EXHIBIT 10.8

THIS SECURED DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE
(COLLECTIVELY, THE “SECURITIES”), HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE.  THE
SECURITIES MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER
THE ACT OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER
SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS
ARE AVAILABLE.

SECURED DEBENTURE

XINHUA CHINA LTD

2% Secured Convertible Debenture

Due November 22, 2010

No.  HHF-001

US$1,250,000

          This Secured Debenture (the “Debenture”) is issued on November 23,
2005 (the “Closing Date”) by Xinhua China Ltd, a Nevada corporation (the
“Company”), to Highgate House Funds, Ltd. (together with its permitted
successors and assigns, the “Holder”) pursuant to exemptions from registration
under the Securities Act of 1933, as amended, pursuant to a Securities Purchase
Agreement, dated November 23, 2005 (the “Securities Purchase Agreement”) among
the Company and Buyer(s) listed on Schedule I hereto.

ARTICLE I.

          Section 1.01     Principal and Interest.  For value received, the
Company hereby promises to pay to the order of the Holder on the date November
22, 2010 (“Maturity Date”), in lawful money of the United States of America and
in immediately available funds the principal sum of One Million Two Hundred
Fifty Thousand Dollars ($1,250,000), together with interest on the unpaid
principal of this Debenture at the rate of two percent (2%) per year (compounded
monthly) from the date of this Debenture until paid.  At the Holder’s option,
the entire principal amount and all accrued interest hereof shall be either (a)
paid to the Holder on the Maturity Date or (b) converted in accordance with
Section 1.02 herein. 

          Section 1.02    Optional Conversion.  The Holder is entitled, at its
option, to convert, and sell on the same day, at any time and from time to time,
until payment in full of this Debenture, all or any part of the principal amount
of the Debenture, plus accrued interest, into shares (the “Conversion Shares”)
of the Company’s common stock, par value $.00001 per share (“Common Stock”), at
the lesser of: (i) $3.50 (the “Fixed Price”); or (ii) One Hundred

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Percent (100%) of the average of the three (3) lowest Closing Bid Prices per
share of the Common Stock during the forty (40) trading days immediately
preceding the date of conversion (the “Future Price”) (the “Conversion Price”);
provided, however, that the aggregate maximum number of shares of Common Stock
that this Convertible Debenture may be converted into shall be Ten Million
(10,000,000) shares of Common Stock (the “Maximum Conversion”); and further
provided, however, that upon the Maximum Conversion, the Company shall, at its
option (a) increase the Maximum Conversion or (b) redeem the unconverted amount
of all of the Convertible Debentures in whole at one hundred thirty five percent
(135%) of the unconverted amount of such Convertible Debentures being redeemed
plus accrued interest thereon.  Notwithstanding anything contained herein to the
contrary, if an Event of Default as defined in Section 3.01 hereof is continuing
the Holder is entitled, at its option, to convert, and sell on the same day, at
any time from time to time, until payment in full of this Debenture, all or any
part of the principal amount of the Debenture, plus accrued interest, into
Conversion Shares at a price per share equal to twenty percent (20%) of the
Fixed Price (the “Default Conversion Price”).  For purposes of determining the
“Closing Bid Price” on any day, reference shall be to the closing bid price for
a share of Common Stock on such date on the OTCBB (or such other exchange,
market, or other system that the Common Stock is then traded on), as reported on
Bloomberg, L.P. (or similar organization or agency succeeding to its functions
of reporting prices).  No fraction of shares or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable shall be
rounded to the nearest whole share.  To convert this Debenture, the Holder
hereof shall deliver written notice thereof, substantially in the form of
Exhibit A to this Debenture, with appropriate insertions (the “Conversion
Notice”), to the Escrow Agent (as defined in the Securities Purchase Agreement),
if there is an Event of Default, the Company at its address as set forth herein
and the Transfer Agent (as defined in the Irrevocable Transfer Agent
Instructions) pursuant to the Irrevocable Transfer Agent Instructions.  The date
upon which the conversion shall be effective (the “Conversion Date”) shall be
deemed to be the date set forth in the Conversion Notice.  The Holder has the
right to convert this Debenture after the Maturity Date.  Except as otherwise
provided herein, the Company shall not have the right to object to the
conversion or the calculation of the applicable conversion price, absent
manifest error and the Escrow Agent, if there is an Event of Default, or the
Transfer Agent shall release the shares of Common Stock from escrow upon
notifying the Company of the conversion.  Any conversion of any portion of the
Debenture to Common Stock shall be deemed to be pre-payment of principal plus
accrued and unpaid interest, without any penalty, and shall be credited against
any future payments of principal and interest in the order that such payments
become due and payable.

          Section 1.03     Reservation of Common Stock.  As set forth in Section
6(c) of the Securities Purchase Agreement, the Company shall reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of this Debenture, that number of shares
of Common Stock equal to a multiple of five (5) times the number of shares of
Common Stock into which the Debenture is convertible from time to time based
upon the Conversion Price.  If at any time the Company does not have a
sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders within sixty
(60) days of that time for the sole purpose of increasing the number of
authorized shares of Common Stock.

          Section 1.04     Right of Redemption.  The Company at its option shall
have the right to redeem, with three (3) business days advance written notice
(the “Redemption Notice”), a

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portion or all outstanding convertible debenture.  The redemption price shall be
One Hundred Thirty Five percent (135%) (the “Redemption Price”) of the face
amount redeemed plus accrued interest.  The Company shall pay the Redemption
Price on all payments made pursuant to the Debenture, including payments made
before, on, or after the Maturity Date.

          Section 1.05     Registration Rights.  The Company is obligated to
register the resale of the Conversion Shares under the Securities Act of 1933,
as amended, pursuant to the terms of an Investor Registration Rights Agreement,
between the Company and Highgate House Funds, Ltd. of even date herewith (the
“Investor Registration Rights Agreement”).

          Section 1.06     Interest Payments.  The interest so payable shall be
paid at the time of maturity or conversion to the person in whose name this
Debenture is registered.  Interest shall be paid in cash (via wire transfer or
certified funds).  In the event of default, as described in Section 3.01
hereunder, the Holder may elect that the interest be paid in cash (via wire
transfer or certified funds) or in the form of Common Stock.  If paid in the
form of Common Stock, the amount of stock to be issued will be calculated as
follows: the value of the stock shall be the Closing Bid Price on:  (i) the date
the interest payment is due; or (ii) if the interest payment is not made when
due, the date the interest payment is made.  A number of shares of Common Stock
with a value equal to the amount of interest due shall be issued.  No fractional
shares will be issued; therefore, in the event that the value of the Common
Stock per share does not equal the total interest due, the Company will pay the
balance in cash.

          Section 1.07     Paying Agent and Registrar.  Initially, the Company
will act as paying agent and registrar.  The Company may change any paying
agent, registrar, or Company-registrar by giving the Holder not less than
ten (10) business days’ written notice of its election to do so, specifying the
name, address, telephone number and facsimile number of the paying agent or
registrar.  The Company may act in any such capacity.

          Section 1.08     Secured Nature of Debenture.  This Debenture is
secured by all of the assets and property of the Company as set forth on Exhibit
A to the Security Agreement dated the date hereof between the Company and
Highgate House Funds, Ltd. (the “Security Agreement”).

          Section 1.09     The Escrow Shares.  The Company shall deposit
20,000,000 shares of Common Stock with the Escrow Agent as “Escrow Shares.”  If
there is an Event of Default, upon receipt of the Conversion Notice from the
Holder, the Escrow Agent shall distribute the Conversion Shares to Holder
pursuant to this Debenture and the Securities Purchase Agreement including
Exhibit F thereto.

ARTICLE II.

          Section 2.01     Amendments and Waiver of Default.  The Debenture may
not be amended.  Notwithstanding the above, without the consent of the Holder,
the Debenture may be amended to cure any ambiguity, defect or inconsistency, or
to provide for assumption of the Company obligations to the Holder.

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ARTICLE III.

          Section 3.01     Events of Default.  An Event of Default is defined as
follows: (a) failure by the Company to pay amounts due hereunder on the Maturity
Date; (b) failure by the Company’s transfer agent to issue freely tradable
Common Stock to the Holder within five (5) days of the Company’s receipt of the
attached Conversion Notice from Holder; (c) failure by the Company to comply
with any other obligation in the Debenture, which is not cured by the Company
within twenty (20) days after notice is sent to the Company to cure such
noncompliance; (d) failure to comply with the terms of the Irrevocable Transfer
Agent Instructions (as defined in the Securities Purchase Agreement); (e) if the
Company files for relief under the United States Bankruptcy Code (the
“Bankruptcy Code”) or under any other state or federal bankruptcy or insolvency
law, or files an assignment for the benefit of creditors, or if an involuntary
proceeding under the Bankruptcy Code or under any other federal or state
bankruptcy or insolvency law is commenced against the Company; and (f) a breach
by the Company of its obligations under any of the Transaction Documents (as
defined in the Securities Purchase Agreement) where after notice of such breach
by the Holder such breach is not cured within twenty (20) days of the date of
such notice.  Upon the occurrence of an Event of Default, the Holder may, in its
sole discretion, (i) accelerate full repayment of all debentures outstanding and
accrued interest thereon at the Redemption Price and/or (ii) may, convert the
unpaid principal amount of this Debenture at the then Default Conversion Price. 
The failure of the Company to make Payments due under Section 1.06 shall also be
deemed as an Event of Default.  Upon an Event of Default, the Escrow Agent is
authorized and directed to release the Escrow Shares to the Buyer if requested
by the Buyer, without approval of the Company.  Upon an Event of Default, the
Holder, in addition to any other remedies, shall have the right (but not the
obligation) to convert this Debenture at any time after an Event of Default and
require the issuance of additional Escrow Shares pursuant to the Securities
Purchase Agreement and this Debenture.  In the event the Conversion Price is
reduced below $.95 pursuant to Article V hereof or otherwise, the Default
Conversion Price shall be reduced to a price equal to such Conversion Price. 

          Section 3.02     Failure to Issue Unrestricted Common Stock. As
indicated in Section 3.01, a breach by the Company of its obligations under the
Investor Registration Rights Agreement shall be deemed an Event of Default,
which if not cured within ten (10) days, shall entitle the Holder to accelerate
full repayment of all debentures outstanding and accrued interest thereon or,
notwithstanding any limitations contained in this Debenture and/or the
Securities Purchase Agreement, to convert all debentures outstanding and accrued
interest thereon into shares of Common Stock pursuant to Section 1.02 herein. 
The Company acknowledges that failure to honor a Conversion Notice shall cause
irreparable harm to the Holder. 

ARTICLE IV.

          Section 4.01     Rights and Terms of Conversion.  This Debenture, in
whole or in part, may be converted at any time following the First Closing Date
(as defined in the Securities Purchase Agreement), into shares of Common Stock
at a price equal to the Conversion Price as described in Section 1.02 above.

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          Section 4.02     Re-issuance of Debenture.  When the Holder elects to
convert a part of the Debenture, then the Company shall reissue a new Debenture
in the same form as this Debenture to reflect the new principal amount.

ARTICLE V.

          Section 5.01     Anti-dilution.  Adjustment of Fixed Conversion Price
or Future Price.  The Fixed Conversion Price or Future Price shall be adjusted
from time to time as follows:

                              (a)       Adjustment of Fixed Conversion Price and
Number of Shares upon Issuance of Common Stock.  If and whenever on or after the
Closing Date of this Debenture, the Company issues or sells, or is deemed to
have issued or sold, any shares of Common Stock (other than (i) Excluded
Securities (as defined herein) and (ii) shares of Common Stock which are issued
or deemed to have been issued by the Company in connection with an Approved
Stock Plan (as defined herein) or upon issuance, exercise or conversion of the
Other Securities (as defined herein)) for a consideration per share less than a
price (the “Applicable Price”) equal to the Fixed Conversion Price in effect
immediately prior to such issuance or sale, then immediately after such issue or
sale the Fixed Conversion Price then in effect shall be reduced to an amount
equal to such consideration per share, provided that in no event shall the Fixed
Conversion Price be reduced below $.00001.

                              (b)       Effect on Fixed Conversion Price of
Certain Events.  For purposes of determining the adjusted Fixed Conversion Price
under Section 5.01(a) above, the following shall be applicable:

                                        (i)        Issuance of Options.  If
after the date hereof, the Company in any manner grants any rights, warrants or
options to subscribe for or purchase Common Stock or convertible securities
(“Options”) and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion or exchange
of any convertible securities issuable upon exercise of any such Option is less
than the Fixed Conversion Price then in effect, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share.  For purposes of this Section 5.01(b)(i), the lowest price per share for
which one share of Common Stock is issuable upon exercise of such Options or
upon conversion or exchange of such convertible securities shall be equal to the
sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the granting or
sale of the Option, upon exercise of the Option or upon conversion or exchange
of any other convertible security other than this Debenture issuable upon
exercise of such Option.  No further adjustment of the Fixed Conversion Price
shall be made upon the actual issuance of such Common Stock or of such
convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such convertible
securities.

                                        (ii)      Issuance of Convertible
Securities.  If the Company in any manner issues or sells any convertible
securities after the Closing Date and the lowest price per share for which one
share of Common Stock is issuable upon the conversion or exchange thereof is
less than the Fixed Conversion Price then in effect, then such share of Common
Stock shall be

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deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such convertible securities for such price per
share.  For the purposes of this Section 5.01(b)(ii), the lowest price per share
for which one share of Common Stock is issuable upon such conversion or exchange
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the convertible security and upon conversion or
exchange of such convertible security.  No further adjustment of the Fixed
Conversion Price shall be made upon the actual issuance of such Common Stock
upon conversion or exchange of such convertible securities, and if any such
issue or sale of such convertible securities is made upon exercise of any
Options for which adjustment of the Fixed Conversion Price had been or are to be
made pursuant to other provisions of this Section 5.01(b), no further adjustment
of the Fixed Conversion Price shall be made by reason of such issue or sale.

                                        (iii)     Change in Option Price or Rate
of Conversion.  If the purchase price provided for in any Options, the
additional consideration, if any, payable upon the issue, conversion or exchange
of any convertible securities, or the rate at which any convertible securities
are convertible into or exchangeable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options
or convertible securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the number of shares of Common Stock
issuable upon conversion of this Debenture shall be correspondingly readjusted. 
For purposes of this Section 5.01(b)(iii), if the terms of any Option or
convertible security that was outstanding as of the Closing Date of this
Debenture are changed in the manner described in the immediately preceding
sentence, then such Option or convertible security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change.  No adjustment pursuant to this
Section 5.01(b) shall be made if such adjustment would result in an increase of
the Conversion Price then in effect.

                              (c)       Effect on Fixed Conversion Price of
Certain Events.  For purposes of determining the adjusted Fixed Conversion Price
under Sections 5.01(a) and 5.01(b), the following shall be applicable:

                                        (i)        Calculation of Consideration
Received.  If any Common Stock, Options or convertible securities are issued or
sold or deemed to have been issued or sold for cash, the consideration received
therefore will be deemed to be the net amount received by the Company
therefore.  If any Common Stock, Options or convertible securities are issued or
sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such consideration, except
where such consideration consists of marketable securities, in which case the
amount of consideration received by the Company will be the market price of such
securities on the date of receipt of such securities.  If any Common Stock,
Options or

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convertible securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the
amount of consideration therefore will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such Common Stock, Options or convertible securities, as the
case may be.  The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the holders of the Debenture
representing at least two-thirds of the shares of Common Stock issuable upon
conversion of the Debenture then outstanding.  If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the holders of the Debenture representing at least two-thirds of
the shares of Common Stock issuable upon conversion of the Debenture then
outstanding.  The determination of such appraiser shall be final and binding
upon all parties and the fees and expenses of such appraiser shall be borne by
the Company.

                                        (ii)      Integrated Transactions.  In
case any Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued for a consideration of
$.00001.

                                        (iii)     Treasury Shares.  The number
of shares of Common Stock outstanding at any given time does not include shares
owned or held by or for the account of the Company, and the disposition of any
shares so owned or held will be considered an issue or sale of Common Stock.

                                        (iv)    Record Date.  If the Company
takes a record of the holders of Common Stock for the purpose of entitling them
(1) to receive a dividend or other distribution payable in Common Stock, Options
or in convertible securities or (2) to subscribe for or purchase Common Stock,
Options or convertible securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                              (d)       Adjustment of Fixed Conversion Price
upon Subdivision or Combination of Common Stock.  If the Company at any time
after the date of issuance of this Debenture subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, any Fixed
Conversion Price or Future Price in effect immediately prior to such subdivision
will be proportionately reduced.  If the Company at any time after the date of
issuance of this Debenture combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, any Fixed Conversion Price or Future Price in effect
immediately prior to such combination will be proportionately and equitably
increased.  Any adjustment under this Section 5.01(d) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.

                              (e)       Distribution of Assets.  If the Company
shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
“Distribution”), at any

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time after the issuance of this Debenture, then, in each such case any Fixed
Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of business
on such record date, to a price determined by multiplying such Fixed Conversion
Price by a fraction of which (A) the numerator shall be the Closing Bid Price of
the Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Company’s
Board of Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the Closing Bid Price of the Common Stock on the trading
day immediately preceding such record date; and

                              (f)       Certain Events.  If any event occurs of
the type contemplated by the provisions of this Section 5.01 but not expressly
provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company’s Board of Directors will make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the
holders of the Debenture; provided, except as set forth in Section 5.01(d), that
no such adjustment pursuant to this Section 5.01(f) will increase the Fixed
Conversion Price as otherwise determined pursuant to this Section 5.01.

                              (g)       Notices.

                                        (i)        Immediately upon any
adjustment of the Fixed Conversion Price or Future Price, the Company will give
written notice thereof to the holder of this Debenture, setting forth in
reasonable detail, and certifying, the calculation of such adjustment.

                                        (ii)       The Company will give written
notice to the holder of this Debenture at least ten (10) days prior to the date
on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any dissolution or liquidation, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.

                              (h)       Definitions.

                                        (i)        “Approved Stock Plan” means
any employee benefit plan which has been approved by the Board of Directors of
the Company, pursuant to which the Company’s securities may be issued to any
employee, officer or director for services provided to the Company.

                                        (ii)       “Excluded Securities” means,
provided such security is issued at a price which is greater than or equal to
the arithmetic average of the Closing Bid Prices of the Common Stock for the ten
(10) consecutive trading days immediately preceding the date of issuance, any of
the following: (a) any issuance by the Company of securities in connection with
a strategic partnership or a joint venture (the primary purpose of which is not
to raise equity capital); and (b) any issuance by the Company of securities as
consideration for a merger or

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consolidation or the acquisition of a business, product, license, or other
assets of another person or entity.

                                        (iii)      “Other Securities” means
(i) those options and warrants of the Company issued prior to, and outstanding
on, the Closing Date, (ii) the shares of Common Stock issuable on exercise of
such options and warrants, provided such options and warrants are not amended
after the Closing Date and (iii) the shares of Common Stock issuable upon
conversion of this Debenture, or otherwise in connection with this Debenture.

                              (i)       Nothing in this Section 5.01 shall be
deemed to authorize the issuance of any securities by the Company in violation
of Section 5.02.

                              (j)       In the event an Event of Default has
occurred, the lesser of the then Conversion Price and the Default Conversion
Price shall be used for all calculations in Section 5.01(a) through (g).

          Section 5.02     Consent  of Holder to Sell Capital Stock or Grant
Security Interests.  So long as any of the principal of or interest on this
Debenture remains unpaid and unconverted, the Company shall not, without the
prior consent of the Holder (i) issue or sell any Common Stock or Preferred
Stock without consideration or for a consideration per share less than its fair
market value determined immediately prior to its issuance, (ii) issue or sell
any Preferred Stock, warrant, option, right, contract, call, or other security
or instrument granting the holder thereof the right to acquire Common Stock
without consideration or for a consideration per share less than such Common
Stock’s fair market value determined immediately prior to its issuance, (iii)
enter into any security instrument granting the holder a security interest in
any of the assets of the Company, or (iv) file any registration statement on
Form S-8.

ARTICLE VI.

          Section 6.01     Notice.  Notices regarding this Debenture shall be
sent to the parties at the following addresses, unless a party notifies the
other parties, in writing, of a change of address:

If to the Company:

Xinhua China Ltd

 

B-26F Oriental Kenzo, No. 48

 

Dongzhimenwai, Dongcheng District

 

Beijing, P.R. China  100027

 

Attention:          Henry Jung and Xianping Wang

 

Telephone:        86-10-84476951

 

Facsimile:         86-10-84477985

 

  

  

 

With a copy to:

Devlin Jensen, Barristers & Solicitors

 

P.O. Box 12077

 

555 W. Hastings St., Suite 2550

 

Vancouver, British Columbia

 

Canada  V6B 4N5

 

Attn:     Peter Jensen

 

Telephone:        (604) 684-2550

 

Facsimile:         (604) 684-0916

 

  

  

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If to the Holder:

Highgate House Funds, Ltd.

488 Madison Ave.

New York, NY  10022

Telephone:        (212) 400-6900

Facsimile:         (212) 400-6901

  

  

With a copy to:

Jason M. Rimland, Esq.
Gottbetter & Partners, LLP

488 Madison Avenue

New York, NY 10022

Telephone:        (212) 400-6900

Facsimile:         (212) 400-6901

  

          Section 6.02     Governing Law.  The parties hereto acknowledge that
the transactions contemplated by this Agreement and the exhibits hereto bear a
reasonable relation to the State of New York.  The parties hereto agree that the
internal laws of the State of New York shall govern this Agreement and the
exhibits hereto, including, but not limited to, all issues related to usury. 
Any action to enforce the terms of this Agreement or any of its exhibits shall
be brought exclusively in the state and/or federal courts situated in the County
and State of New York.  Service of process in any action by the Buyers to
enforce the terms of this Agreement may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, by commercial
overnight courier to the Company at its principal address set forth in this
Agreement.

          Section 6.03     Severability.  The invalidity of any of the
provisions of this Debenture shall not invalidate or otherwise affect any of the
other provisions of this Debenture, which shall remain in full force and effect.

          Section 6.04     Entire Agreement and Amendments.  This Debenture
represents the entire agreement between the parties hereto with respect to the
subject matter hereof and there are no representations, warranties or
commitments, except as set forth herein.  This Debenture may be amended only by
an instrument in writing executed by the parties hereto.

          Section 6.05     Counterparts.  This Debenture may be executed in
multiple counterparts, each of which shall be an original, but all of which
shall be deemed to constitute on instrument.

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          IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.

XINHUA CHINA LTD

  

By:       /s/ Henry Jung                                      

Name:  Henry Jung

Title:     Chief Financial Officer

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EXHIBIT A

NOTICE OF CONVERSION

(To be executed by the Holder in order to Convert the Debenture)

TO:

  

          The undersigned hereby irrevocably elects to convert
$                                                  of the principal amount of
the above Debenture into Shares of Common Stock of Xinhua China Ltd, according
to the conditions stated therein, as of the Conversion Date written below.

Conversion Date:

                                                                                               

Applicable Conversion Price:

                                                                                               

Signature:

                                                                                               

Name:

                                                                                               

Address:

                                                                                               

Amount to be converted:

$                                                                                             
 

Amount of Debenture unconverted:

$                                                                                             
 

Conversion Price per share:

$                                                                                             
 

Number of shares of Common Stock to be issued:

                                                                                               

Please issue the shares of Common Stock in the following name and to the
following address:

                                                                                               

Issue to:

                                                                                               

Authorized Signature:

                                                                                               

Name:

                                                                                               

Title:

                                                                                               

Phone Number:

                                                                                               

Broker DTC Participant Code:

                                                                                               

Account Number:

                                                                                               

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