FY2002 10K Exhibit 10.74





Exhibit 10.74

Foreign Currency Loan Contract

Number: FL020036CH

Lender: Shanghai Bank

                   Address or Place of Business: No. 585 Zhongshan East Road,
Shanghai

                   Borrower: Shanghai Fangyuan Digital Technology Co., Ltd.

                   Address or Place of Business: No. 421 Zhongshan East Road,
Building No. 62

                   Legal Representative: Wang Guoxiong

Borrower and Lender, in accordance with the provisions of the
relevant laws, regulations and policies, have arrived at the following terms and
conditions through equitable consultations for the purpose of joint compliance
therewith.

Article 1Amount, Term and Use of Loan

1.1The amount of the loan is US$ One Million Two
Hundred Thousand Exactly.

1.2 The term of the loan, from the date on which Lender
actually extends loan proceeds to Borrower until the agreed upon repayment date,
shall at a maximum not exceed 180 days. The actual start and end dates will be
as recorded in loan documentation.

1.3 The use of the loan shall be restricted to working
capital needs.

Article 2Drawdown of Loan

2.1Prerequisites. Borrower must submit the following
documents and information to Lender prior to the first drawdown of the loan:

(1)As of each drawdown date, the declarations made in
Article 6 and the warranties made in Article 7 by Borrower are true and
accurate, and no default or delinquency as listed in Article 8.1 has
occurred.

(2)In addition to meeting the conditions of Article
2.1(1) at the date of first drawdown, Borrower shall further meet the following
conditions:

â
Submission of the "Loan Card" issued by the Shanghai Branch of the People's
Bank of China, which has passed annual review;

ã
This Contract and the Security Contract for this Contract shall have already
taken effect;

ä
Other conditions as required by Lender.

2.2Drawdown Procedures

(1)Drawdown Period: After this Contract takes effect,
Borrower must draw down the entire proceeds of the Loan hereunder by  ---
 in  ---  installments.

(2)In order to draw down the Loan, Borrower shall submit
valid loan documentation to Lender three bank business days in advance.

(3)After the drawdown period, any remaining loan limit
that has not been drawn down shall automatically be cancelled.

Article 3Interest

3.1The interest rate for the Loan hereunder shall be
6L +0.95, based on a thirty-day month; interest shall accrue based on the
actual number of days the loan is used.

3.2Payment of interest: When the loan becomes due,
interest shall be paid together with principal. The interest payment date is the
maturity date of the loan. In the event that the interest payment date falls on
a non-bank business day, it shall be extended until the next bank business
day.

3.3During the effective term of this Contract, if the
People's Bank of China adjusts interest rates, adjustments will be implemented
accordingly. Adjustments by Lender of the interest rate under the terms of this
Contract in accordance with People's Bank of China regulations shall not be
construed as amendment of or supplementary to this Contract.

3.4All taxes and fees occurring under the terms of this
Contract (including, but not limited to, stamp tax, attorney's fees, notary
fees, appraisal fees, registration fees and expenses arising from the execution,
discharge and revision of the Contract) shall be borne by Borrower, except as
otherwise provided by law.

Article 4Repayment

4.1Borrower shall repay the loan in accordance with
the maturity dates and amounts on loan documentation. If the Loan maturity date
is a non-bank business day, then it shall be extended until the next bank
business date.

4.2In the event that Borrower requests early repayment,
Borrower shall notify Lender ten bank business days in advance, and may only
proceed upon Lender approval. Early repayments shall take place sequentially
according to the repayment plan listed on loan documentation.

4.3In the event that the repayment amount is insufficient
to fully repay all loan principal and interest due (including delinquency
interest and penalties; the same applies below) and relevant expenses, payments
shall be applied sequentially to relevant expenses, interest and then
principal.

4.4When repaying principal, interest (penalties) and
relevant expenses for the Loan under the terms of this Contract, Borrower shall
pay in the currency set forth in Article 1.1 of this Contract. If payment is
made in other currencies, an equivalent amount of said currency calculated based
on the quoted selling exchange rate for the Loan currency published by Lender on
the payment date shall be paid.

Article 5Security

5.1The loan under the terms of this Contract is
secured by  ---  provided by  ---  and approved by Lender. For
specific contents of the security contract, see Attachment 1 to this
Contract.

Article 6Declarations

6.1Borrower hereby declares to Lender that:

(1)Borrower is an enterprise (institution) juridical
person or other economic organization registered in accordance with the laws of
the People's Republic of China, has passed annual review procedures required by
industry and commerce administration departments, and is qualified and competent
to execute and fulfill this Contract;

(2)All documents and information associated with this
Contract and security matters provided by Borrower to Lender are complete, true
and valid;

(3)Financial statements provided by Borrower are compiled
in accordance with Accounting Standards of the People's Republic of China; said
statements and all other information attached are complete and true; and no
major detrimental changes have occurred to Borrower's financial or credit status
since the application for this Loan was submitted;

(4)Borrower's execution and fulfillment of this Contract
do not violate Borrower's Articles of Association or the provisions of laws or
regulations that are legally binding upon Borrower;

(5)Borrower's execution and fulfillment of this Contract
do not conflict with any other Contracts currently executed and in the process
of fulfillment;

(6)Borrower has not concealed any litigation,
arbitration, claims or other violations in which it is involved, which may
endanger Lender's interests.

Article 7Warranties

7.1Borrower hereby promises that within the effective
term of this Contract:

(1)By the fifteenth of each month, Borrower will submit
the prior month's financial statements to Lender, and by the end of April each
year, Borrower shall submit the prior year's financial statements, said
statements to be audited or to have passed fiscal department audit, and shall
promptly submit other information as deemed necessary by Lender;

(2)Borrower will accept Lender's oversight and
examination of Borrower's use of credit loan proceeds and relevant production,
management and financial activities, and shall offer Lender working
convenience;

(3)If Borrower wishes to provide security to a third
party, Borrower shall first notify Lender; if Borrower's performance of the
obligations under the terms of this Contract is affected, Lender's approval
shall be obtained;

(4)Borrower shall notify Lender thirty days in advance of
the occurrence of joint operation, mergers, acquisitions, joint ventures,
cooperative ventures, spin-offs, suspension of operations, dissolution,
bankruptcy or restructuring of stock ownership system, foreign investment,
subcontracting, leasing, or assignment of property ownership for compensation,
and shall provide a debt repayment plan that is acceptable to Lender;

(5)Borrower will purchase insurance on property
associated with the Loan from an insurance company;

(6)If deemed necessary by Lender, Borrower shall have
this Contract notarized;

(7)Borrower will notify Lender immediately if Borrower
becomes involved in litigation, or if Borrower's assets undergo enforcement
measures by a judicial authority, including freezing, attachment or
confiscation;

(8)Borrower will not allow Loan process to flow into the
stock market or futures market by any means;

(9)If Borrower modifies such matters as its name,
official seal, Articles of Association, address, contact address, scope of
operations, legal representative, or registered capital, Borrower shall notify
Lender in writing within seven days of the date of such changes;

(10)If any events occur to Borrower that may endanger the
interests of Lender, in addition to taking the initiative to adopt remedial
measures, Borrower shall promptly notify Lender in writing;

(11)If major changes occur to the guarantor such that the
performance of security obligations is affected, Borrower shall promptly notify
Lender.

Article 8Breach of Contract

8.1The occurrence of any of the following situations
with respect to Borrower shall constitute a breach of contract:

(1)Failure to repay Loan principal and interest in
accordance with the deadlines and amounts stipulated in this Contract;

(2)Failure to use Loan proceeds in accordance with the
purpose stipulated in this Contract;

(3)Failure to perform the warranties under Article 7 of
this Contract, and failure to achieve remedy or correction within fifteen days
beginning from the date on which such failure occurs;

(4)Declarations made in this Contract are proved
false;

(5)Inability to fulfill obligations in any other loan,
financing or security contracts executed with Lender or third parties;

(6)Illegal operations;

(7)Application for bankruptcy, declared bankrupt or
(have) operations suspended;

(8)Security under the terms of this Contract is invalid
or Guarantor is disqualified as guarantor, or collateral or pledged objects used
to secure this Contract undergo enforcement measures or are claimed by third
parties;

(9)Other action or inaction affecting the performance of
this Contract.

8.2In the event that Borrower is in breach of contract,
Lender has the right to adopt any one or several of the following measures; with
respect to this, Borrower unconditionally forfeits all rights of defense.

(1)With respect to the default event set forth in Article
8.1(1), if the insufficient payment is for quarterly interest, compound interest
at the original interest rate will accrue beginning on the day after the
interest payment date; if the insufficient payment is for interest due upon
maturity, delinquent penalty interest at a rate of 130% of the original
interest rate will accrue beginning on the day after the maturity date;

(2)With respect to the default event set forth in Article
8.1(2), penalty interest at a rate of 150% of the original interest rate
will accrue on the misappropriated amount beginning from the date on which funds
are misappropriated through such time as the situation is corrected;

(3)Partial or full termination of Borrower's right to
draw down the loan;

(4)Declaration of the full loan amount as due, requiring
repayment within a limited time period or active deduction and collection in
accordance with the provisions of Article 9 of this Contract.

(5)Disposition of all or part of the collateral or
pledged objects provided by Borrower or mortgagor (pledgor), or demanding that
guarantor fulfill guarantee liability;

(6)Filing of litigation according to law or other means
of recourse.

8.3All expenses and losses incurred as the result of
recovering the Loan (including, but not limited to, Lender's attorney's fees and
expenses incurred by Lender to realize debt creditor's rights) shall be borne by
Borrower.

Article 9Deduction and Collection

9.1When the Loan under the terms of this Contract
comes due or is declared due, Lender has the right to directly deduct and
collect Loan principal, interest and associated expenses from Borrower's
accounts established with Lender (including all branches of Shanghai Bank).
Borrower forfeits all rights of defense with respect hereto.

Article 10Exercise of Rights

10.1During the execution and performance of this
Contract, Lender's failure to exercise or delayed exercise of any rights under
the terms of this Contract, or lenience with respect to the conditions and
procedural requirements for Borrower to apply for and use the Loan, shall be
deemed to be Lender's independent, one-time acts, and shall not constitute
forfeiture or postponement of exercise of rights on the part of Lender, nor
shall same constitute a precedent for relaxing or easing conditions and
procedural requirements with respect to Borrower's application for and use of
the Loan, nor shall same affect Lender's exercise of other rights under the
terms of this Contract or any of Borrower's obligations under the terms of this
Contract.

Article 11Notices

11.1Except as otherwise provided in this Contract,
relevant notices and demands between the two parties to this Contract shall be
delivered to the opposite party in writing by the designated means to the
contact addresses listed on the signature page of this Contract. Notices
delivered by registered mail with return receipt requested shall be deemed to
have been delivered on the date on which the recipient signs or seals the return
receipt; notices delivered by special courier shall be deemed to have been
delivered on the date on which the recipient signs for acceptance.

Article 12Assignment of Creditor's Rights

12.1Lender may autonomously decide to assign all or
part of its creditor's rights under the terms of this Contract; however, Lender
shall promptly notify Borrower. Without the written consent of Lender, Borrower
must not assign its obligations under the terms of this Contract in any
form.

Article 13Other Terms and Conditions

13.1Loan and repayment documents, interest settlement
statements and agreements, delinquent payment demands and penalty interest
notices associated with the performance of this Contract shall all constitute
integral components of this Contract, and shall all be legally binding on the
two parties to the Contract.

13.2In order to be valid, any revisions or supplements to
this Contract and its integral components shall require the execution of
corresponding agreements by the two parties after reaching consensus through
consultations.

13.3This Contract is legally binding on the two parties
to the Contract and their heirs and assignees.

13.4The two parties agree:

13.5In the event of disputes during the performance of
this Contract, if consultations of the two parties are unsuccessful, litigation
shall be filed according to law with the Lender's local People's Court of
jurisdiction.

13.6This Contract shall take effect upon signing or
affixing of seals by the legal representatives or their authorized
representatives and affixing of official corporate seals, and shall terminate
automatically when Borrower's debt obligations under the terms of this Contract
are fully repaid.

 

13.7There are three identical original copies of this
Contact, one to be held by each of the two parties to this Contract, and one to
be submitted to the Shanghai Branch of the State Administration of Foreign
Exchange for its records.

Attachments:

1.Security Contract number [blank]

                   2.






Lender:Shanghai Bank

                   (Official seal)[seal:]          Shanghai Bank

                  
                       Special Contract Seal


Legal representative or authorized representative [personal seal illegible]

                   (Signature or seal)


Contact Address: [blank]

Borrower: [official seal illegible]

                   (Official Seal)

Legal representative or authorized representative: [seal:]
Wang Guoxiong

                  (Signature or seal)

Contact Address: [blank]

Signed at: Shanghai                Date signed: December 18, 2002