First Financial Holding Co., Ltd. FCB LEASING CO., LTD.

Notification of Approved Loan

To: Kid Castle Internet Technologies Ltd.
TEL:(02)2218-5996
Attn: Financial Dept. - Assistant Manager Huang
FAX:(02)2218-9984
From: FCB LEASING Sales Dept. - Cheng-I Huang
TEL:(02)3343-7074
   

The Bank is pleased to inform you that your applied installment loans are
approved by the Board of the BANK and the terms and conditions for the
installment loans approved are set as follows:

1.
The borrower: Kid Castle Internet Technologies Ltd.

2.
Approved loan amount: NTD20,000,000

3.
Term of loan: 18 months

4.
Interest rate: 5%

5.
Handling charge: 1.5%

6.
Guarantor: Board Chairman - Kuo-An Wang, Vice-President - Yu-En Chiu

7.
Other conditions: 1. loan deposit :NTD4,000,000 (interest-free, paid in full
when installment loans are due)

2.
levy 20% of the remaining installment loan amount of the third party check as a
provisional collateral in financing (the third party check should be due within
360 days together with service agreement and invoice(s) provided)

3.
board meeting minutes of Kid Castle Internet Technologies Ltd. should be
provided

8.
Method of payment: on a monthly basis, the respective amounts of the loan
installments are as follows (by promissory note):

Term
Installment $
Term
Installment $
Term
Installment $
1st
1,155,650
7th 
1,155,650
13th 
1,155,650
2nd
1,155,650
8th 
1,155,650
14th 
1,155,650
3rd
1,155,650
9th 
1,155,650
15th 
1,155,650
4th
1,155,650
10th 
1,155,650
16th 
1,155,650
5th
1,155,650
11th 
1,155,650
17th 
1,155,650
6th
1,155,650
12th 
1,155,650
18th 
1,155,650
Total
20,801,700
Handling Charge 1.5% (exclusive of tax)
300,000

※The above installment cheques should be negotiable and endorsed.
 
 
1

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9.  Invoice title:  FCB LEASING CO., LTD.
Address:  6F, 94, Sec. 2, Zhongxiao E. Road, Taipei
No.:  16447816
10.
Others:

 
(1)
Loan deposit, tax, and handling charge (incl. tax) shall be directly deducted
upon loan allotment.

 
(2)
Loan allotment date: 2-3 working days after the completion of borrower
verification procedures.

International Bank of Taipei, Jingmei Corporate Banking Center
Date: Jan. 28, 2005

Agreement
 
This Agreement is made by and between FCB LEASING CO., LTD. (Party A) and Kid
Castle Internet Technologies Ltd. (Party B).

Whereas, Party B conducts commerce business by installments with Party A
(detailed on the Sales and Purchase Agreement no. 013506003); now therefore,
both parties hereto agreed and hereby do covenant and agree with each other the
following terms and conditions regarding performance security for the
aforementioned Agreement:

1.
In addition that Party B shall perform the liabilities of the aforementioned
Agreement, Party B agrees to provide NTD4,000,000 for Party A as the performance
security for the Agreement.

2.
In accordance with the aforementioned Agreement signed between both parties on
Jun. 9, 2005, Party B agrees that Party A provides NTD4,000,000 from the
commerce amount as the performance security for Party A to perform the
liabilities of the aforementioned Agreement; where the performance security is
interest-free to Party B.

3.
In case Party B violates the provisions of the aforementioned Agreement, Party B
agrees that the performance security of the aforementioned Agreement may be
expropriated by Party A and should not be used to offset the payments payable of
respective installments.

 
 
2

--------------------------------------------------------------------------------

 
 
4.
Party B does not agree that Party A repays the payment beforehand.

5.
This Agreement shall be made in two copies, each of which shall be kept by each
party for record. In the event any disputes arising from the explanation and
execution of the Agreement and may bring in a lawsuit case, all parties agree
that case shall be subject to the jurisdiction of the Taiwan Taipei District
Court for the first trial of such lawsuit.

Party A: FCB LEASING CO., LTD.
Legal/Authorized Representative: Zhe-San Tsai

Party B: Kid Castle Internet Technologies Ltd.
Legal/Authorized Representative: Kuo-An Wang

Date : Jun. 9, 2005

Sales and Purchase Agreement
Clerk
 

 
This Agreement is made by and between FCB LEASING CO., LTD. (Party A) and Kid
Castle Internet Technologies Ltd. (Party B); in view of the commerce business
Party A purchases from Party B, both parties hereto agreed and hereby do
covenant and agree with each other the following terms and conditions:

1.
Object, specification, and quantity:

Object
Brand & Specification
Unit & Quantity
A batch of textbooks (as shown below)

2.
The total amount: NTD20,000,000 (exclusive of tax)

3.
Place of delivery: the right of said object(s) shall belong to Party A effective
from the date of signing of this Agreement, but the object(s) shall be safe kept
by Party B or from Party B to a third party who is designated by Party A; the
payments of installation and delivery shall be liable to Party B.

 
 
3

--------------------------------------------------------------------------------

 
 
4.
Method of payment: after the right of the object(s) are transferred to Party A,
Party A shall pay the payments for goods to Party B or a third party who is
designated by Party B.

5.
In case there is any defect, bad design, or manufacturing on the object(s)
within three years of the product sales and purchase so as to reduce the normal
or expected effect, or the object(s) fail to perform, Party B agrees to repair
the object(s) at his cost without objection.

6.
Party B guarantees that the object(s) have not been mortgaged or entrusted to a
third party or as conditional sale products or there is no any other disposition
of the object(s) or any involvement of the object(s) in other debts; or
otherwise Party B shall be liable for all related civil or criminal
responsibilities.

7.
In case that any provision of the second paragraph, Item 1, Article 185 of the
Company Law happens to the object(s), Party B promises that the object(s) shall
be sold to Party A upon the resolution made by a large majority vote
representing two-thirds of the attending shareholders who represent a majority
of the total number of issued shares (or the two-thirds vote representing of a
large majority attending shareholders of a publicly stock issuing company who
represent a majority of the total number of issued shares).

8.
This Agreement shall be made in two copies and effective upon the signing of
this Agreement between both parties; each of the Agreement copy shall be kept by
each party for record.

9.
In the event any disputes arising from the explanation and execution of the
Agreement and may bring in a lawsuit case, all parties agree that case shall be
subject to the jurisdiction of the Taiwan Taipei District Court for the first
trial of such lawsuit.

Party A : FCB LEASING CO., LTD.
Legal/Authorized Representative: Zhe-San Tsai

Party B : Kid Castle Internet Technologies Ltd.
Legal/Authorized Representative: Kuo-An Wang

Date : Jun. 9, 2005

Serial No.
Object Item
Quantity
Unit
110130010011
Textbook - New Magic Land 1
16540
Book
110199030066
Textbook - Magazine Vol. 66
3520
Book
110199030067
Textbook - Magazine Vol. 67
4396
Book

 
 
4

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110230010011
Supplementary Material - New Magic Land 1
436174
Book
110862011
Textbook - English Now 4
9819
Book
111006011
Textbook - Big Steps(6)
1645
Book
111112011
Textbook - Way To Go (12)
1224
Book
111113011
Textbook - Way To Go (13)
1700
Book
112707011
Textbook - Magic Land 7
7180
Book
120851012
Supplementary Material - English Now 1 (standard version) Workbook (version 93)
7121
Book
122701012
Supplementary Material - Magic Land 1 (revised version)
4915
Book
132424011
Teaching plan - Come With Me (practice notebook)
2700
Book
132705011
Teaching plan - Magic Land 5 teacher’s manual
2658
Book
142400011
Teaching product - Come With Me Learning Recorder
37451
Book
160012011
Test - General English Proficiency Test (GEPT) I test C
2880
Book
2101085201
Flash Card - English Now 2 Vocabulary (big)
2883
Pack
2101086101
Flash Card - English Now 2 Conversation & Pronunciations (big)
1113
Pack
2101242301
Flash Card - Come With Me/for Teacher (yellow)
2622
Pack
2101243501
Flash Card - Come With Me/for Teacher (blue)
1447
Pack
2102242401
Flash Card - Come With Me (green)/54 pieces
3994
Pack
2102243601
Flash Card - Come With Me (purple)/65 pieces
5383
Pack
330303013
CD interaction - Wonderland(yellow)/paperback version
2131
Disc
330305013
CD interaction - Wonderland(blue)/paperback version
2787
Disc
91291110001001
Textbook - Read It Now Red (1 book 1AVCD)
11830
Pack
91292310001001
Textbook - Read It Now Yellow (1 book 1AVCD)
11315
Pack
91293510001001
Textbook - Read It Now Blue (1 book 1AVCD)
10921
Pack
110111140111
WAY TO GO(14)- Grammar & Conversation
1885
Book
91040000000001
Kids Speak Main Course Series- Direct Sale
628
Pack
91050000000001
Diverse Intelligence Main Course Series - Direct Sale
780
Pack
91090000000001
Kids Talk Story Series - Direct Sale
422
Pack
920302002
Teaching Aids - Wonderland Orange Teacher’s Wall Chart set (for preliminary
school students)
686
Pack
91000000000047
Textbook - Tomei series 2-2 - Direct Sale (Model test)
437
Pack
       

 
5

--------------------------------------------------------------------------------

 

Sales and Purchase Agreement by Installments
Contract No.: 013506003
Seal(s)
checked by
Guarantor
Verified by
   

 
This Agreement is made by and between FCB LEASING CO., LTD. (Party A) and Kid
Castle Internet Technologies Ltd. (Party B); in view of the commerce business
Party A purchases from Party B of the following :
Object
Brand & Specification
Unit & Quantity
A batch of textbooks (as shown below in details)
   

Both parties hereto agreed and hereby do covenant and agree with each other the
following terms and conditions:
1.
Method of payment :

 
1)
Party B purchase the aforementioned object(s) from Party A and the total amount
is NTD20,000,000 (exclusive of tax).

 
2)
The payment amount should be paid to Party A as follows (exclusive of tax) :

Payment Date
Amount (NTD)
7/13/2005
1,155,650
8/13/2005
1,155,650
9/13/2005
1,155,650
10/13/2005
1,155,650
11/13/2005
1,155,650
12/13/2005
1,155,650
1/13/2006
1,155,650
2/13/2006
1,155,650
3/13/2006
1,155,650
4/13/2006
1,155,650
5/13/2006
1,155,650
6/13/2006
1,155,650
7/13/2006
1,155,650
8/13/2006
1,155,650
9/13/2006
1,155,650
10/13/2006
1,155,650
11/13/2006
1,155,650
12/13/2006
1,155,650

 
 
6

--------------------------------------------------------------------------------

 
 
 

 
3)
Upon signing this Agreement, Party B shall give respective post-dated cheques
with payment dates and amounts as shown above to Party A. Party A has the
ownership of the object(s) prior to the full repayment of the payments for
goods.

2.
Delivery & acceptance: Party B shall be liable for any risk of the object(s)
after Party B signs for the delivery of said object(s) with acceptance, and
Party B shall not refuse to or delay the payments for goods or return the
object(s) to Party A with any excuse. In case the object(s) are levied by the
government, the compensation shall be received by Party A.

3.
Use & safekeeping of the object(s):

 
1)
Location : Taiwan

 
2)
Party B shall place the object(s) on locations designated by Party A. Except for
normal application of the teaching materials, the object(s) shall not be
hypothecated, mortgaged or disposed during the Agreement period without the
consent from Party A in writing.

 
3)
Party B should act as a good administrator to safe keep and use the object(s) in
good condition; all repair costs shall be liable to Party B, including fittings,
tools and/or services associated with the object(s). Party B shall have
qualified personnel to implement required repair and maintenance work.

 
4)
Party A may dispatch an experienced staff to the locations of storing the
object(s) for checking the conditions of the object(s) and Party B shall not
reject with any excuse and shall assist Party A in such checking work.

4.
Defect warranty liability: Party A has given the convenience to Party B for
purchasing the object(s) by installments, and Party B fully understands that
Party A is merely a seller of the object(s), not a manufacturer, Party B agrees
to unconditionally forsake any right to claim defect of the object(s) from Party
A. In case there is any manufacturing defect on the object(s), Party B agrees to
directly go to the manufacturer for the repair of the object(s) and Party A
shall not be responsible for such matters.

5.
Insurance: Party B shall insure the object(s) under relevant insurance coverage
at his own costs, where the insurance company and insured accident categories
shall be decided by Party A, who shall be the beneficiary. In addition, the
insurance policy and the receipt of insurance premium shall be kept by Party A,
Party B is responsible for the insurance policy renewal prior to the expiration
of existing insurance period. Party A may pay for the insurance premium and
necessary payments associated with the insurance policy renewal in advance and
Party B shall reimburse all the aforementioned payment amount to Party A without
any delay, or Party A may add the insurance premium and necessary payments
associated with the insurance policy renewal that Party A has paid on behalf of
Party B into the debt Party B owes to Party A. In case the insurance company
delays or refuses to pay the compensation by any reason, Party B shall not
reject or delay the repayment of the payments for goods to Party A.

 
 
7

--------------------------------------------------------------------------------

 
 
6.
Party B shall provide the Company Tax Assessment of January, April, July, and
November of each year for Party A by mailing by the end of February, May,
August, and December of the same year. Upon request by Party A, Party B should
send all required reports (including, but not limited to, balance sheet,
statement of profit and loss, debt and assets details) to Party A and legal
notarizations of those reports may be considered by necessity.

7.
Breach of the Agreement: prior to the repayment of the debt of this Agreement,
in case Party B fails to repay any of the installment amount prescribed in the
Article 1 of this Agreement, all the obligations shall become due. In case any
of the following conditions occur, without notification of or legal procedures
performed by Party A, Party B loses the right of repaying the total amount by
installments and Party A may request Party B to repay all the installment
payments in full at once.

 
1)
Party B fails to repay any overdue installment payment, part of any installment
payment or insufficient savings for cashing a promissory note signed by Party B,
or Party B’s bank account is treated as a dishonored accountee, or any check of
Party B is bounced or any payment is delayed;

 
2)
Party B is under provisional impounded, provisional disposition, provisional
execution, forcible execution, or bankruptcy petition or application of
reconciliation, mediation, reorganization, or declares bankrupt and liquidation
due to other debts;

 
3)
Inheritor(s) of Party B claims limited inheritance or renounces right to inherit
the obligations of the Agreement due to death or missing of Party B or other
reasons;

 
4)
Party B fails to inform Party A in advance when Party B move to another address
or relocate the storage of the object(s);

 
5)
Party B rejects to replace different guarantors when Party A considers that the
credit of Party B is significantly decreased or the incapability of the
guarantors of Party B;

 
6)
Party B fails to act as a good administrator to carefully use or safe keep the
object(s) or neglect the responsibility of maintenance or repair work;

 
7)
All the purchased object(s) are for business purpose; nevertheless, when the
company ‘s business or operations are suspended, closed, dismissed, the
company’s license is revoked;

 
8)
Party B uses the object(s) for selling, mortgage, rent, or other disposition
before the total payment amount prescribed in this Agreement is repaid;

 
9)
Party B fails to perform the terms and conditions of this Agreement.

Any damage or costs incurred by Party A due to the retrieval of the object(s)
from any of the aforementioned behaviors shall be liable to Party B.
 
 
8

--------------------------------------------------------------------------------

 

   
In case any of the aforementioned conditions occurs, Party B shall pay to Party
A 10% of the annual interest based on the total remaining installment amount,
starting from the date Party B breaches the Agreement.

8.
Guarantee liabilities: the guarantors of Party B have fully perused all contents
of this Agreement and are liable to obligations with Party B in relation with
all debts prescribed in this Agreement and shall forsake the guarantor’s
counterplea right of telling first of the of Article 745 of Civil Code of
Republic of China. In case Party B fails to perform the obligations of this
Agreement, the guarantors of Party B shall repay the full amount on behalf of
Party B at once and can not request for surrender insurance before the expiry of
the insurance.

9.
Promissory note: Party B and the guarantors of Party B shall sign a promissory
note of the payment amounts and dates prescribed in this Agreement with this
Agreement No. indicated thereon to Party A for record. In case Party B fails to
perform the Agreement, Party A may use the promissory note to ask for the
payments payable, including penalty, interest, overdue interest and/or other
costs incurred by Party B and the guarantors of Party B.

10.
Jurisdiction: this Agreement shall be performed in the location of Party A and
in the event any disputes arising from the explanation and execution of the
Agreement and may bring in a lawsuit case, Party A, Party B and the guarantors
of Party B agree that case shall be subject to the jurisdiction of the Taiwan
Taipei District Court for the first trial of such lawsuit.

11.
Others: either party may add, amend, or delete any terms and conditions
prescribed in this Agreement during the Agreement period, such revision of this
Agreement shall be made after the consent between both parties are obtained;
although the guarantors of Party B may not be informed of such amendment or
revision of this Agreement or the consent of the guarantee of Party B may not be
obtained in advance, the guarantors of Party B should be liable to the
responsibilities together with Party B to this Agreement and shall not file
uncovenanted counterplea. In case that that Party A agrees Party B to extend the
installment repayment periods of this Agreement, the guarantors of Party B
should be willing to be liable to the responsibilities together with Party B to
this Agreement.

12.
This Agreement shall be made in two copies; each of which shall be kept by each
party for record.

13.
Other Conditions: Party B shall pay to Party A NTD300,000 as the handling charge
of financial planning (exclusive of tax).

 
 
9

--------------------------------------------------------------------------------

 
Verified Seal(s)
(Kid Castle Internet Technologies Ltd. seal)
Kuo-An Wang (seal)
Date: Jun. 9, 2005
Kuo-An Wang (seal)
Date: Jun. 9, 2005
Yu-En Chiu (seal)
Date: Jun. 9, 2005
 

Party A: FCB LEASING CO., LTD. (sealed)
Legal/Authorized Representative: Zhe-San Tsai

Party B: Kid Castle Internet Technologies Ltd. (sealed)
Legal /Authorized Representative: Kuo-An Wang (signed and sealed)

Guarantors of Party B: Kuo-An Wang (signed and sealed)
Address: 2F, 299, Xi-yuan Road, Hsindian City, Taipei County

Guarantors of Party B: Yu-En Chiu (signed and sealed)
Address: 71, Sec. 1, Nan-chang Road, Chung-cheng District, Taipei City

Date: Jun. 9, 2005

Serial No.
Object Item
Quantity
Unit
110130010011
Textbook - New Magic Land 1
16540
Book
110199030066
Textbook - Magazine Vol. 66
3520
Book
110199030067
Textbook - Magazine Vol. 67
4396
Book
110230010011
Supplementary Material- New Magic Land 1
436174
Book
110862011
Textbook - English Now 4
9819
Book
111006011
Textbook - Big Steps(6)
1645
Book
111112011
Textbook - Way To Go (12)
1224
Book
111113011
Textbook - Way To Go (13)
1700
Book
112707011
Textbook - Magic Land 7
7180
Book
120851012
Supplementary Material - English Now 1 (standard version) Workbook (version 93)
7121
Book
122701012
Supplementary Material - Magic Land 1 (revised version)
4915
Book

 
 
10

--------------------------------------------------------------------------------

 
 
132424011
Teaching plan - Come With Me(practice notebook)
2700
Book
132705011
Teaching plan - Magic Land 5 teacher’s manual
2658
Book
142400011
Teaching product - Come With Me Learning Recorder
37451
Book
160012011
Test - General English Proficiency Test (GEPT) I test C
2880
Book
2101085201
Flash Card - English Now 2 Vocabulary (big)
2883
Pack
2101086101
Flash Card - English Now 2 Conversation & Pronunciations (big)
1113
Pack
2101242301
Flash Card - Come With Me/ for Teacher (yellow)
2622
Pack
2101243501
Flash Card - Come With Me/ for Teacher (blue)
1447
Pack
2102242401
Flash Card - Come With Me (green)/54 pieces
3994
Pack
2102243601
Flash Card - Come With Me (purple)/65 pieces
5383
Pack
330303013
CD interaction - Wonderland(yellow)/paperback version
2131
Disc
330305013
CD interaction - Wonderland(blue)/paperback version
2787
Disc
91291110001001
Textbook - Read It Now Red (1 book 1AVCD)
11830
Pack
91292310001001
Textbook - Read It Now Yellow (1 book 1AVCD)
11315
Pack
91293510001001
Textbook - Read It Now Blue (1 book 1AVCD)
10921
Pack
110111140111
WAY TO GO(14) - Grammar & Conversation
1885
Book
91040000000001
Kids Speak Main Course Series - Direct Sale
628
Pack
91050000000001
Diverse Intelligence Main Course Series - Direct Sale
780
Pack
91090000000001
Kids Talk Story Series - Direct Sale
422
Pack
920302002
Teaching Aids -Wonderland Orange Teacher’s Wall Chart set (for preliminary
school students)
686
Pack
91000000000047
Textbook- Tomei series 2-2 - Direct Sale (Model test)
437
Pack
     
 

 
 
11

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