFII registration, if the issuer gives up issuing all lines of debt financing tools registered at this time or makes no issuing within 2-year validity of registration, the issuer shall only pay issuance consulting fee to the lead underwriter. Unless otherwise specified in supplemental agreement, the issuance consulting fee shall be      % of registration limit of debt financing tools, and the issuer shall pay such fee to the lead underwriter within 5 working days after it gives up all lines or within 5 working days after end of validity of registration. In case of existence of Party C, unless otherwise specified in supplemental agreement, the distribution proportion of abovementioned issuance consulting fee between Party C and Party B shall be same as the distribution proportion of underwriting limit stipulated in Article 5.2 herein.

 

 

7.6 The accounts appointed by parties hereto are shown as below:

 

Party A: Wuhan Kingold Jewelry Co., Ltd.

 

Account name: Wuhan Kingold Jewelry Co., Ltd.

 

Opening bank: Shanghai Pudong Development Bank Wuhang Branch

 

Account No.: [Omitted]

 

People’s Bank of China payment system No.: [Omitted]

 

Party B: Shanghai Pudong Development Bank

 

Account name: Shanghai Pudong Development Bank

 

Opening bank: Shanghai Pudong Development Bank

 

Account No.: [Omitted]

 

People’s Bank of China payment system No.: [Omitted] (has participated in payment system)

 

Party C (if any)

 

Account name:

 

Opening bank:

 

Account No.:

 

 

People’s Bank of China payment system No.:

 

Article Eight information disclosure

 

8.1 The distributor should conduct public information disclosure in line with laws and regulations of Management Method of Non-Financial Business Debt Financing Tool in Interbank Bond Market and related self-discipline normative document of dealers’ association. When lead underwriter assists it to make related information disclosure documents, the distributor should ensure that related documents, materials, data for the lead underwriter are real, accurate and integrated.

 

8.2 The lead underwriter shall have obligation to assist the issuer to disclose issuance documents, and supervise and urge the issuer to perform the obligation of continuous information disclosure. If the information is not timely disclosed according to rules due to the issuer’s reason, the issuer shall bear corresponding responsibility.

 

Article Nine: payment of interest and principal cash

 

9.1 After debt financing tool circulates in related trading market, payment of principal and interest of debt financing tool will be conducted through related registration hosting organization.

 

Article Twelve: Prerequisite

 

 

9.2 The issuer shall timely transfer the relevant capital or interest into the account appointed by the relevant registration and trustee agency in full amount according to relevant agreement signed by and between the issuer and registration and trustee agency as well as relevant rules of relevant transaction places.

 

9.3 The lead underwriter shall have obligation to inform the issuer to transfer interest and capital of debt financing tools on time and in full amount and perform other obligations, and the lead underwriter shall have no obligation to pay for the issuer on any matter of repaying capital with interest.

 

Article 10 Follow-up management of debt financing tools

 

10.1 Within the duration of debt financing tools, the lead underwriter shall continuously carry out tracing, monitoring, investigation, and other follow-up management work on the issuer according to rules stated in laws and relevant self-discipline normative documents of NAFFII so as to timely control the issuer’s risk status and debt-paying ability, and continuously supervise the issuer to perform the obligations of information disclosure and repaying capital with interest, etc. The issuer shall actively coordinate with the lead underwriter on follow-up management work.

 

10.2 Unless otherwise specified in supplemental agreement, the bookkeeping supervisor shall be responsible for taking the lead to carry out follow-up management work.

 

 

Article 11 Statement, guarantee, and promise

 

11.1 The parties hereto are business entities which are established according to Chinese laws, validly exists, and keeps normal operation.

 

11.2 The parties hereto guarantee to follow the laws such as Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools as well as relevant self-discipline normative documents of NAFFII to carry out registration issuance work.

 

11.3 The parties hereto have handled all necessary procedures according to applicable laws and relevant self-discipline normative documents of NAFFII and have obtained all necessary registration and approval; furthermore, the parties hereto have necessary rights under those laws and relevant self-discipline normative documents of NAFFII for convenience of signing this agreement and performing various obligations hereunder.

 

11.4 The parties hereto have adopted all necessary internal behaviors so that they are authorized to sign and perform this agreement; the representatives who sign their signature on this agreement are officially authorized to sign this agreement which have binding force on parties hereto.

 

 

11.5 The matter that the parties hereto sign this agreement and perform their obligation hereunder will not violate any law and relevant self-discipline normative documents of NAFFII, articles of association or internal rules, and any contract or document with binding force on parties.

 

11.6 The parties hereto shall have no on-going or potential litigation, arbitration, government investigation, other legal or administrative procedures which may seriously influence their ability to sign or perform this agreement.

 

11.7 The lead underwriter shall guarantee not to engage in behaviors violating relevant self-discipline normative documents of NAFFII such as Code of Conduct for Underwriting Personnel in Interbank Bond Market Non-financial Business Debt Financing Tools, including but not limited to making promise on range of interest rate, level of interest rate, issuance scale, registration time and other uncertain matters; the issuer shall guarantee that it will not require the lead underwriter to engage in those behaviors.

 

11.8 The parties hereto hereby guarantee that the execution of this agreement will be not affected due to any creditor’s right or debt relationship between the parties hereto and other signing parties or other third party.

 

 

12.1 Lead underwriter assumes the obligation of selling debt financing tool. The following conditions have already been satisfied as the prerequisites before the issue day:

 

12.1.1 The issue of debt financing tool under this agreement conforms to laws and regulations of Management Method of Non-Financial Business Debt Financing Tool in Interbank Bond Market and related self-discipline normative document of dealers’ association, and has already obtained the approval, permission or registration/record of the supervision and dealers’ association, etc., related organizations;

 

12.1.2 The distributor announces information publicly related to debt financing tool under this agreement in accordance with laws and regulations of Information Disclosure Rules of Non-Financial Business Debt Financing Tool in Interbank Bond Market in time, accurately and completely;

 

12.1.3 The distributor and lead underwriter have already signed Confirmation Letter of Interest Rate/Price Range in written form on issuing scale, deadline, interest rate/price range of debt financing tool.

 

 

After the issuer and lead underwriter sign Letter of Confirmation on Interest Range and before the book building starts, if there is exact evidence which shows that there exists serious deviation between bookkeeping range and market and the issuer and the lead underwriter make consensus according to relevant self-discipline normative documents of NAFFII and determine to delay the issuance or adjust interest range, the issuer and the lead underwriter will make consensus in terms of issuance scale, term, interest/price range of debt financing tools and sign Letter of Confirmation on Interest Range in written form.

 

12.1.4 The distributor doesn’t violate any material obligation, any statement, guarantee and commitment of this agreement and issued document; The situations such as major adverse events, breach events, and force majeure stipulated in Article 13, 14, and 15 herein don’t happen.

 

12.1.5 The distributor and related registration hosting organization sign the agreement of related registration, trusteeship and cash.

 

12.1.6 The distributor engages accounting firm, law office and credit rating organization, etc., intermediaries to propose professional advice, which is legal and valid and doesn’t occur any important harmful change;

 

12.1.7 Agreement of credit improvement or related documents (if so) are legal and valid continuously. Moreover, credit improvement scheme doesn’t occur any important harmful change.

 

 

12.1.8 Other conditions (if any) stipulated in Supplemental Agreement by parties hereto.

 

12.2 Before the above prerequisite conditions are fully satisfied, any decision made by the lead underwriter and any action adopted by lead underwriter shall be not deemed as the situation that the lead underwriter undertakes the obligation of selling debt financing tools hereunder.

 

12.3 The lead underwriter shall have right to give up above one ore more prerequisite conditions to be applicable to current debt financing tools; if many parties serve as lead underwriter, the above behavior of giving up prerequisite condition shall be made via consensus by lead underwriters.

 

Article 13 Major adverse events

 

13.1 In case of policy adjustment which may cause major influence on issuance of current debt financing tools before starting of book building, the issuer and lead underwriter may temporarily postpone the issuance of debt financing tools or adjust bookkeeping interest range via consensus.  

 

13.2 If the following situations happen in lead underwriter and the substantial adverse influence may be caused to smoothly underwrite debt financing tools, the lead underwriter shall notice the issuer immediately. The issuer shall have right to temporarily suspend or stop issuance, and adopt measures according to rules stated in laws and relevant self-discipline normative documents of NAFFII as well as issuance documents of debt financing tools:

 

 

13.2.1 Great changes happen in lead underwriter’s operation state;

 

13.2.2 Changes happen in lead underwriter’s underwriting qualification;

 

13.2.3 The breach that the lead underwriter fails to pay off due debt happens;

 

13.2.4 The lead underwriter makes decisions of reducing capital, merger, separation, dissolution and applying for bankruptcy;

 

13.2.5 The lead underwriter is involved in major litigation, arbitration or suffers major administrative penalty;

 

13.2.6 The directors, supervisors, and senior management personnel on lead underwriting party are involved in major civil or criminal action, or have accepted the investigation of relevant department due to major economic events;

 

13.2.7 Other situations which may cause major adverse influence on lead underwriter’s smoothly underwriting debt financing tools.

 

13.3 If the following situations happen in the issuer and the substantial adverse influence may be caused on issuance or repaying debt financing tools, the issuer shall immediately notify the lead underwriter. The lead underwriter shall have right to temporarily postpone or stop issuance matter, and adopt measures according to rules stated in laws and relevant self-discipline normative documents of NAFFII as well as issuance documents of debt financing tools:

 

 

13.3.1 Great changes happen in issuer’s name, operation policy, and operation scope;

 

13.3.2 Great changes happen in issuer’s external condition of production and operation;

 

13.3.3 The issuer is involved in major contract which may cause major influence on its assets, debt, rights and interests, and operation result;

 

13.3.4 The situations such as pledge of assets, mortgage, sales, transfer, alteration or abandonment which may influence the issuer’s debt-paying ability happen;

 

13.3.5 The breach situation that the issuer fails to pay off due major debt happens in the issuer;

 

13.3.6 The large-amount compensation responsibility happens in the issuer or the issuer’s normal production and operation are affected due to compensation responsibility, and such influence is hard to be eliminated;

 

13.3.7 The major loss which is more than 10% of net assets happens in the issuer;

 

 

13.3.8 The issuer discharges other’s debt at a time which exceeds certain amount, and such behavior may influence the issuer’s debt-paying ability;

 

13.3.9 The change happens in more than 1/3 directors, more than 2/3 supervisors, chairman or general manager on the issuer; the chairman or general manager fails to perform responsibility;

 

13.3.10 The issuer makes the decisions of reducing capital, merger, separation, dissolution and applying for bankruptcy, or enters into bankruptcy procedure according to law, is ordered to close down;

 

13.3.11 The issuer is involved in market rumor for which it shall make some explanation;

 

13.3.12 The issuer is involved in major litigation and arbitration matters;

 

13.3.13 The issuer is investigated by organ of power due to being suspected of being involved in violating laws and rules, or suffers criminal penalty and major administrative penalty; the directors, supervisors, and senior management personnel at the issuer are suspected of being involved in violating laws and disciplines, and they are investigated by organ of power or the coercive measures are adopted for them;

 

13.3.14 The situations such as seizure, attachment or freezing of assets which may influence the issuer’s debt-paying ability; the issuer’s main or all business enter into a standstill, which may affect the issuer’s debt-paying ability;

 

 

13.3.15 The issuer provides major external guarantee.

 

13.3.16 Other matters which cause major influence on investors’ investment decisions.

 

Article Fourteen: event of default and responsibility for breach of contract

 

14.1 Issuer’s events of default and responsibilities for breach of contract:

 

14.1.1 If the distributor can’t pay account payable for lead underwriter in line with the appointment of this agreement, the distributor should pay payment of liquidated damage for lead underwriter on non-payment item; Liquidated damages should start from the day of default and count in five over ten thousand per day of non-payment item, until the day of paying off actually.

 

14.1.2 If the issuer violates the rules stated in laws such as Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools and relevant self-discipline normative documents of NAFFII, including but not limited to the obligation of information disclosure, the issuer shall compensate the actual loss caused to the lead underwriter.

 

 

14.1.3 If the issuer violates its statement, guarantee, and promise made herein, or fails to perform other obligations except for the obligations involved in above Article 14.1.1 and 14.1.2, which results in the situation that the lead underwriter suffers loss, the issuer shall compensate the lead underwriter’s actual loss.

 

14.1.4 If the issuer has events of default mentioned in above Article 14.1.1, 14.1.2 or 14.1.3, the lead underwriter shall have right to temporarily postpone performing or terminating partial or all underwriting obligations for debt financing tools whose issuance is not completed hereunder.

 

14.2 Event of default and responsibility for breach of contract of lead underwriter:

 

14.2.1 If lead underwriter can’t pay fund-raising for the distributor in line with the appointment of this agreement, lead underwriter should pay late fees for the distributor on non-payment item; Late fees should start from the day of default and count in five over ten thousand per day of non-payment item, until the day of paying off actually.

 

14.2.2 If the lead underwriter violates the rules stated in laws such as Management Method for Interbank Bond Market Non-financial Business Debt Financing Tools and relevant self-discipline normative documents of NAFFII, the lead underwriter shall compensate the actual loss caused to the issuer.

 

 

14.2.3 If the lead underwriter violates its statement, guarantee, and promise made herein, or fails to perform other obligations except for the obligations involved in above Article 14.2.1 and 14.2.2, which results in the situation that the issuer suffers loss, the lead underwriter shall compensate the issuer’s actual loss.

 

14.2.4 If the lead underwriter has events of default mentioned in above Article 14.2.1, 14.2.2 or 14.2.3, the issuer shall have right to terminate the appointment on lead underwriter in terms of debt financing tools whose issuance is not completed hereunder.

 

14.2.5 Each lead underwriter’s obligations hereunder are independent, and either lead underwriter will not bear any joint liability for any actual loss caused by other lead underwriter’s breach, actions, or suggestions.

 

Article 15 Force majeure

 

15.1 The force majeure mentioned herein refers to objective events which the parties hereto can’t predict, avoid or overcome, and which cause substantial adverse influence on the parties hereto performing this agreement, including but not limited to natural disasters, war, great changes in Chinese laws, and other events.

 

15.2 The occurrence of above force majeure situations doesn’t certainly constitutes exemptions hereunder. In case of force majeure after the parties delay to perform the obligations stipulated hereunder, the liabilities can’t be exempted.

 

 

15.3 Either party which announces occurrence of force majeure shall immediately notify other parties involved herein in writing, and provide the sufficient evidence which proves occurrence and continuing of force majeure event within 15 days after notification.

 

15.4 Either party which suffers the influence of force majeure event may temporarily postpone performing the obligations hereunder until the influence is eliminated; however, such party shall timely adopt measures to avoid continuous expansion of loss caused by this influence; otherwise such party shall undertake corresponding compensation responsibility for other parties involved herein on expanded loss.

 

15.5 If the influence of force majeure event continues for more than 60 days and no agreement is reached by both parties via consensus in terms of solution, either party shall have right to send a written notice (“Notice of Termination”) to the other party so as to terminate the application of this agreement to issuance of current debt financing tools affected by force majeure.

 

 

Article 16 Confidentiality

 

16.1 While either party obtains other party’s data about relevant business, financial status, and other non-public data (including written data and non-written data, hereinafter referred to as “confidential data”) due to issuance and underwriting work, unless otherwise specified in relevant agreement, such party which receives above confidential data shall be confidential to the data and shall not disclose above confidential data to any one or institution except for such party’s staff who need to know above confidential data due to their work duty.

 

16.2 The rule in above Article 16.1 is not applicable to following confidential data:

 

16.2.1 The data for which there is written record which can prove that such data has been known by receiving party before issuance and underwriting work.

 

16.2.2 The data which has been disclosed not due to the reason that the receiving party violates this agreement.

 

16.2.3 The data obtained by receiving party from a third party who bears no confidential obligation to confidential data.

 

16.3 Either party shall ensure that the party itself, directors, supervisors, and senior management personnel related to issuance of debt financing tools, and other staff related to issuance of debt financing tools shall also abide by confidential obligation mentioned in this Article.

 

 

16.4 The receiving party shall have right to disclose confidential data to its related party, member of underwriting group, intermediary organ, and each party’s staff and consultant for the purpose of issuance of debt financing tools; however, under such condition, the receiving party shall be only able to disclose the data to people or institutions with demand of reasonable business, and require the above parties to abide by this confidential term.

 

16.5 Either party shall have right to disclose the data to relevant government department or relevant institutions according to laws and relevant self-discipline normative documents of NAFFII as well as requirements of organ of power. However, under the condition of not violating laws, rules, and relevant self-discipline normative documents of NAFFII, the party which is required to make above disclosure shall notify this requirement to other parties before above disclosure.

 

16.6 The rules in this Article shall not hinder either party to make disclosure according to laws and relevant self-discipline normative documents of NAFFII based on its honest judgment.

 

16.7 This rule is not applicable to the disclosure made under the condition that the parties hereto make written approval in advance.

 

Article 17 Transfer

 

17.1 Without the written consent of all parties in advance, any party of this agreement should not transfer its rights or obligations in this agreement.

 

 

Article 18 No waiver

 

18.1 Not executing, delaying to execute, or partially executing any right hereunder shall be not deemed as waiving the right.

 

Article 19 Way of notification and its effectiveness

 

19.1 Unless otherwise specified herein, any notice made by either party to the other party shall be made in written form and in Chinese and be sent to relevant address listed herein via personal delivery or express delivery, registered post, fax, and electronic information system, etc.

 

19.1.1 In case of personal delivery or express delivery, the delivery will take effect on signing date of delivering receipt; however, if the receiving party, receiving party’s agent or the person who executes the privilege of bankruptcy administrator to the receiving party refuse to sign for the delivering receipt, the sending party may adopt notarial delivery, or make effective notification according to notice delivery or retention delivery stipulated by parties in supplemental agreement, and the notice which takes effect via notarial delivery, notice delivery or retention delivery shall be deemed as having same effect as the notice which takes effect according to original delivery way in terms of all aspects.

 

19.1.2 In case of delivery via registered post, the delivery will take effect on signing date.

 

 

19.1.3 In case of delivery via fax, the delivery will take effect after the receiving party confirms that it has received fax with clear writing.

 

19.1.4 In case of delivery via electronic information system, the delivery will take effect on the day when the notice enters into the system which the receiving party appoints to receive electronic information.

 

19.1.5 In case of other forms, the delivery will take effect on the time additionally stipulated by parties hereto.

 

19.2 If the above date is not working day or the notice is delivered, received, or enters into relevant system after end of business hour of one working day, such notice shall be deemed as taking effect in next working day after such day.

 

19.3 If the change happens in either party’s above mailing address or contact information, such party shall immediately notify the other party according to the method stipulated herein. The mailing address or contact information after change shall take effect after the other party receives the notice of change.

 

19.4 The contact information of parties hereto is shown as below:

 

Party A: Wuhan Kingold Jewelry Co., Ltd.

 

 

Mailing address: No.15, Huangpu Technology Park, Jiang’an District, Wuhan City

 

Contact person: Hu Qiao

 

Telephone number: 027-65694977

 

Fax: 027-65694977

 

Postal code: 430023

 

E-mail:[email protected]

 

Party B: Shanghai Pudong Development Bank

 

Mailing address: 15F, Dongyin Building, No.689, East Beijing Road, Shanghai City

 

Contact person: Zhang Wei

 

Telephone number: 021-61616488

 

Fax: 021-63604215

 

Postal code: 200001

 

E-mail:[email protected]

 

Party C (if any)

 

Mailing address:

 

Contact person:

 

Telephone number:

 

Fax:

 

Postal code:

 

E-mail:

 

 

Article Twenty: Signature and come into effect of this agreement

 

20.1 This agreement will come into effect, after legal representative or authorized signatory of all parties sign and seal or special seal for contractual uses. All parties of this agreement can sign supplement agreement as needed. Before this, all parties should regard this agreement as the standard, if any commitment, understanding, arrangement or appointment is inconsistent with this agreement in the aspect of issuing debt financing tool.

 

20.2 The parties hereto shall consciously abide by this agreement after they sign Underwriting Agreement and Supplemental Agreement.

 

20.3 The lead underwriter shall timely submit Underwriting Agreement and Supplemental Agreement (and its modification) to NAFFII for future reference according to requirements of laws and relevant self-discipline normative documents of NAFFII.

 

Article 21 Modification of agreement

 

21.1 Under the condition of not violating Chinese laws, the parties hereto may carry out special stipulations for relevant terms of underwriting agreement or carry out supplementary stipulations for matters not mentioned in underwriting agreement in supplemental agreement, but they shall not modify or exclude following content mentioned in underwriting agreement:

 

 

21.1.1 Definition of “Chinese laws/laws” in Article 1.19;

 

21.1.2 Article 2 “Agreement composition and effective grade”;

 

21.1.3 Article 11 “Statement, guarantee, and promise”;

 

21.1.4 Article 20 “Signing of agreement and effectiveness”;

 

21.1.5 Article 21; and

 

21.1.6 Article 23.1, 23.4, and 23.5.

 

Article 22 Rescission and termination of agreement

 

22.1 Unless otherwise specified herein, either party shall not unilaterally terminate this agreement after this agreement takes effect.

 

22.2 If it fails to realize the purpose of this agreement due to major adverse events, events of default, and force majeure listed in Article 13, 14, and 15 herein on the issuer, the lead underwriter shall have right to send a written notice to the issuer to terminate this agreement.

 

22.3 If it fails to realize the purpose of this agreement due to major adverse events, events of default, and force majeure listed in Article 13, 14, and 15 herein on the lead underwriter, the issuer shall have right to send a written notice to the lead underwriter to terminate this agreement.

 

 

22.4 While this agreement is terminated due to rescission, all or partial rights and obligations of the parties hereto will be immediately terminated; however, such termination will neither affect any right formed nor affect the responsibilities which the parties hereto shall bear due to statement, guarantee, and promise they have made, including but not limited to follow-up obligation for the issued debt financing tools and payment obligation for relevant fee.

 

22.5 Unless otherwise specified herein, this agreement will terminate since all debt financing tools issued in different period hereunder are redeemed.

 

Article Twenty-three: Law application and dispute resolution

 

23.1 This agreement applies to Chinese law and is explained in line with Chinese law.

 

23.2 The parties hereto may solve any dispute or claim occurred herein or related hereto through negotiation.

 

23.3 If the parties hereto make no agreement or no agreement is reached via negotiation, the parties hereto shall agree to submit the dispute or claim to China International Economic and Trade Arbitration Commission (CIETAC) which will solve the dispute or claim via arbitration in Beijing according to Arbitration Rules of China International Economic and Trade Arbitration Commission. The arbitration court consists of 3 arbitrators, and the arbitration award is final and it has binding force on parties hereto.

 

 

23.4 If the parties hereto additionally stipulate to solve the dispute via other arbitration institution, such arbitration institution shall be the arbitration institution legally registered or established in the People’s Republic of China (not including Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region for the sake of this agreement), and the place of arbitration shall be also in the People’s Republic of China (not including Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region for the sake of this agreement).

 

23.5 If the parties hereto additionally stipulate to not adopt arbitration, but adopt litigation to solve the dispute, either party may file a lawsuit to people’s court.

 

23.6 The arbitration or litigation made for any contentious clause hereof shall not influence the effectiveness and continuous performance of other clauses hereof.

 

Article 24 Supplementary articles

 

24.1 Unless otherwise specified:

 

24.1.1 If this agreement is mentioned, the modification or supplementary documents to this agreement shall be also included;

 

 

24.1.2 The articles, clauses and annexes mentioned shall be articles, clauses and annexes hereto;

 

24.1.3 The name, table of contents of this agreement and titles listed in this agreement are only for convenience of reference, and they don’t influence the structure of this agreement and they are not used to explain any content of this agreement.

 

24.2 The original of this agreement is made in sextuplicate, one is submitted to NAFFII for future reference, and other copies are held by signing parties. Each copy has same legal effect.

 

 

(This page is signing page of Wuhan Kingold Co., Ltd. for Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools)

 

Party A/Issuer: (common seal)

 

Affixed with the seal of Wuhan Kingold Co., Ltd.

 

Legal representative or authorized representative (signature):

 

Signing time: August 12, 2014

 

 

(This page is signing page of Shanghai Pudong Development Bank for Underwriting Agreement for Interbank Bond Market Non-financial Business Debt Financing Tools)

 

Party B/Lead underwriter: Shanghai Pudong Development Bank (common seal)

 

Affixed with the seal special for bond underwriting business of Shanghai Pudong Development Bank

 

Legal representative or authorized representative (signature):

 

Signing time: August 12, 2014

 

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