Sample Business Contracts


Articles of Association - Weifang Neo-Luck (Group) Corp., Jimswood Investment and Development Inc. and Weicheng International Inc.


                            ARTICLES OF ASSOCIATION
                     WEIFANG FUHUA AMUSEMENT PARK CO., LTD.


                         CHAPTER 1 -- GENERAL PRINCIPLES

Article 1      In accordance with the Foreign Equity Joint Venture Law of the
               People's Republic of China (the "PRC") and pursuant to the
               Agreement signed by China Weifang Neo-Luck (Group) Company of
               Shandong Province ("Party A"), Jimswood Investment and
               Development Inc. of the United States ("Party B") and Weicheng
               International Inc. of the United States ("Party C") on August 17,
               1996 in Weifang, China for the purpose of establishing Weifang
               Fuhua Amusement Park Co., Ltd. (the "Joint Venture Company"),
               these Articles of Association ("Articles") are hereby
               established.

Article 2      The name of the Joint Venture Company shall be Weifang Fuhua
               Amusement Park Co., Ltd. Its English name is: WEI FANG FUHUA
               ENTERTAINMENT GARDEN CO., LTD. The legal address of the Joint
               Venture Company shall be East End of Dong Feng Street, Weifang,
               Shandong Province, PRC.

Article 3      The names, legal addresses and legal representatives of Parties
               A, B, and C of the Joint Venture Company:

               Party A:
               Name:                 Weifang Neo-Luck (Group) Corporation of
                                     Shandong Province
               Legal Address:        189 Dong Feng Street, Weifang
               Legal Representative: Jun Yin

               Party B:
               Name:                 Jimswood Investment and Development Inc. of
                                     the United States
               Legal Address:        Los Angeles, California, U.S.A.
               Legal Representative: Stanley Wu

               Party C:
               Name:                 Weicheng International Inc.
               Legal Address:        3079 Shabo Boulevard, Santa Ana,
                                     California, U.S.A.
               Legal Representative: Aiping Wang

Article 4      The Joint Venture Company shall be a limited liability company.

Article 5      The Joint Venture Company is a Chinese corporation and shall be
               governed and protected by Chinese law. All activities of the
               Joint Venture Company shall be in compliance with Chinese laws,
               statutes and other relevant rules and regulations.
<PAGE>
                   CHAPTER 2 -- PURPOSE AND SCOPE OF BUSINESS


Article 6      The objectives of the Joint Venture Company are facilitating the
               further development of tourism in Weifang City, making full use
               of the abundant local tourism resources, adopting scientific
               management practices, expanding and improving tourist-hosting
               capabilities, and achieving economic benefits satisfactory to
               Parties A, B and C, pursuant to the principles of enhanced
               cooperation and mutual benefit.

Article 7      The scope of operations of the Joint Venture Company shall
               include: golf courses, tennis courts, swimming pools, sauna
               rooms, gymnasiums, disco halls, guest rooms, bowling alleys,
               recreation rooms, tourist merchandise stores, restaurants, and
               beverage shops.

Article 8      The scale of operations of the Joint Venture Company shall be as
               follows: Construction shall be over a one-year period. Following
               completion of construction and the subsequent test period, a
               normal annual operating revenue of RMB 57,900,000 and a profit of
               RMB 14,160,000 are to be realized.

              CHAPTER 3 -- TOTAL INVESTMENT AND REGISTERED CAPITAL

Article 9      Total investment in the Joint Venture Company shall be USD
               $29,500,000. The registered capital of the Joint Venture Company
               shall be USD $20,700,000, of which Party A shall contribute USD
               $9,315,000, comprising 45% of the total registered capital, Party
               B shall contribute USD $5,175,000, comprising 25% of the total
               registered capital, and Party C shall contribute USD $6,210,000,
               comprising 30% of the total registered capital.

Article 10     Method of capital contribution: The capital contribution of Party
               A shall be in RMB and some cash in foreign currency, which shall
               be used mainly for acquisition of land, construction of
               supporting facilities, and the purchase of materials from within
               the PRC; Party B and Party C shall contribute capital in United
               States currency, which shall be used mainly for acquisition of
               technically advanced equipment, a portion of the materials used
               for decoration, a portion of the office supplies, etc.

Article 11     Parties A, B and C shall make their respective capital
               contributions in full according to the time limit stipulated in
               the Agreement.

Article 12     After Parties A, B and C have made their respective capital
               contributions, the Joint Venture Company shall invite an
               accountant registered in China to verify the contributions and
               issue a verification report, on the basis of which the Joint
               Venture Company shall then issue investment certificates. The
               investment certificates shall include the name of the Joint
               Venture Company, date of establishment of the Joint Venture
               Company, names of the Parties, the amounts

<PAGE>
               and dates of their respective capital contributions, and the date
               of issuance of investment certificates.

Article 13     During the term of the Joint Venture, the amount of the Joint
               Venture Company's registered capital shall not be reduced.

Article 14     Should any Party to the Joint Venture Company wish to transfer
               all or part of its investment to any third party, consent shall
               be obtained in advance from the other two Parties. Should one
               Party wish to transfer its investment, the other two Parties
               shall have first right of refusal.

Article 15     Unanimous approval by the Board of Directors is required for any
               increase or transfer of the Joint Venture Company's registered
               capital. Subsequently, such increase or transfer shall be
               submitted to the original examination and approval authority for
               approval. Then the registration shall be changed at the State
               Administration of Industry and Commerce.

                         CHAPTER 4 -- BOARD OF DIRECTORS

Article 16     The Joint Venture Company shall establish a Board of Directors,
               which shall be the highest authority of the Joint Venture
               Company.

Article 17     The Board of Directors shall make decisions on all major issues
               concerning the Joint Venture Company. Its powers shall include
               the following: to decide on and approve recommendations made by
               the General Manager with regard to appointment and removal of
               personnel and major reports (on matters such as the volume of
               operating revenues and expenditures and the annual profit
               distribution plan); to pass the Joint Venture Company's important
               rules and policies; to decide on the termination of the Joint
               Venture or a merger with another commercial entity; to decide the
               hiring of the General Manager, Assistant General Managers, Chief
               Engineer, Chief Accountant, Chief Economist and other top
               officers; to be in charge of the liquidation process upon
               termination of the Joint Venture or expiration of its term.

Article 18     The Board of Directors shall consist of six (6) members, among
               whom three (3) shall be appointed by Party A, two (2) by Party B
               and one (1) by Party C. The term of office for each Director
               shall be four (4) years and each Director shall be eligible for
               consecutive terms.

Article 19     The Chairman of the Board of Directors shall be appointed by
               Party A and the Vice-Chairman shall be appointed by Party B.

Article 20     When Parties A, B and C intend to appoint or replace any
               Directors, a written notice shall be submitted to the Board of
               Directors one (1) month in advance.

Article 21     The Board of Directors shall convene two regular meetings each
               year. Interim meetings may be convened under important
               circumstances and upon motion of a

<PAGE>
               Director. In principle, Board meetings shall be held in the area
               of the Joint Venture Company. If necessary, Board meetings can be
               held in the U.S. or other locations away from the Joint Venture
               Company.

Article 22     Board meetings shall be called and presided over by the Chairman
               of the Board. Should the Chairman be absent, Board meetings shall
               be called and presided over by the Vice-Chairman.

Article 23     The Chairman shall provide each Director with a written notice at
               least thirty (30) days before the date of a Board meeting. The
               notice shall contain the agenda, time and location of the
               meeting. Should a Director, with cause, be unable to attend a
               meeting, the Director may appoint, in writing, a proxy to attend
               the meeting.

Article 24     Detailed minutes of every Board meeting shall be recorded and
               signed by all of attending Directors and proxies. The minutes
               shall be written in the Chinese language and kept in the files of
               the Joint Venture Company.

Article 25     Unanimous approval by the Board of Directors shall be required
               for the following matters: any changes to the Articles of
               Association; re-organization, termination or dissolution of the
               Joint Venture Company; increase, transfer or mortgaging of the
               registered capital of the Joint Venture Company; merger of the
               Joint Venture Company with another commercial entity; other
               important matters.

                        CHAPTER 5 -- MANAGEMENT STRUCTURE

Article 26     The Joint Venture Company shall establish within itself such
               departments as trade, technology, finance, food and beverage, and
               general affairs.

Article 27     The Joint Venture Company shall have one (1) General Manager and
               two (2) Assistant General Managers. A Director may serve
               concurrently as the General Manager or one of the Assistant
               General Managers, who shall be recommended by Party A and
               appointed by the Board of Directors.

Article 28     The General Manager shall be directly accountable to the Board of
               Directors. The General Manager shall carry out the Board's
               resolutions as well as organize and conduct the daily operations
               and management of the Joint Venture Company. Assistant General
               Managers shall assist the General Manager. At such times as the
               General Manager expects to be absent from the Company's
               operations, one of the Assistant General Managers shall be
               designated to exercise the powers and discharge the
               responsibilities of the General Manager during the absence of the
               General Manager.

Article 29     Decisions on major issues in the daily operations of the Joint
               Venture Company shall take effect only when signed jointly by the
               General Manager and Assistant General Managers. Issues needing
               co-signatures shall be specified by the Board of Directors.

<PAGE>
Article 30     The General Manager and Assistant General Managers shall serve a
               term of three (3) years and may be re-appointed to consecutive
               terms by the Board.

Article 31     The Joint Venture Company shall have one Chief Engineer, one
               Chief Accountant and one Chief Economist, who shall be appointed
               by the Board and shall be led by the General Manager.

Article 32     The General Manager, Assistant General Managers, Chief Engineer,
               Chief Accountant, Chief Economist and other top officers who wish
               to resign their post shall submit a written report to the Board
               of Directors two (2) months in advance. In case of graft or
               serious dereliction of duty by any one of the above officers,
               such persons may be removed at any time through a resolution by
               the Board of Directors. Any such person who commits a criminal
               offense shall be subject to criminal investigation and
               prosecution.

                       CHAPTER 6 -- FINANCE AND ACCOUNTING

Article 33     The finance and accounting of the Joint Venture Company shall
               conform to rules under the Finance and Accounting System for
               Sino-Foreign Joint Ventures established by the Ministry of
               Finance of the People's Republic of China.

Article 34     The Joint Venture Company's fiscal year shall coincide with the
               calendar year, beginning on January 1 and ending on December 31.

Article 35     All accounting vouchers, documents, accounting books and
               financial statements shall be written in the Chinese language.
               The RMB shall be the standard accounting currency. The conversion
               of RMB into other currencies shall be based upon the exchange
               rate published on the date of such conversion by the State
               Administration of Foreign Exchange of the PRC.

Article 36     The Joint Venture Company shall adopt the internationally
               prevalent accrual method and debit-credit system in its
               accounting.

Article 37     The Joint Venture Company's accounting books shall record the
               following items: A. All cash income and expense amounts of the
               Joint Venture Company; B. All sales and purchases of goods by the
               Joint Venture Company; C. The Joint Venture Company's registered
               capital and liabilities; D. Pay in dates of registered capital of
               the Joint Venture Company as well as increases and transfers of
               same.

Article 38     Within the first three months of each fiscal year, the Joint
               Venture Company's finance department shall compile the previous
               fiscal year's balance sheet and income statement which, after
               they have been examined and signed by an accountant registered in
               China, shall be submitted to the Board of Directors for approval.

<PAGE>
Article 39     The Joint Venture Company shall decide the number of years over
               which its fixed assets shall be depreciated, pursuant to the
               Enforcement Provisions of the Income Tax Law for Sino-Foreign
               Joint Ventures of the PRC.

Article 40     All foreign exchange-related issues of the Joint Venture Company
               shall be resolved pursuant to the Interim Foreign Exchange Rules
               of the PRC, other related regulations, and provisions under the
               Joint Venture Agreement.

                        CHAPTER 7 -- PROFIT DISTRIBUTION

Article 41     The Joint Venture Company shall allocate certain amounts from its
               after-tax profits to a reserve fund, an enterprise development
               fund, and an employees benefit fund and bonus fund, the annual
               allocation rate of which shall be determined by the Board of
               Directors

Article 42     After paying income taxes and allocating the various funds in
               accordance with law, the remaining profits shall be distributed
               in proportion to Parties A, B and C's contributions to registered
               capital.

Article 43     The Joint Venture Company's profits shall be distributed
               annually. The profit distribution plan and amount of profit
               distributed to each Party for each fiscal year shall be published
               within the first three months following that fiscal year.

Article 44     The Joint Venture Company shall not distribute profits unless the
               losses of the previous fiscal year have been covered.
               Undistributed profits from the previous fiscal year may be
               distributed together with that of the current fiscal year.

                             CHAPTER 8 -- EMPLOYEES

Article 45     The handling of the recruitment, appointment, dismissal of and
               resignation by employees of the Joint Venture Company and such
               matters as their salaries, benefits, labor insurance, labor
               protection and labor discipline shall be in compliance with the
               PRC's Labor Management Regulations for Sino-Foreign Equity Joint
               Ventures and the Enforcement Regulations for same.

Article 46      Employees needed by the Joint Venture Company may be recruited
               locally through a competitive selection process. The Joint
               Venture Company has the right to take proper disciplinary action
               against any employee who violates the regulations and labor
               discipline of the Joint Venture Company. The most serious
               offenders may be dismissed.

Article 47     Employees' salaries shall be determined by the Board of Directors
               according to the particular circumstances of the Joint Venture
               Company and with reference to applicable regulations in China,
               and shall be specified in labor contracts.

               Employees' salaries shall be raised as is appropriate in the
               light of expanded production and operations and improved employee
               skills and technical abilities.
<PAGE>
Article 48     Such matters as employee benefits, bonuses, labor protection and
               labor insurance shall be addressed in various policies of the
               Joint Venture Company so as to ensure a normal production and
               working environment for employees.

                            CHAPTER 9 -- TRADE UNION

Article 49     The Joint Venture Company shall have the right to establish a
               trade union and carry out union activities in accordance with
               Trade Union Law of the PRC and applicable regulations.

Article 50     The Joint Venture Company trade union represents the interest of
               employees. Its obligations are: to uphold the democratic rights
               and material interests of employees in accordance with the law;
               to assist the Joint Venture Company in arranging and properly
               utilizing benefit and bonus funds; to organize political,
               professional and technical studies by employees; to organize
               literary, artistic and sports activities; and to educate
               employees about observing labor discipline and striving to
               fulfill the commercial objectives of the Joint Venture.

Article 51     The Joint Venture Company trade union shall sign labor contracts
               with the Joint Venture Company on behalf of employees and shall
               monitor compliance with the contracts.

Article 52     The Joint Venture Company trade union shall take part in the
               mediation of disputes arising between employees and the Joint
               Venture Company.

Article 53     The Joint Venture Company shall each month contribute funds equal
               to 2% of actual total employee salaries to the trade union. The
               Joint Venture Company trade union shall use the funds in
               accordance with the Rules for the Management of Trade Union Funds
               established by the China National Federation of Trade Unions.

                CHAPTER 10 -- TERM, TERMINATION, AND LIQUIDATION

Article 54     The term of the Joint Venture Company shall be fifteen (15)
               years, which shall begin on the date of issuance of its business
               license.

Article 55     When Parties A, B and C all agree on an extension of the term of
               the Joint Venture, and when such extension has been approved by a
               resolution of the Board of Directors, the Joint Venture Company
               shall submit a written application to the original examination
               and approval authorities six (6) months prior to the expiration
               of the term of the Joint Venture. Only upon approval may the term
               be extended. At that time the Joint Venture Company shall go
               through necessary formalities to change the registration at the
               State Administration of Industry and Commerce.
<PAGE>
Article 56     The Joint Venture Company may be terminated before the expiration
               of its term if Parties A, B and C are in unanimous agreement that
               such early termination of the Joint Venture shall be in the best
               interest of all Parties. The Board must convene a general meeting
               to decide in favor of early termination, and such decision must
               be submitted to the original examination and approval authorities
               for approval.

Article 57     In the event of material losses caused by one Party's failure to
               perform its obligations under the Agreement and the Articles of
               Association, or such Party commits a serious breach of the
               Agreement, the other two Parties may claim for compensation.

Article 58     Upon expiration or early termination of the term of the Joint
               Venture, the Board of Directors shall establish procedures and
               principles for its liquidation, shall nominate candidates for a
               liquidation committee, and shall form the liquidation committee
               so as to liquidate the assets of the Joint Venture Company.

Article 59     Liquidation expenses shall receive priority in payments from the
               existing assets of the Joint Venture Company. Any remaining
               assets, after the payment of all debts of the Joint Venture
               Company, shall be distributed among Parties A, B and C in
               proportion to each Party's contribution to the registered
               capital.

Article 60     After the liquidation has been completed, the Joint Venture
               Company shall file a report with the original examination and
               approval authorities, cancel its registration with the State
               Administration of Industry and Commerce, return its business
               license and make an announcement to the public.

Article 61     After the termination of the Joint Venture Company, its
               accounting books shall be left in the care of Party A.

                       CHAPTER 11 -- RULES AND REGULATIONS

Article 62     The Joint Venture Company establishes, through the Board of
               Directors, the following rules and regulations:

                 1.  Management regulations;
                 2.  Employee regulations;
                 3.  Wage policies;
                 4.  Rules on employee attendance, promotion, and rewards and
                     penalties;
                 5.  Employee benefits rules;
                 6.  Financial regulations;
                 7.  Liquidation procedures upon dissolution of the Company;
                 8.  Other necessary rules and regulations.

                      CHAPTER 12 -- SUPPLEMENTARY ARTICLES

Article 63     Any amendment to these Articles of Association shall require
               unanimous agreement by the Board of Directors and shall be
               submitted to the original examination and approval authority for
               approval.


<PAGE>
Article 64     These Articles of Association shall be written in the Chinese
               language.

Article 65     These Articles of Association shall enter into effect only upon
               approval by the Foreign Economic Relations and Trade Commission
               of Weifang City, Shandong Province, the PRC.

Article 66     These Articles of Association are signed on October 8, 1996 by
               authorized representatives of Parties A, B and C in Weifang,
               China.


Party A:         Weifang Neo-Luck (Group) Co. Ltd. of Shandong Province
Representative:  (Signature illegible)


Party B:         Jimswood Investment and Development (US) Inc.
Representative:  (Signature illegible)



Party C:         Weicheng International (US) Inc.
Representative:  Aiping Wang

                                                           Date: January 8, 1997


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