Document:

EXHIBIT 10.32

              AMENDED UNDERSTANDING BETWEEN TENGTU CHINA AND TENGTU
                INTERNATIONAL CORP. GOVERNING ACTIVITIES IN CHINA
             RELATING TO OPERATION MORNING SUN, NATIONAL CENTRE FOR
              AUDIO/VISUAL EDUCATION AND THE MINISTRY OF EDUCATION

1. All activities of Tengtu China, investments, agreements, contracts and
undertakings entered into with the Ministry of Education for the purposes of
Operation Morning Sun, NCAVE, China Broadband Education Resources Centre, Local
Broadband Education Resources Centres and as otherwise contemplated in the
understandings with the Ministry, will be conducted on behalf of TIC and TUC
according to the joint venture agreement.

2. Tengtu China will operate in these activities as the joint- venture partner
of TIC and all investments and revenues will be accounted for under the joint
co-operation and management of Tengtu China and Tengtu International Corp., its
controller and auditors. Tengtu China and TIC will establish systematic
reporting and access to the accounts established for the business activities
related to the Ministry of Education initiatives. This is most important for
purposes of complying with the SEC Audit Regulations.

3. Tengu's partnership in the China Education Resources Centre will be
understood to be the interest held by Tengtu China, and its affiliated
companies, on behalf of the TUC joint-venture, pursuant to the May 22, 2002
Cooperation Agreement with NCAVE. Of the percentage held by Tengtu China, and
its affiliated companies (the "TTC Interest"), 57% will be held for and assigned
to TIC(the "TIC Interest") .

4. It is the understanding of TC and TIC that both TUC parties will work towards
consolidating the joint-venture into a single operating and incorporated entity
as soon as conditions are favorable and compliance of such an undertaking can be
met under the respective jurisdictions. In the meantime, both TC and TIC will
operate on behalf of and in the interests of the TUC joint- venture, its
partners and investors.

5. TIC agrees to raise 80 Million RMB which is the planned initial capital
needed for the "Morning Sun Broadband Education Resources Centre" project to be
established jointly with the NCAVE of the Ministry of Education of China. The 80
Million RMB shall be an equity contribution to the project and shall not be a
loan from TIC to TC. In the event that TIC fails to raise 80 Million RMB by
December 31, 2003, the TIC Interest will be reduced by a percentage equal to 80
Million RMB minus the amount raised by TIC, divided by 80 Million RMB (the
"Reduction Percentage"). At no time shall TIC's interest in the China Broadband
Education Resources Centre exceed the TIC Interest minus the Reduction
Percentage

<PAGE>

BEIJING TENGTU CULTURE &                  TENGTU INTERNATIONAL CORP.
EDUCATION ELECTRONCIS
DEVELOPMENT CO., LTD.

By its shareholders:                                By:_________________________
                                                       John Watt, President
Beijing Jiade Tengtu Technology Group
Co. Ltd and Beijing Oriental Tai He
Technology Development Co., Ltd.

By:______________________________
           FanQi Zhang

BEIJING TENGTU TIANDI NETWORK
CO., LTD.

By its shareholders:

Beijing Jiade Tengtu Technology Group
Co. Ltd and Beijing Oriental Tai He
Technology Development Co., Ltd.

By:______________________________
           FanQi Zhang

Amended and restated as of April 25, 2001

<PAGE>Exhibit 10.1
                                                                    ------------

                                 PROMISSORY NOTE

U.S. $60,000.00                                                  March 31, 2002

                  FOR VALUE RECEIVED, the undersigned, David I. Brunson (the
"Maker"), HEREBY PROMISES TO PAY to the order of North Atlantic Trading Company,
Inc. (together with any successor in interest or assignee thereof, the "Payee")
at its offices located at 257 Park Avenue South, New York, New York, 10010-7304,
or at such other place as Payee or any holder hereof may from time to time
designate to Maker in writing, in immediately available funds the principal sum
of SIXTY THOUSAND UNITED STATES DOLLARS ($60,000.00), plus accrued interest as
provided herein, in lawful money of the United States, in accordance with the
terms hereafter set forth.

                  Interest shall accrue on the unpaid principal balance hereof
at the fixed rate equal to five percent (5%) per annum from the date hereof
until paid in full and shall be payable in cash on each anniversary of the date
hereof. The outstanding principal amount of this Note, together with all accrued
and unpaid interest thereon shall, unless sooner accelerated, be due and payable
in full on March 31, 2008 or on the following business day if any such date is
not a business day. Interest hereunder shall be computed on the basis of the
actual number of days elapsed over the period of a 365-day year. Maker hereby
waives diligence, demand, presentment, protest and notice, and assents to
extensions of time of payments, releases, surrender or substitution of security,
or forbearance or other indulgence, without notice.

                  All payments shall be applied first to accrued and unpaid
interest hereunder and then to the principal balance hereof. If the Maker shall
default in the punctual payment of any sum payable hereunder whether or not
notice of such default is given, then: (i) all amounts outstanding under this
Note shall become immediately due and payable without any further notice by
Payee; and (ii) the unpaid principal balance outstanding at such date shall bear
interest at the rate equal to seven percent (7%) per annum; provided, however,
that in no case shall the rate of interest exceed the maximum amount permitted
by applicable law. The rights and remedies referred to above shall be
cumulative, nonexclusive and enforceable alternatively, successively and
concurrently. Maker acknowledges and agrees that its obligation to pay principal
and interest hereunder shall not be subject to any counterclaims, offsets or
defenses against Payee or any holder of this Note that are presently existing or
which may arise in the future.

                  This Note may be prepaid at any time, in whole or in part, at
Maker's option, and shall become due and payable in full within sixty (60) days
after Maker ceases to be employed by the Payee or any of its subsidiaries. Any
prepayment shall be made without premium or penalty, and any such prepayment
shall be applied and credited first to any accrued and unpaid interest hereunder
to the date of such prepayment and the balance, if any, to the reduction of the
principal amount hereof.

                  This Note shall supercede any and all promissory notes (the
"Original Notes") issued by the Maker to Payee in respect of the loan made by
the Payee to the Maker in the principal amount of $60,000.00. Each of the
Original Notes is hereby cancelled and discharged and shall be of no further
force or effect.

                  If, after the due date for the payment of any principal or
interest hereunder, this Note is referred to an attorney for collection, Maker

<PAGE>

shall be liable for attorneys' fees and expenses and other expenses and costs of
collection.

                  Maker hereby irrevocably consents to the jurisdiction of the
courts of the State of New York and the courts of the United States of America
located in the State of New York in connection with any action or proceeding
arising out of or related to this Note.

                  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
                  WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
                  TO THE CONFLICT OF LAW PRINCIPLES THEREOF, AND SHALL BE
                  BINDING UPON THE SUCCESSORS AND ASSIGNS OF MAKER AND SHALL
                  INURE TO THE BENEFIT OF PAYEE, ITS SUCCESSORS, ENDORSEES AND
                  ASSIGNS.

                  This Note may not be changed, modified or terminated orally,
but only by an agreement in writing signed by the party to be charged. No
extension of the date on which payment is due shall be effective unless signed
by Payee.

                  If any term or provision of this Note shall be invalid,
illegal or unenforceable, the validity of all other terms and provisions hereof
shall in no way be affected.

                  IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS NOTE,
                  MAKER WAIVES (TO THE EXTENT PERMITTED BY LAW) THE RIGHT TO A
                  TRIAL BY JURY, ALL RIGHTS OF SET-OFF AND RIGHTS TO INTERPOSE
                  COUNTERCLAIMS AND CROSS-CLAIMS (UNLESS SUCH SET-OFF,
                  COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY
                  APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
                  PLEADED OR ALLEGED IN ANY OTHER ACTION) AND THE DEFENSES OF
                  FORUM NON CONVENIENS AND IMPROPER VENUE.

                                            By: /s/ David I. Brunson
                                                -------------------------
                                                Name: David I. Brunson

                                       2Exhibit 10.2
                                                                    ------------

                                 PROMISSORY NOTE

U.S. $35,000.00                                                   March 31, 2002

                  FOR VALUE RECEIVED, the undersigned, Chris Kounnas (the
"Maker"), HEREBY PROMISES TO PAY to the order of North Atlantic Trading Company,
Inc. (together with any successor in interest or assignee thereof, the "Payee")
at its offices located at 257 Park Avenue South, New York, New York, 10010-7304,
or at such other place as Payee or any holder hereof may from time to time
designate to Maker in writing, in immediately available funds the principal sum
of THIRTY-FIVE THOUSAND UNITED STATES DOLLARS ($35,000.00), plus accrued
interest as provided herein, in lawful money of the United States, in accordance
with the terms hereafter set forth.

                  Interest shall accrue on the unpaid principal balance hereof
at the fixed rate equal to five percent (5%) per annum from the date hereof
until paid in full and shall be payable in cash on each anniversary of the date
hereof. The outstanding principal amount of this Note, together with all accrued
and unpaid interest thereon shall, unless sooner accelerated, be due and payable
in full on March 31, 2008 or on the following business day if any such date is
not a business day. Interest hereunder shall be computed on the basis of the
actual number of days elapsed over the period of a 365-day year. Maker hereby
waives diligence, demand, presentment, protest and notice, and assents to
extensions of time of payments, releases, surrender or substitution of security,
or forbearance or other indulgence, without notice.

                  All payments shall be applied first to accrued and unpaid
interest hereunder and then to the principal balance hereof. If the Maker shall
default in the punctual payment of any sum payable hereunder whether or not
notice of such default is given, then: (i) all amounts outstanding under this
Note shall become immediately due and payable without any further notice by
Payee; and (ii) the unpaid principal balance outstanding at such date shall bear
interest at the rate equal to seven percent (7%) per annum; provided, however,
that in no case shall the rate of interest exceed the maximum amount permitted
by applicable law. The rights and remedies referred to above shall be
cumulative, nonexclusive and enforceable alternatively, successively and
concurrently. Maker acknowledges and agrees that its obligation to pay principal
and interest hereunder shall not be subject to any counterclaims, offsets or
defenses against Payee or any holder of this Note that are presently existing or
which may arise in the future.

                  This Note may be prepaid at any time, in whole or in part, at
Maker's option, and shall become due and payable in full within sixty (60) days
after Maker ceases to be employed by the Payee or any of its subsidiaries. Any
prepayment shall be made without premium or penalty, and any such prepayment
shall be applied and credited first to any accrued and unpaid interest hereunder
to the date of such prepayment and the balance, if any, to the reduction of the
principal amount hereof.

                  This Note shall supercede any and all promissory notes (the
"Original Notes") issued by the Maker to Payee in respect of the loan made by
the Payee to the Maker in the principal amount of $35,000.00. Each of the
Original Notes is hereby cancelled and discharged and shall be of no further
force or effect.

                  If, after the due date for the payment of any principal or
interest hereunder, this Note is referred to an attorney for collection, Maker

<PAGE>

shall be liable for attorneys' fees and expenses and other expenses and costs of
collection.

                  Maker hereby irrevocably consents to the jurisdiction of the
courts of the State of New York and the courts of the United States of America
located in the State of New York in connection with any action or proceeding
arising out of or related to this Note.

                  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
                  WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
                  TO THE CONFLICT OF LAW PRINCIPLES THEREOF, AND SHALL BE
                  BINDING UPON THE SUCCESSORS AND ASSIGNS OF MAKER AND SHALL
                  INURE TO THE BENEFIT OF PAYEE, ITS SUCCESSORS, ENDORSEES AND
                  ASSIGNS.

                  This Note may not be changed, modified or terminated orally,
but only by an agreement in writing signed by the party to be charged. No
extension of the date on which payment is due shall be effective unless signed
by Payee.

                  If any term or provision of this Note shall be invalid,
illegal or unenforceable, the validity of all other terms and provisions hereof
shall in no way be affected.

                  IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS NOTE,
                  MAKER WAIVES (TO THE EXTENT PERMITTED BY LAW) THE RIGHT TO A
                  TRIAL BY JURY, ALL RIGHTS OF SET-OFF AND RIGHTS TO INTERPOSE
                  COUNTERCLAIMS AND CROSS-CLAIMS (UNLESS SUCH SET-OFF,
                  COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY
                  APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
                  PLEADED OR ALLEGED IN ANY OTHER ACTION) AND THE DEFENSES OF
                  FORUM NON CONVENIENS AND IMPROPER VENUE.

                                          By: /s/ Chris Kounnas
                                              -----------------------
                                              Name: Chris Kounnas

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]