Document:

Ref.
        No.:
        3770502005M100004900

      

      

      

      

      

      

      

      

      Loan
        Contract
(Summary
        Translation)

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      Bank
        of
        Communication

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

       

      

      Ref
        No.:3770502005M100004900

      Loan
        Contract 

      

      
        
          

          
            	Borrower:	 Fuwei Films (Shandong) Co.,
                    Ltd.
	 	 
	Legal Representative:	 Xiaoan He
	 	 
	Legal Address:	 358 Dongfeng Dong Street,
                    Kui
                    District, Weifang
	 	 
	Correspondence Address:	 Same as above
	 	 
	 	 
	Lender:	 Weifang Branch, Bank of
                    Communication
	 	 
	Responsible Person:	 Zengcun Wang
	 	 
	
                    Correspondence
                      Address:

                  	 Dongming Road, Hi-Tech Development
                    Zone, Weifang

          

           

        

      

      
        Both
          parties agree to the following terms:

         

        
          
            	
                    1

                  	
                    Loan

                  

          

           

          
            	
                    1.1

                  	
                    Currency:
                      Renminbi (RMB)

                  

          

           

          
            	
                    1.2

                  	
                    Amount:
                      52,600,000 Only

                  

          

           

          
            	
                    1.3

                  	
                    The
                      proceeds of the Loan under this Contract shall be used for
                      industrial
                      working capital.

                  

          

           

          
            	
                    1.4

                  	
                    Loan
                      Period: Commencing from December 30, 2005, to November 25,
                      2006.

                  

          

          

          
            	
                    2

                  	
                    Interest
                      Rate and Computation of
                      Interest

                  

          

           

          
            	
                    2.1

                  	
                    Interest
                      rate: 6.696% (√ annually     
                      monthly).

                  

          

           

          
            	
                    2.2

                  	
                    Computation
                      of Interest

                  

          

           

          
            	
                    2.2.1

                  	
                    Normal
                      interest = interest rate under this Contract   X 
                       proceeds of the Loan   X   number of days of
                      use. Number of days of use is calculated from the drawing date
                      to the
                      maturity date. 

                  

          

          
             

            
              
                
                

              

              
                -2-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	
                    2.2.2

                  	
                    The
                      penalty interest of the overdue loan and appropriated loan
                      is calculated
                      based on the amount and the actual number of days overdue or
                      appropriated.
                      If the currency of the loan is Renminbi (RMB), the overdue
                      penalty
                      interest rate is equal to the loan interest rate set forth
                      in this
                      Contract plus 30% of such loan’s interest rate, and the appropriated
                      penalty interest rate is equal to the loan interest rate set
                      forth in this
                      Contract plus 50% of such loan interest rate. If the currency
                      of the loan
                      is a foreign currency, the aforesaid penalty interest rates
                      are equal to
                      the loan interest rate set forth in this Contract plus 20%
                      of such loan
                      interest rate. 

                  

          

           

          
            	
                    2.3

                  	
                    The
                      loan under this Contract uses the second (2nd)
                      method mentioned below for payment of interest. On the maturity
                      date, the
                      interest shall be paid together with the principal. The date
                      of payment of
                      interest is the date of the settlement of
                      interest:

                  

          

           

          
            	 	
                    1.

                  	
                    Interest
                      settlement on the 20th
                      day of the last month of each quarter;
                      or

                  

          

           

          
            	 	
                    2.

                  	
                    Interest
                      settlement on the 20th
                      day of each month.

                  

          

           

          
            	
                    3

                  	
                    Granting
                      and Repayment of Loan

                  

          

           

          
            	
                    3.1

                  	
                    Borrower
                      shall start the related procedure three (3) business days prior
                      to drawing
                      the proceeds of the Loan in accordance with the following loan
                      drawing
                      schedule: (N/A)

                  

          

          

          Drawing
            Date       Drawing
            Amount

          ___
            day
            ___ month ___ Year; ________________________(amount in English)

          ___
            day
            ___ month ___ Year; ________________________(amount in English)

          ___
            day
            ___ month ___ Year; ________________________(amount in English)

          ___
            day
            ___ month ___ Year; ________________________(amount in English)

           

          
            
              
                
                

              

              
                -3-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	
                    3.2

                  	
                    Unless
                      all of the following conditions are satisfied, Lender has the
                      right to
                      refuse to grant the Loan:

                  

          

           

          
            	 	
                    1.

                  	
                    Borrower
                      has already completed the statutory procedures including obtaining
                      related
                      permit, approval and registration from the government and such
                      permit,
                      approval and registration remain in full force and
                      effect.

                  

          

           

          
            	 	
                    2.

                  	
                    The
                      guarantee contract (if any) under this Contract has come into
                      effect and
                      remains in full force and effect.

                  

          

           

          
            	 	
                    3.

                  	
                    The
                      financial condition of the Borrower does not have any substantial
                      adverse
                      changes; and

                  

          

           

          
            	 	
                    4.

                  	
                    Borrower
                      is not in breach of this Contract. 

                  

          

           

          
            	
                    3.3

                  	
                    The
                      actual drawing date and drawing amount shall be in accordance
                      with the
                      promissory note.

                  

          

           

          
            	
                    3.4

                  	
                    Borrower
                      shall not repay the Loan prior to the scheduled date without
                      having a
                      written consent from Lender.

                  

          

           

          
            	
                    4

                  	
                    Representation
                      and Guarantee of the
                      Borrower

                  

          

           

          
            	
                    4.1

                  	
                    Borrower
                      is an independent entity and has the necessary contractual
                      capacity to
                      perform this Contract and will be liable for its non-performance
                      of its
                      obligations hereunder.

                  

          

           

          
            	
                    4.2

                  	
                    The
                      execution and performance of this Contract is the true intention
                      of the
                      Borrower, and the Borrower has all necessary consents, approvals
                      and
                      authorizations to perform its obligations.

                  

          

           

          
            	
                    4.3

                  	
                    All
                      the documents, reports, data and information provided by the
                      Borrower to
                      the Lender during the execution and performance of this Contract
                      are true,
                      accurate, complete and in full effect, and Borrower has not
                      withheld any
                      information which may affect the evaluation of its financial
                      status and
                      repayment ability. 

                  

          

           

          
            	5	
                    Rights
                      and Obligations of Lender

                  

          

          
             

            
              
                
                

              

              
                -4-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	
                    5.1

                  	
                    Lender
                      has the right to be repaid the principal, receive interest
                      (including
                      compound, overdue and appropriated penalty interest) and the
                      necessary
                      expenses from the Borrower in accordance with this Contract.
                      Lender has
                      the right to exercise any other rights under the relevant laws
                      and
                      regulations or stipulated in this Contract.

                  

          

           

          
            	
                    5.2

                  	
                    Except
                      as otherwise specified under this contract, Lender shall keep
                      all the
                      financial and operation data and information confidential unless
                      compelled
                      by requirements of applicable laws and regulations.
                      

                  

          

           

          
            	6	
                    Rights
                      and Obligations of
                      Borrower

                  

          

           

          
            	
                    6.1

                  	
                    Borrower
                      shall repay the Loan under this Contract and pay the interest
                      hereunder in
                      accordance with the date, amount, currency set forth in this
                      Contract.
                      

                  

          

           

          
            	
                    6.2

                  	
                    Borrower
                      shall not use the proceeds of the Loan for any usage not stipulated
                      in
                      this Contract. 

                  

          

           

          
            	
                    6.3

                  	
                    Borrower
                      shall be liable for the expenses under this Contract, including
                      but not
                      limited to, expenses for notary service, authentication, evaluation
                      and
                      registration.

                  

          

           

          
            	
                    6.4

                  	
                    Borrower
                      shall comply with the operation procedure and the general practice
                      of the
                      Lender and loan application, including but not limited to,
                      facilitating
                      Lender’s examination and supervision on Borrower’s operation status, and
                      providing all the financial statements, or any other data and
                      information
                      requested by Lender, and shall guarantee that such documents,
                      data and
                      information are true, complete and accurate.

                  

          

           

          
            	
                    6.5

                  	
                    If
                      any one of the following events occurs, Borrower shall notify
                      the Lender
                      within thirty (30) days and shall not commence such activities
                      unless the
                      Loan and interest under this Contract are repaid completely,
                      or a
                      repayment schedule and guarantee are approved and accepted
                      by the Lender.
                      These are as follows:

                  

          

          
             

            
              
                
                

              

              
                -5-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	 	
                    1.

                  	
                    Selling,
                      donating, renting, lending, assigning, mortgaging, pledging
                      or disposing
                      of all or substantial part of its
                      assets.

                  

          

           

          
            	 	
                    2.

                  	
                    Any
                      substantial changes in organization or structure of the Borrower,
                      including but not limited to, its operation, subcontracting,
                      lease,
                      affiliation, company restructuring, joint-stock, merger (consolidation),
                      equity joint-venture (non-equity), spin-off, incorporation
                      of subsidiary,
                      asset assignment, reduction of registered capital, etc.
                      

                  

          

           

          
            	
                    6.6

                  	
                    Borrower
                      shall notify the Lender within seven (7) days of occurrence
                      of any of the
                      following events: 

                  

          

           

          
            	 	
                    1.

                  	
                    Amendment
                      of the Articles of Association, change of Borrower’s name, change of legal
                      representative , change of domicile, change of address, and
                      change in the
                      scope of its business.

                  

          

           

          
            	 	
                    2.

                  	
                    Borrower
                      or Guarantor’s (if any) intention to file for
                      bankruptcy.

                  

          

           

          
            	 	
                    3.

                  	
                    Borrower’s
                      involvement in any major litigation or arbitration, or any
                      lien or
                      encumbrance is imposed on its
                      assets.

                  

          

           

          
            	 	
                    4.

                  	
                    Borrower’s
                      guarantee to any other third party, which will have an adverse
                      effect on
                      its financial status and ability to perform its obligations
                      under this
                      Contract.

                  

          

           

          
            	 	
                    5.

                  	
                    Borrower
                      enters into a contract which will have a material adverse effect
                      on its
                      operation and financial status. 

                  

          

           

          
            	 	
                    6.

                  	
                    Borrower
                      or Guarantor (if any) stops its operation, its business terminates
                      or its
                      business license is revoked.

                  

          

           

          
            	 	
                    7.

                  	
                    Borrower’s
                      legal representative or senior management has committed a criminal
                      offence.

                  

          

           

          
            	 	
                    8.

                  	
                    Borrower
                      faces substantial hardship in managing its business or any
                      other event
                      which will have an adverse effect on the financial status or
                      ability of
                      the Borrower to repay the Loan.

                  

          

          
             

            
              
                
                

              

              
                -6-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	
                    6.7

                  	
                    Any
                      changes to the form of collateral under this Contract that
                      may have
                      adverse effect on Lender’s right shall be made upon Lender’s consent.
                      

                  

          

           

          
            	7	
                    Maturity
                      Repayment of the Loan before the Maturity
                      Date

                  

          

           

          
            	
                    7.1

                  	
                    In
                      the event of the occurrence of any of the following events,
                      Lender has the
                      right to suspend the drawing of the proceeds of the Loan and
                      require
                      repayment of the principal of the Loan partially or completely
                      before the
                      maturity date and demand that the Borrower repay the principal
                      of the Loan
                      and pay the interest hereunder. These are as
                      follows:

                  

          

           

          
            	 	
                    1.

                  	
                    Borrower’s
                      representations and warranties in Section 4 are not true;
                      

                  

          

           

          
            	 	
                    2.

                  	
                    Borrower
                      is in breach of this Contract;

                  

          

           

          
            	 	
                    3.

                  	
                    The
                      events set forth in Section 6.6 have occurred and Lender believes
                      that
                      such event will have a material adverse effect on its rights
                      as a
                      creditor; or

                  

          

           

          
            	 	
                    4.

                  	
                    Borrower
                      has delayed its performance or is in breach of other contracts
                      entered
                      into between Borrower and Lender, and has not provided the
                      Lender with any
                      remedy upon notification by Lender.

                  

          

           

          
            	8	
                    Breach
                      of Contract

                  

          

           

          
            	
                    8.1

                  	
                    In
                      the event that Borrower fails to repay the principal or interest
                      in full
                      in a timely fashion, or to use the proceeds of the Loan as
                      set forth in
                      this Contract, Lender has the right to use the overdue penalty
                      interest
                      rate and appropriate penalty interest rate to calculate the
                      interest.

                  

          

           

          
            	
                    8.2

                  	
                    In
                      the event that Borrower fails to repay the principal or interest
                      in full
                      in a timely fashion, Borrower shall be liable for the Lender’s expenses in
                      exercising its creditor’s rights, including litigation cost (arbitration
                      fee), costs of preservation of asset, costs of publication,
                      enforcement
                      costs, legal fees, travel and other expenses.

                  

          

          
             

            
              
                
                

              

              
                -7-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	
                    8.3

                  	
                    In
                      the event that Borrower avoids Lender’s supervision, fails to repay the
                      principal or the interest of the Loan or avoids the repayment
                      intentionally, Lender has the right to inform relevant government
                      authority and to publish the payment notification in the news
                      media.

                  

          

           

          
            	9	
                    Withdrawal
                      Instruction

                  

          

           

          
            	9.1	
                    In
                      the event that Borrower is overdue in payment in respect of
                      principal,
                      interest, penalty interest, compound interest or other expenses,
                      Lender is
                      authorized to withdraw the money from any other bank accounts
                      of Borrower
                      with Bank of Communication to setoff the said outstanding payment.
                      

                  

          

           

          
            	9.2	
                    After
                      the aforesaid withdrawal, Lender shall inform the Borrower
                      of such account
                      number, loan contract reference number, promissory note reference
                      number,
                      amount of withdrawal, and the outstanding Loan amount.
                      

                  

          

           

          
            	9.3	
                    If
                      the amount of withdrawal is not sufficient to setoff the aforesaid
                      payment, the overdue expenses shall be settled first. If the
                      principal and
                      interest are overdue for less than ninety (90) days, the remaining
                      balance
                      shall be first used to settle the overdue interest, penalty
                      interest and
                      compound interest, then shall be used to settle the overdue
                      principal. In
                      the event that the overdue payment or interest is overdue for
                      more than
                      ninety (90) days, the remaining balance shall be used to settle
                      the
                      overdue principal, then shall be used to settle the overdue
                      interest,
                      penalty interest or compound interest.

                  

          

           

          
            	9.4	
                    If
                      the currency of the aforesaid withdrawal amount is different
                      from the
                      currency of the Loan, the exchange rate determined by Bank
                      of
                      Communication on the date of withdrawal shall be used for the
                      currency
                      conversion calculation. 

                  

          

           

          
            	10	
                    Dispute
                      Resolution

                  

          

           

          
            	
                    10.1

                  	
                    Any
                      dispute arising from or in connection with this Contract shall
                      be resolved
                      by the first method listed below:

                  

          

          
             

            
              
                
                

              

              
                -8-

                
                  

                

              

              
                
                

              

            

             

             

            
 

          

          
            	 	
                    1.

                  	
                    File
                      a lawsuit to the competent court in the place where Lender
                      is located; or
                      

                  

          

           

          
            	 	
                    2.

                  	
                    Submit
                      the disputes to _____________________ arbitration committee
                      for
                      arbitration in accordance with the currently effective arbitration
                      rules
                      of such committee. The arbitral award is final and is legally
                      binding upon
                      both Parties. 

                  

          

          

          
            	11	
                    Miscellaneous

                  

          

           

          
            	
                    11.1

                  	
                    This
                      Contract comes into effect upon both Parties’ execution of this
                      contract.

                  

          

           

          
            	
                    11.2

                  	
                    This
                      Contract is executed in three (3) counterparts. Each of the
                      Parties and
                      Guarantor shall keep one counterpart.

                  

          

           

          IN
            WITNESS WHEREOF,
            the
            parties hereto have executed this Contract as of the day and year first
            set
            forth below.

        

      

      
        
           

          
            	December 20, 2005	 
	 	 
	Borrower (seal):	 Lender
                    (seal):
	 	 
	 	 
	Legal Representative
                    or Authorized
                    Person	 Responsible Person or
Authorized
                    Person
	 	 
	Xiaoan He	 Bank of
                    Communication
	 	 
	 	 
	(signature or
                    seal)	 (signature or
                    seal)

          

           

        

        
        

        
        

      

      
        
          
          

        

        
          -9-Exhibit
              10.3	
               

            

    

     

    

    

    

    
 

    Loan
      Contract
(Summary
      Translation)

    

    

    

    

    

    
 

    Bank
      of
      Communication

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
      

Loan
      Contract 

     

    
      	
              Borrower:
                

            	
              Fuwei
                Films (Shandong) Co., Ltd.

            
	
              Legal
                Representative: 

            	
              Xiaoan
                He

            
	
              Legal
                Address: 

            	
              358
                Dongfeng Dong Street, Kui District, Weifang

            
	
              Correspondence
                Address: 

            	
              Same
                as above

            
	 	 
	
              Lender:
                

            	
              Weifang
                Branch, Bank of Communication

            
	
              Responsible
                Person: 

            	
              Zengcun
                Wang

            
	
              Correspondence
                Address: 

            	
              Dongming
                Road, Hi-Tech Development Zone,
                Weifang

            

    

     

    Both
      parties agree to the following terms:

     

    
      	
              1

            	
              Loan

            
	 	 
	
              1.1

            	
              Currency:
                Renminbi (RMB)

            
	 	 
	
              1.2

            	
              Amount:
                100,000,000
                Only

            
	 	 
	
              1.3

            	
              The
                proceeds of the Loan under this Contract shall be used for industrial
                working capital.

            
	 	 
	
              1.4

            	
              Loan
                Period: Commencing from April
                27, 2005, to September 20, 2006.

            
	 	 

    

    
      	
              2

            	
              Interest
                Rate and Computation of Interest

            
	 	 
	
              2.1

            	
              Interest
                rate: 5.76%
                (√ annually monthly).

            
	 	 
	
              2.2

            	
              Computation
                of Interest

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              2.2.1

            	
              Normal
                interest = interest rate under this Contract X proceeds of the Loan
                X
                number of days of use. Number of days of use is calculated from the
                drawing date to the maturity date. 

            
	 	 
	
              2.2.2

            	
              The
                penalty interest of the overdue loan and appropriated loan is calculated
                based on the amount and the actual number of days overdue or appropriated.
                If the currency of the loan is Renminbi (RMB), the overdue penalty
                interest rate is equal to the loan interest rate set forth in this
                Contract plus 30% of such loan’s interest rate, and the appropriated
                penalty interest rate is equal to the loan interest rate set forth
                in this
                Contract plus 30%
                of such loan interest rate. If the currency of the loan is a foreign
                currency, the aforesaid penalty interest rates are equal to the loan
                interest rate set forth in this Contract plus 20% of such loan interest
                rate. 

            
	 	 
	
              2.3

            	
              The
                loan under this Contract uses the second (2nd)
                method mentioned below for payment of interest. On the maturity date,
                the
                interest shall be paid together with the principal. The date of payment
                of
                interest is the date of the settlement of interest:

            
	 	 
	
               

            	
              
                1.    Interest
                  settlement on the 20th day of the last month of each quarter;
                  or

              

            
	 	 
	
               

            	
              
                2.    Interest
                  settlement on the 20th day of each
                  month.

              

            
	 	 
	
              3

            	
              Granting
                and Repayment of Loan

            
	 	 
	
              3.1

            	
              Borrower
                shall start the related procedure three (3) business days prior to
                drawing
                the proceeds of the Loan in accordance with the following loan drawing
                schedule: (N/A)

            

    

     

    
      Drawing
        Date       Drawing
        Amount

      ___
        day
        ___ month ___ Year; ________________________(amount in English)

      ___
        day
        ___ month ___ Year; ________________________(amount in English)

      ___
        day
        ___ month ___ Year; ________________________(amount in English)

      ___
        day
        ___ month ___ Year; ________________________(amount in English)

      
 

    

    
      	
              3.2

            	
              Unless
                all of the following conditions are satisfied, Lender has the right
                to
                refuse to grant the Loan:

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              1.

            	
              Borrower
                has already completed the statutory procedures including obtaining
                related
                permit, approval and registration from the government and such permit,
                approval and registration remain in full force and
                effect.

            
	 	 
	
              2.

            	
              The
                guarantee contract (if any) under this Contract has come into effect
                and
                remains in full force and effect.

            
	 	 
	
              3.

            	
              The
                financial condition of the Borrower does not have any substantial
                adverse
                changes; and

            
	 	 
	
              4.

            	
              Borrower
                is not in breach of this Contract. 

            
	 	 

    

    
      	
              3.3

            	
              The
                actual drawing date and drawing amount shall be in accordance with
                the
                promissory note.

            
	 	 
	
              3.4

            	
              Borrower
                shall not repay the Loan prior to the scheduled date without having
                a
                written consent from Lender.

            
	 	 
	
              4

            	
              Representation
                and Guarantee of the Borrower

            
	 	 
	
              4.1

            	
              Borrower
                is an independent entity and has the necessary contractual capacity
                to
                perform this Contract and will be liable for its non-performance
                of its
                obligations hereunder.

            
	 	 
	
              4.2

            	
              The
                execution and performance of this Contract is the true intention
                of the
                Borrower, and the Borrower has all necessary consents, approvals
                and
                authorizations to perform its obligations. 

            
	 	 
	
              4.3

            	
              All
                the documents, reports, data and information provided by the Borrower
                to
                the Lender during the execution and performance of this Contract
                are true,
                accurate, complete and in full effect, and Borrower has not withheld
                any
                information which may affect the evaluation of its financial status
                and
                repayment ability. 

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              5

            	
              Rights
                and Obligations of Lender

            
	 	 
	
              5.1

            	
              Lender
                has the right to be repaid the principal, receive interest (including
                compound, overdue and appropriated penalty interest) and the necessary
                expenses from the Borrower in accordance with this Contract. Lender
                has
                the right to exercise any other rights under the relevant laws and
                regulations or stipulated in this Contract. 

            
	 	 
	
              5.2

            	
              Except
                as otherwise specified under this contract, Lender shall keep all
                the
                financial and operation data and information confidential unless
                compelled
                by requirements of applicable laws and regulations. 

            
	 	 
	
              6

            	
              Rights
                and Obligations of Borrower

            
	 	 
	
              6.1

            	
              Borrower
                shall repay the Loan under this Contract and pay the interest hereunder
                in
                accordance with the date, amount, currency set forth in this Contract.
                

            
	 	 
	
              6.2

            	
              Borrower
                shall not use the proceeds of the Loan for any usage not stipulated
                in
                this Contract. 

            
	 	 
	
              6.3

            	
              Borrower
                shall be liable for the expenses under this Contract, including but
                not
                limited to, expenses for notary service, authentication, evaluation
                and
                registration.

            
	 	 
	
              6.4

            	
              Borrower
                shall comply with the operation procedure and the general practice
                of the
                Lender and loan application, including but not limited to, facilitating
                Lender’s examination and supervision on Borrower’s operation status, and
                providing all the financial statements, or any other data and information
                requested by Lender, and shall guarantee that such documents, data
                and
                information are true, complete and accurate. 

            
	 	 
	
              6.5

            	
              If
                any one of the following events occurs, Borrower shall notify the
                Lender
                within thirty (30) days and shall not commence such activities unless
                the
                Loan and interest under this Contract are repaid completely, or a
                repayment schedule and guarantee are approved and accepted by the
                Lender.
                These are as follows:

            
	 	 

    

    
    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              1.

            	
              Selling,
                donating, renting, lending, assigning, mortgaging, pledging or disposing
                of all or substantial part of its assets.

            
	 	 
	
              2.

            	
              Any
                substantial changes in organization or structure of the Borrower,
                including but not limited to, its operation, subcontracting, lease,
                affiliation, company restructuring, joint-stock, merger (consolidation),
                equity joint-venture (non-equity), spin-off, incorporation of subsidiary,
                asset assignment, reduction of registered capital, etc.

            
	 	 

    

    
      	
              6.6

            	
              Borrower
                shall notify the Lender within seven (7) days of occurrence of any
                of the
                following events: 

            
	 	 

    

    
      	
              1.

            	
              Amendment
                of the Articles of Association, change of Borrower’s name, change of legal
                representative , change of domicile, change of address, and change
                in the
                scope of its business.

            
	 	 
	
              2.

            	
              Borrower
                or Guarantor’s (if any) intention to file for
                bankruptcy.

            
	 	 
	
              3.

            	
              Borrower’s
                involvement in any major litigation or arbitration, or any lien or
                encumbrance is imposed on its assets.

            
	 	 
	
              4.

            	
              Borrower’s
                guarantee to any other third party, which will have an adverse effect
                on
                its financial status and ability to perform its obligations under
                this
                Contract.

            
	 	 
	
              5.

            	
              Borrower
                enters into a contract which will have a material adverse effect
                on its
                operation and financial status. 

            
	 	 
	
              6.

            	
              Borrower
                or Guarantor (if any) stops its operation, its business terminates
                or its
                business license is revoked.

            
	 	 
	
              7.

            	
              Borrower’s
                legal representative or senior management has committed a criminal
                offence.

            
	 	 
	
              8.

            	
              Borrower
                faces substantial hardship in managing its business or any other
                event
                which will have an adverse effect on the financial status or ability
                of
                the Borrower to repay the Loan.

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              6.7

            	
              Any
                changes to the form of collateral under this Contract that may have
                adverse effect on Lender’s right shall be made upon Lender’s consent.
                

            
	 	 
	
              7

            	
              Maturity
                Repayment of the Loan before the Maturity Date

            
	 	 
	
              7.1

            	
              In
                the event of the occurrence of any of the following events, Lender
                has the
                right to suspend the drawing of the proceeds of the Loan and require
                repayment of the principal of the Loan partially or completely before
                the
                maturity date and demand that the Borrower repay the principal of
                the Loan
                and pay the interest hereunder. These are as follows:

            
	 	 

    

    
      	
              1.

            	
              Borrower’s
                representations and warranties in Section 4 are not true;
                

            
	 	 
	
              2.

            	
              Borrower
                is in breach of this Contract;

            
	 	 
	
              3.

            	
              The
                events set forth in Section 6.6 have occurred and Lender believes
                that
                such event will have a material adverse effect on its rights as a
                creditor; or

            
	 	 
	
              4.

            	
              Borrower
                has delayed its performance or is in breach of other contracts entered
                into between Borrower and Lender, and has not provided the Lender
                with any
                remedy upon notification by Lender. 

            
	 	 

    

    
      	
              8

            	
              Breach
                of Contract

            
	 	 
	
              8.1

            	
              In
                the event that Borrower fails to repay the principal or interest
                in full
                in a timely fashion, or to use the proceeds of the Loan as set forth
                in
                this Contract, Lender has the right to use the overdue penalty interest
                rate and appropriate penalty interest rate to calculate the
                interest.

            
	 	 
	
              8.2

            	
              In
                the event that Borrower fails to repay the principal or interest
                in full
                in a timely fashion, Borrower shall be liable for the Lender’s expenses in
                exercising its creditor’s rights, including litigation cost (arbitration
                fee), costs of preservation of asset, costs of publication, enforcement
                costs, legal fees, travel and other expenses. 

            
	 	 

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              8.3

            	
              In
                the event that Borrower avoids Lender’s supervision, fails to repay the
                principal or the interest of the Loan or avoids the repayment
                intentionally, Lender has the right to inform relevant government
                authority and to publish the payment notification in the news
                media.

            
	 	 
	
              9

            	
              Withdrawal
                Instruction

            
	 	 
	
              9.1

            	
              In
                the event that Borrower is overdue in payment in respect of principal,
                interest, penalty interest, compound interest or other expenses,
                Lender is
                authorized to withdraw the money from any other bank accounts of
                Borrower
                with Bank of Communication to setoff the said outstanding payment.
                

            
	 	 
	
              9.2

            	
              After
                the aforesaid withdrawal, Lender shall inform the Borrower of such
                account
                number, loan contract reference number, promissory note reference
                number,
                amount of withdrawal, and the outstanding Loan amount. 

            
	 	 
	
              9.3

            	
              If
                the amount of withdrawal is not sufficient to setoff the aforesaid
                payment, the overdue expenses shall be settled first. If the principal
                and
                interest are overdue for less than ninety (90) days, the remaining
                balance
                shall be first used to settle the overdue interest, penalty interest
                and
                compound interest, then shall be used to settle the overdue principal.
                In
                the event that the overdue payment or interest is overdue for more
                than
                ninety (90) days, the remaining balance shall be used to settle the
                overdue principal, then shall be used to settle the overdue interest,
                penalty interest or compound interest. 

            
	 	 
	
              9.4

            	
              If
                the currency of the aforesaid withdrawal amount is different from
                the
                currency of the Loan, the exchange rate determined by Bank of
                Communication on the date of withdrawal shall be used for the currency
                conversion calculation. 

            
	 	 
	
              10

            	
              Dispute
                Resolution

            
	 	 
	
              10.1

            	
              Any
                dispute arising from or in connection with this Contract shall be
                resolved
                by the first method listed below:

            

    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

       

       

    

    
      	
              1.

            	
              File
                a lawsuit to the competent court in the place where Lender is located;
                or
                

            
	 	 
	
              2.

            	
              Submit
                the disputes to _____________________ arbitration committee for
                arbitration in accordance with the currently effective arbitration
                rules
                of such committee. The arbitral award is final and is legally binding
                upon
                both Parties. 

            
	 	 

    

    
      	
              11

            	
              Miscellaneous

            
	 	 
	
              11.1

            	
              This
                Contract comes into effect upon both Parties’ execution of this
                contract.

            
	 	 
	
              11.2

            	
              This
                Contract is executed in Four
                (4) counterparts. Each of the Parties and Guarantor shall keep one
                counterpart. 

            

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Contract as of the day and year first set
      forth below.

     

    
      	
              April
                27, 2005 

            	
              April
                27, 2005 

            
	 	 
	
              Borrower
                (seal):

            	
              Lender
                (seal):

            
	 	 
	 	 
	
              Legal
                Representative or Authorized Person

            	
              Responsible
                Person or Authorized Person

            
	 	 
	
              Xiaoan
                He

            	
              Bank
                of Communication

            
	 	 
	 	 
	
              (signature
                or seal)

            	
              (signature
                or seal)

            

    

    

    -9-

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