BANK OF COMMUNICATIONS LOAN CONTRACT
(For Medium or Short Term Working Capital Loan)
Loan No.: Wei Jiao Yin 2001 Loan 6-031
Borrower: Weifang Fuhua Amusement Park Co., Ltd.
Address: East End of Dong Feng East Street, Weifang City
Legal representative: Jie Yang
Lender: Weifang Branch of the Bank of Communications
Address: 358 Dong Feng East Street
According to applicable laws and regulations of the People's Republic of China
(the "PRC"), the Borrower and Lender, after reaching an agreement through
negotiations, hereby enter into this contract pursuant to Borrower's application
to Lender for a working capital loan (the "Loan")
Article 1. The Loan
1.1. Type of currency: RMB
1.2. Loan amount (full-form characters): Four hundred and fifty thousand yuan
exactly. The actual principal borrowed by Borrower shall be the number
written on the financial voucher issued by Lender.
1.3. Loan term: July 24, 2001 to June 20, 2002
1.4. The Loan under this Loan Contract shall be solely for industrial/business
use. Borrower shall not divert the funds under this Loan Contract to any
other purpose.
Article 2. Interest Rate and Interest Calculation
2.1. Interest rate: 5.3625%, based on 30 days in a month and 360 days in a
year.
2.2. During the term of this Loan Contract, interest may be changed as
prescribed by the People's Bank of China when said Bank adjusts its
interest rate or rate calculation method, in which case Borrower's
approval is not necessary.
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2.3. The formula for calculating the interest is as follows: Interest on the
loan = (the prescribed interest rate under this Loan Contract) x (Loan
amount) x (actual days of use), where actual days of use is calculated
from the day the Loan is issued.
2.4. Settlement of interest under this Loan Contract is to be calculated per
month. The settlement date is the 20th day of each month. All principal
and interest shall be paid in full on the day the term of the Loan
expires.
Article 3. Release of funds under the Loan
3.1. Borrower may apply for release of funds under the Loan Contract, at one
time or at different times, within the fixed period, under Article 1.3
hereof. However, each time Borrower must make the application to Lender at
least 3 banking days in advance.
3.2. Lender shall have the right to examine the following issues before
releasing funds under the Loan and shall decide whether to release funds
based on results of the examination:
(1) whether Borrower has performed all legally-required procedures
such as obtaining government licenses, approvals and registration
and other procedures Lender may require of Borrower;
(2) Whether a related guaranty contract is currently in effect.
3.3. Lender shall release funds at one time or at different times to Borrower
according to the Loan Voucher; and
3.4. The funds release date and amount shall be as recorded in the Loan
Voucher.
Article 4. Repayment of the Loan:
4.1. The date of repayment of principal under this Loan Contract shall be as
recorded in the Loan Voucher;
4.2. Borrower shall repay the principal and interest under this Loan Contract
in full on the due date.
4.3. ***Borrower hereby irrevocably authorizes Lender, on the Lender's own
initiative, to withdraw funds from Borrower's deposit account with the
Bank of Communications.
4.4. Borrower shall repay principal and interest in the currency provided in
Article 1.1 above.
4.5. ***Borrower may repay the Loan in advance upon approval from Lender.
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Lender has the right to collect the interest for the period between the
date of the prepayment and the date of repayment recorded in the Loan Voucher at
the rate specified in this Loan Contract.
Article 5. ***Borrower's Declaration and Warranties
5.1. Borrower accepts and shall abide by Lender's business system, operational
practices, and the procedures under this Loan Contract.
5.2. Borrower warrants that it will cooperate with Lender on the supervision
and inspection of the use of the funds borrowed under this Loan Contract
and of the business condition of Borrower and that it will promptly
provide all financial statements and related materials needed by Lender,
which Borrower warrants to be true, complete and accurate.
5.3. Borrower warrants that it will issue written notices to Lender upon
occurrence or possible occurrence of the following events within seven
days thereof:
(1) Borrower's operational system or organizational form of property
ownership is changed materially, including, but not limited to,
introducing the practice of contracting, conducting leasing operations,
entering into joint operations, restructuring equity, merging with
(acquiring) other entities, entering into a joint venture (cooperative
arrangement), splitting into separate entities, setting up a subsidiary,
transferring title to property, reducing capital, termination or
dissolution and filing for bankruptcy;
(2) Borrower amends it articles of association, replaces its legal
representative, reduces its registered capital or makes material changes
in its finances or personnel;
(3) Borrower sells, leases, transfers or otherwise disposes of all or part
of its assets;
(4) Borrower provides a guaranty to a third party, which will have a
material adverse effect on its financial position or its ability to
perform its obligations under this Loan Contract;
(5) Borrower is a party to a material legal suit or its main assets have
been put under property preservation or other orders;
(6) The financial position of Borrower has undergone a material change or
the value of collateral has been markedly reduced; and
(7) Borrower experiences other matters which will produce a material adverse
effect on its financial position or ability to repay its debt.
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Article 6. Other Contractual Items:
6.1. Upon agreement by both parties, this Loan Contract will become effective
upon the affixing of the official Loan seal after authorization from the
Lender's legal representative.
Article 7. *** Events of Default
7.1. Any of the following events shall be considered a default under this
Article:
(1) Borrower misappropriates loan funds;
(2) Borrower is delinquent in its repayment of the principal or interest;
(3) Borrower or guarantor refuses normal financial or operational
supervision by Lender, or Borrower or guarantor provides false financial
statements or asset appraisal reports;
(4) Borrower or guarantor is involved in illegal activities;
(5) The legal representative or primary management personnel of Borrower or
guarantor is involved in a criminal case; or
(6) Borrower experiences any of the events requiring notification listed in
Article 5.3, and such event affects Borrower's ability to repay debt.
7.2. In the event of events of default, Lender has the right to take the
following steps:
(1) Stop providing loan funds that Borrower has not yet used;
(2) Unilaterally declare all principal already lent under the Loan Contract
to be due ahead of the contract due date and require Borrower
immediately to return the principal and pay all interest due; and
(3) Take other remedies as provided by applicable laws and regulations.
Article 8. Default Liability:
8.1. Lender will impose penalty interest and compounded interest according to
the regulations of the People's Bank of China in the event that Borrower
has not fully repaid the principal or interest under the Loan Contract in
a timely manner, or fails to use the Loan's funds as provided by this Loan
Contract. The default interest rate for a foreign exchange loan shall be
_____ over and above the original interest rate.
8.2. ***For the recovery of the principal, interest, penalty interest,
compounded interest and other fees unpaid by Borrower, Borrower hereby
irrevocably authorizes Lender to withdraw funds from its account with the
Bank of Communications.
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Article 9. Other Clauses:
9.1. ***Any dispute concerning this Loan Contract is under the jurisdiction of
the local people's court where Lender is located.
9.2. The Loan Voucher under this Loan Contract and related documents and
materials confirmed by both parties are inseparable components of this
Loan Contract.
9.3. This Loan Contract shall become effective upon signature (or seal) by
legal representatives or authorized representatives of both parties and
upon the affixing of the official seals of both parties.
9.4. This Loan Contract has two originals, which are identical to each other,
with each of the parties holding one copy. There are several duplicates
for future reference.
Borrower (Official Seal): (Illegible)
Legal Representative or Authorized Representative
(Signature or Personal Seal): (Illegible)
Date of Signature: 24 July 2001.
Lender (Official Seal): Weifang Branch of the Bank of Communications, Loan
Contract
Seal (6)
Legal Representative or Authorized Representative
(Signature or Personal Seal): Shixiang Ma
Date of Signature: July 24, 2001.
