Document:

Exhibit 10.38

                                    AGREEMENT

         THIS AGREEMENT is made as of this 12th day of February, 2004, by and
between TENGTU INTERNATIONAL CORP., a corporation incorporated in Delaware,
United States of America ("TIC"), and ZHOU LIYING, as the last wishes executor
of Fan Qi Zhang (the "Last Wishes Executor").

                              W I T N E S S E T H:

           WHEREAS, FanQi Zhang, died on October 24, 2003. He wrote his last
wishes on September 30, 2003 and the description on share distribution to TIC
and the Board of Directors of TUC on October 2, 2004.

         WHEREAS, pursuant to the terms of his last wishes and the description
on share distribution, Mr. Zhang directed that 15 million shares (the "Shares")
of TIC Common Stock ("Common Stock") to be received by him from TIC is to be
used by the Representative to "solve the funding difficulties of" TENGTU CHINA
COMPANIES; and

           WHEREAS, the Last Wishes Executor (Executor), capable of civil
responsibility, legally received Mr. Zhang's authorization and is fully
empowered under Chinese law to enter into this agreement and carry out its
terms; and

WHEREAS, pursuant to Article 2.3.2 in Share Purchase Agreement entered into
between BEIJING TENGTU CULTURE & EDUCATION DEVELOPMENT CO., LTD., ("TTC'),
BEIJING JIADE TENGTU TECHNOLOGY GROUP CO. LTD., ("Jiade"), BEIJING ORIENTAL TAI
HE TECHNOLOGY DEVELOPMENT CO., LTD.. ("Tai He") and Mr. Zhang Fanqi:

TIC deliveries:

to Mr. Zhang, or its nominee(s) certificates evidencing Thirty Million
(30,000,000) shares of Common Stock (the "Shares"). The Shares have not been,
and will not be, registered under the Securities Act, and will be issued in a
transaction that is exempt from the registration requirements of the Securities
Act. Therefore, the Shares will be "restricted securities" under the U.S.
federal securities laws and cannot be offered or resold except pursuant to
registration under the Securities Act or an available exemption from
registration, including, but not limited to, Rule 144, which requires that the
Shares be held for at least one year.

WHEREAS, Tengtu China is faced with various funding difficulties in current
operation. The solution of the funding difficulties will be unavailable through
resale of the shares due to the minimum one year restriction on such actions. To
have the Shares registered for free resale and the proceeds of share resale to
be applied pursuant to Mr. Zhang's last wishes and Share Distribution
Description;

<PAGE>

         NOW, THEREFORE, in consideration of the above facts, both parties agree
to have the Shares registered and to be legally bound by the articles set forth
as follows:

                                    ARTICLE I

                DELIVERY OF SHARES; APPLICATION OF SALE PROCEEDS

1.        REGISTRATION, SALE AND PROCEEDS APPLICATION OF COMMON STOCK

1.1.      Upon the issuance of the Common Stock by TIC, the Shares shall be
          delivered to a trustee or escrow agent selected by TIC and Executor,
          to hold on behalf of Mr. Zhang's estate;

1.2.      TIC is in charge of share registration and have shares available for
          resale at any time;

1.3.      The trustee or escrow agent shall follow the resale instruction of TIC
          which shall keep Executor advised in advance. Proceeds of the share
          resale shall flow into the special funds account designated by the
          Executor;

1.4.      The Executor can not apply the proceeds of the share resale for any
          purposes except for solving the funding difficulties of Tengtu China
          in operation and any management charges incurred in connection with
          the establishment and maintenance of the fund account.

1.5.      Both parties agrees upon the following procedures of the fund
          application:

1.5.1.    TIC or Tengtu China Management Team ("Management Team" refers to any
          management team that may be organized by TIC in China market and TIC
          takes full responsibility for the team's actions) shall apply to
          Executor for the use of the funds;

1.5.2.    The Executor or its organized Fund Management Committee ("Committee")
          shall verify the use of the fund, and after confirming the use
          complies with the last wishes and Share Distribution Description, the
          Executor or the Committee shall disburse the fund;

1.5.3.    If the Executor has disputes with Management Team or TIC on Item
          1.5.2, the Executor shall have the final decision power pursuant to
          Mr. Zhang's last wishes and Share Distribution Description;

1.5.4.    The Management Team shall report the use of the fund to the Executor
          or the Committee accurately and in time;

1.5.5.    The Executor or the Committee shall have the right to inspect the use
          of the proceeds from time to time.

                                      -2-
<PAGE>

1.6.      The Agreement shall be valid from the date of share issuance to the
          date when the tasks referred to in Mr. Zhang's last wishes and Share
          Distribution Description is fully completed.

1.7.      The termination of this Agreement shall mean that the trustee or
          escrow agent has completed its obligation on the entrusted Shares. The
          residual of the shares or proceeds shall be inherited by Mr. Zhang's
          legal heir under the Chinese Inheritance Law.

                                   ARTICLE II

                           EXPLANATIONS AND STATEMENT

2.        Explanation and Statement

2.1.      "Tengtu China" referred to in the last wishes means the companies or
          affiliates under the name of Mr. Zhang, including: 1) Jiade; 2) TTC;
          3) Beijing Tengtu Electronic Publishing Company, Ltd. (TEP); 4)
          Beijing Tengtu Tiandi Network Company, Ltd. (TTN); 5) Beijing Fengtai
          Tengtu Training Center: 6)Beijing Huaxia Boxing Education Software
          Company, Ltd. (CBERC), and Tai He.

2.2.      The funding difficulties of Tengtu China in operation referred to in
          Mr. Zhang Fanqi's last wishes and Share Distribution Description shall
          mean:

2.2.1.    Bank debts which can not be repaid in daily operation;

2.2.2.    Various payables which can be redeemed in daily operation;

2.2.3.    Shortfall of working capital in daily operation;

2.2.4.    Any other funding difficulties perceived in daily operation.

2.3.      The arrangement of Mr. Zhang Fanqi in his last wishes and Share
          Distribution Description shall not be construed as his debt
          obligations to TIC or TUC, and shall not be construed as his
          obligations to Tengtu China companies as listed in 2.1;

2.4.      This Agreement shall not be construed as any changes or amendments to
          the Share Purchase Agreement.

                                   ARTICLE III

                                  MISCELLANEOUS
3.        Miscellaneous

3.1.      Headings. The section headings contained in this Agreement are for
          purposes of convenience only, and shall in no way bear upon the
          construction or interpretation of this Agreement.

                                      -3-
<PAGE>

3.2.      Entire Agreement. This Agreement constitutes the entire agreement
          between the parties hereto and supersedes all prior agreements,
          understandings and arrangements, oral or written, between the parties
          hereto with respect to the subject matter hereof.

3.3.      Jurisdictions. This Agreement shall be governed by the Law of the
          People's Republic of China.

3.4.      Language. This Agreement is written in both English and Chinese
          languages. The Chinese language shall prevail in any interpretation
          given any discrepancies between the two languages.

3.5.      Counterparts. This Agreement may be executed in any one of the four
          counterparts, TIC, Executor, Management Team and Ms. Lu Qihua shall
          each have one counterpart.

TENGTU INTERNATIONAL CORP.

By: /S/ JOHN WATT
    --------------
   John Watt, President

   /S/ ZHOU LIYING
   ---------------
   Zhou Liying, as the Last Wishes

   Executor of Fanqi Zhang

                                      -4-
<PAGE>Exhibit 10.39

                           GENERAL FRAMEWORK AGREEMENT
                                 FOR COOPERATION

         BEIJING TENGTU UNITED ELECTRONICS DEVELOPMENT CO., LTD.

                           MICROSOFT (CHINA) CO., LTD.

                                   MARCH 2004

                                      -1-
<PAGE>

The two parties acknowledge that this agreement is formulated out of their own
wishes as a basis to guarantee their economic benefits. Both parties have
confirmed that they have already read, understood and agreed the terms and
conditions in the agreement.
<TABLE>
<CAPTION>

 ----------------------------------------------- -------------------------------------------------

              MICROSOFT (CHINA) CO., LTD.         BEIJING TENGTU UNITED ELECTRONICS
                                                     DEVELOPMENT CO., LTD.
 ----------------------------------------------- -------------------------------------------------
<S>                                             <C>
 Post code: 100022                               Post code: 100036
 Address: Millennium Tower, 38 Xiaoyun Road,     Address:   Building 8, Fucheng Street 44,
          Chaoyang District, Beijing                        Haidian District, Beijing
 Point of Contact:
 Tel:                                            Point of Contact: Lu Yunfei
 Fax:                                            Tel: +86 10 88114060
 E-mail:                                         Fax: +86 10 88114583
                                                 E-mail: LUYUNFEI@TENGTU.COM.CN
 ----------------------------------------------- -------------------------------------------------
 Name( in print)(pound)(0)                               Name(in print)(pound)(0)Lin Xiaofeng
 ----------------------------------------------- -------------------------------------------------
 Title (in print): Microsoft (China) Co., Ltd.   Title(in  print): Executive President of Beijing
                                                 Tengtu United Electronics Development Co. Ltd
 ----------------------------------------------- -------------------------------------------------

 Signed by(pound)(0)                                   Signed by(pound)(0)

 ----------------------------------------------- -------------------------------------------------
 ----------------------------------------------- -------------------------------------------------

 Company seal:                                   Company seal:

 ----------------------------------------------- -------------------------------------------------
 ----------------------------------------------- -------------------------------------------------
 Date: March  , 2004                             Date: March  , 2004
 ----------------------------------------------- -------------------------------------------------
</TABLE>

                                      -2-
<PAGE>

Microsoft (China) Co., Ltd.(hereafter referred to as Party A) and Beijing Tengtu
United Electronics Development Co., Ltd. (hereafter referred to as Party B) have
entered into this agreement on the principle of mutual understand, sincere
cooperation and joint development. Through friendly consultations the two
parties have reached the following agreement with regard to cooperation on
expansion of China education market, the aim of cooperation, rights and
obligation of each party.

           16. I. Aim of the Cooperation and Nature of the Agreement

   1.  The ultimate aim of the cooperation is to give full play to each party's
       brand advantage, geological advantage and technical advantage and pool
       excellent talent resources to develop "K-12 school's educational
       resources" market in an all-round way in China by means of the optimized
       team combination, excellent cooperation scheme and the best technological
       products.
   2.  Both parties unanimously agree that the agreement is a guiding document
       for both parties to expand their products and services share in K-12
       school's educational resources market. The basis of the agreement is
       Education Resource for Office; two parties jointly launch the Resource
       application solution plan, which is based on Microsoft Office system.

II. TERM OF COOPERATION
1 year from the signing, date.

III. DETAILS OF COOPERATION
1. COOPERATIVE AREA
        Cooperative area:     China
        Industrial name:      Education market
        Name of the solution: Education Resource for Office

2. FORM OF COOPERATION
      The two sides should define and implement the integrated technical
      architecture of Education Resource for Office.

IV. RESPONSIBILITIES AND OBLIGATIONS
For a quicker and better launch the Resource application solution defined in
this agreement into market, both sides promise each and joint responsibility and
obligation as followed:

                                      -3-
<PAGE>

1. RESPONSIBILITIES AND OBLIGATIONS OF PART A

     1.1 Part A is in charge of providing necessary training for Part B's
     technician to finish the Resource application solution plan.

     1.2 Part A is in charge of providing software and hardware development
     environment, which is necessary for the technical development.

     1.3 Part A is in charge of providing the system testing
     platform/environment, testing plan and testing advise.

     1.4 Part A provides Part B with sales training and proper pre-sale
     technical support once every 6 month.

     1.5 Part A provides Part B with necessary free software for Part A to set
     up a demonstration environment for national education industrial
     Application solution plan.

     1.6 Part A recommends Education Resource for Office to the customers in
     those area and industrial field defined in this agreement.

     1.7 Part A provides free training and certification diploma for Part B's
     customer of Education Resource for Office.

2. RESPONSIBILITIES AND OBLIGATIONS OF PART B

     2.1 Party B shall undertake the system development of the Resource
     application solution plan according to the actual demands of China
     education sector, including system design, programming and producing the
     installation disk.

     2.2 Party B is responsible for the formulation of general distribution plan
     for Education Resource for Office with Party A.

     2.3 Party B is responsible for the promotion of Education Recourse for
     Office to the agencies and end users in the regions and industries defined
     in this agreement.

     2.4 Party B will recommend Party A's other products and services to its
     customers of the regions and industries specified in this agreement.

     2.5 Party B shall provide technical consultation and training on Education
     Resource for Office once every six months.

                                      -4-
<PAGE>

V. EFFECTIVENESS OF THE AGREEMENT AND DEFAULT

The agreement is made in two identical copies, and each has equally legal
effect. The agreement shall become effective on the date when the authorized
representatives from both parties execute it and put the official seals on it.
Early termination of the agreement shall be in accordance with the terms and
conditions of the agreement or approved in writing by both parties. The term of
the agreement is specified in Section 2.

It shall be deemed as breach of the agreement under the following situations:

1) Either party has violated the non-disclosure obligations set forth in Section
   6 without the written approval from the other party (including, but not
   limited to, the disclosure of the other party's confidential information to
   the unrelated third party);

2) If either party has not fully fulfilled its obligations in time or violated
   any terms and conditions of the agreement, and has not taken any remedial
   measures within 30 days after receiving the written notice from the other
   party;

3) or due to bankruptcy, exemption of debtor's debt or transfer of creditor's
   rights and interests, or out of business, or entering into bankruptcy,
   reorganization, arrangement, insolvency or entering into liquidation
   procedure or other procedures, and the procedure not terminated within 30
   days after the procedure starts, or violation of relevant laws and
   regulations and business ethics in performing the agreement.

If one party has violated the agreement, the other party has the right to
terminate the agreement and has the right to exercise all the rights and
remedial measures in accordance with the agreement. The remedial measures taken
by both parties can be exercised at the same time or separately, and moreover
the exercising of any kind of remedial measures is not the choice of this kind
of remedial measure, which does not exclude the exercising of any other remedial
measures, with the exception of the claims arising from the infringement of
intellectual property rights or violation of the non-disclosure obligations.

17.      VI. Confidentiality

Both parties promise that nothing herein contained shall be divulged to any
third party or unauthorized person of its own company without the prior written
consent. Both parties agree that within the term of this agreement and 2 years
after its expiration, all information received or obtained under this agreement,
which, the other party believes, is confidential, shall be considered as
proprietary information and be held confidential ("confidential information").
Both parties agree to pay proper attention to preventing all confidential

                                      -5-
<PAGE>

information from being disclosed or used without authorization, just as to
protect its own similar sensitive confidential information. When it is necessary
to disclose confidential information in written form, it shall be marked with
the word of "secret" or "confidential", If it is orally disclosed, the
disclosing party shall declare that it is confidential information at the time
of disclosure, and within 30 days after the oral disclosure, issue a written
confirmation to the receiving party to summarize the contents of confidential
information orally disclosed. Both parties agree that the confidential
information shall be used only for performance of the obligations under this
agreement. Unless otherwise agreed in this agreement, the agreement has not
expressly or implicitly granted, assigned or allowed one party's trademark,
invention, copyright, patent or other intellectual property to be used by the
other party. All the confidential information is the property of the information
disclosing party. In case of termination of the agreement and at the either
party's request, the other party shall return the confidential information to
the requesting party, including all the photocopies. Both parties agree that the
confidential information shall be destroyed when it is no longer necessary.
Provided that the above mentioned regulations are not affected, neither party
shall be liable for confidential information under the following conditions:

1) The confidential information had already been owned by the other party before
the non-disclosure obligation was enforced;

2) The confidential information is made public without any party's fault;

3) The confidential information has been legally obtained without breaching this
agreement from a third party who has the right to provide it;

4) The confidential information is developed independently without using any
confidential information of the other party;or 5) The confidential information
is required to be disclosed by the court order or by the competent government or
administrative agencies with legal jurisdiction over one party.

18. VII. MISCELLANEOUS

(A) 1. ADVERTISEMENT AND USE OF COMPANY NAME

     If one party wants to release any news in the media, it should ask the
     other party for approval.

(B) 2. NON-RECRUITMENT

     Both parties agree that without prior written consent by the other party,
     either party shall not directly recruit, provide employment opportunity
     for, hire or retain any staff, advisers, subcontractors or other agents of
     the other party who are related to the performance of this agreement within
     the term of this agreement and one year after its expiration.

                                      -6-
<PAGE>

(C) 3. FORCE MAJEURE

Neither party shall be liable for delays in performing this agreement or failure
to perform due to the causes beyond its commercially reasonable control. Such
delays shall include, but not be limited to, wars, fires, earthquake, explosion,
flood or other natural calamities, government's legislation, acts, order or
regulations, strikes or labor problems, provided that the delays mentioned above
are not caused by the delayed party's error or fault. Any occurrence or causes
of delay shall continue only for the period of time during which the event is
beyond the delayed party's commercially reasonable control. However, the delayed
party agrees that commercially reasonable efforts shall be made to relief the
delay caused by occurrence of any events which is beyond delayed party's
commercially reasonable control. The delayed party shall promptly notify the
other party in written form upon occurrence of any force majeure events and
advise them of their schedule to resume the performance.
In case the force majeure event lasts for more than 90 days, both parties will
resolve it through consultation.

(D) 4. NOTICES

When notices are sent by one party to the other party by hand or fax (a photo
copy is to be provided subsequently) to the addresses mentioned under this
agreement or such other addresses as may from time to time be notified by either
party, the receiving time of the notices is deemed as the time of delivery; if
they are delivered by express courier service, the receiving date shall be
deemed as one (1) day after the delivery; if they are sent by postage prepaid
registered mail, the receiving date shall be deemed as two (2) days after
sending. Both parties agree that notices sent by fax in a good shape shall be
treated as "original" document, except that the truth of document is doubted.

(E) 5 LEGAL JURISDICTION

This agreement shall be subjected to the legal jurisdiction of the People's
Republic of China.

(F) 6 DISPUTE SETTLEMENT

Both parties unanimously agree that all the non-specified matters relating to
this agreement and disputes arising out of performing this agreement shall be
resolved through friendly consultations. In the event such efforts fail, any
party can institute legal proceedings to the people's court at its location.

                                      -7-
<PAGE>

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