Document:

EXHITIB 10.2
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                            SHARE PURCHASE AGREEMENT
                            ------------------------

                                     Among:
                                     -----

                                XINHUA CHINA LTD.
                                -----------------

                                      And:
                                      ---

                         BEIJING BOHENG INVESTMENTS LTD.
                         -------------------------------

                                      And:
                                      ---

                               THE SHAREHOLDERS OF
                               -------------------
                         BEIJING BOHENG INVESTMENTS LTD.
                         -------------------------------

Notice to the Shareholders of Beijing Boheng  Investments Ltd.: The shareholders
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of Beijing Boheng  Investments Ltd. are hereby advised by each of Devlin Jensen,
counsel for Xinhua China Ltd., and Xinhua China Ltd. to obtain independent legal
advice  with  respect  to his  review  and  execution  of  this  Share  Purchase
Agreement.

                                   ----------

<PAGE>

                            SHARE PURCHASE AGREEMENT
                            ------------------------

       THIS SHARE PURCHASE  AGREEMENT is dated and made for reference  effective
as fully executed on this 21st day of January, 2005.

BETWEEN:
-------

              XINHUA CHINA LTD., a  corporation  organized  under
              -----------------
              the  laws of the  State of  Nevada  and  having  an
              address for notice and delivery located at PMB 680,
              250 H Street, Blaine, Washington, USA 98230.

              (the "Purchaser");
                                                               OF THE FIRST PART
                                                               -----------------

AND:
---

              BEIJING  BOHENG  INVESTMENTS  LTD.,  a  corporation
              organized  under the laws of the People's  Republic
              of China  and  having an  address  for  notice  and
              delivery  located  at  Chaoqian  No. 9,  Technology
              Zone, Changping District, Beijing, China.

              (the "Company");
                                                              OF THE SECOND PART
                                                              ------------------

AND:
---

              THE  UNDERSIGNED  SHAREHOLDERS  OF  BEIJING  BOHENG
              ---------------------------------------------------
              INVESTMENTS  LTD., having an address for notice and
              -----------------
              delivery  located at c/o Chaoqian No. 9, Technology
              Zone, Changping District, Beijing, China.

              (such shareholders being hereinafter referred to as
              the "Vendors");
                                                               OF THE THIRD PART
                                                               -----------------

              (the Vendors,  the Company and the Purchaser  being
              hereinafter   singularly  also  referred  to  as  a
              "Party"  and   collectively   referred  to  as  the
              "Parties" as the context so requires).

<PAGE>

              WHEREAS:
              -------

A.     The Company is a body corporate  subsisting under and registered pursuant
to the laws of the People's Republic of China;

B.     The Company is in the business of wholesale and retail of domestic books,
newspapers, journals, and electronic publications in China, excluding books from
Hong Kong, Macau and Taiwan (collectively, the "Company's Business");

C.     The Vendors are the legal and beneficial  owners of all of the issued and
outstanding  shares  in the  capital  of the  Company,  95% of  which  are to be
purchased by the Purchaser  herein (each such share being a "Purchased  Share");
the  particulars of the  registered  and beneficial  ownership of such Purchased
Shares being set forth in Schedule "A" which is attached  hereto and which forms
a material part hereof; and

D.     The  Parties  hereto  have  agreed  to enter  into  this  Share  Purchase
Agreement  (the  "Agreement")  which  formalizes,  amends and  replaces,  in its
entirety,   the  Letter  Agreement,   dated  September  14,  2004  (the  "Letter
Agreement") as contemplated and required by the terms of such Letter  Agreement,
and which clarifies their  respective  duties and obligations in connection with
the purchase by the Purchaser  from the Vendors of all of the  Purchased  Shares
together with the further development of the Company's Business as a consequence
thereof;

       NOW THEREFORE  THIS AGREEMENT  WITNESSETH  that in  consideration  of the
       -----------------------------------------
mutual promises,  covenants and agreements herein contained,  THE PARTIES HERETO
                                                              ------------------
COVENANT AND AGREE WITH EACH OTHER as follows:
----------------------------------

                                    Article 1
                                    ---------
                                   DEFINITIONS
                                   -----------

1.1    Definitions.  For the  purposes of this  Agreement,  except as  otherwise
       -----------
expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:

       (a)    "Agreement" means this "Share Purchase  Agreement" as entered into
              among the Vendors, the Company and the Purchaser herein,  together
              with any amendments thereto and any Schedules as attached thereto;

       (b)    "Board of Directors" means, as applicable, the respective Board of
              Directors of each of the Parties hereto as duly  constituted  from
              time to time;

       (c)    "business day" means any day during which Canadian Chartered Banks
              are  open  for  business  in the City of  Vancouver,  Province  of
              British Columbia;

       (d)    "Business  Documentation"  means  any and all  records  and  other
              factual data and  information  relating to the Company's  Business
              interests and assets and including, without limitation, all plans,
              agreements  and records which are in the  possession or control of
              Vendors or the Company in that respect;

<PAGE>

       (e)    "Closing"  has  the  meaning  ascribed  to  it  in  Article  "6.1"
              hereinbelow;

       (f)    "Closing  Date" has the meaning  ascribed  to it in Article  "6.1"
              hereinbelow;

       (g)    "Commercial  Arbitration  Act"  means the  Arbitration  Act of the
              Province of British Columbia,  R.S.B.C. 1996, as amended from time
              to time, as set forth in Article "11" hereinbelow;

       (h)    "Commissions"  means the United  States  Securities  and  Exchange
              Commission;

       (i)    "Common Shares" means the 18,613,000 shares of common stock of the
              Purchaser to be issued and delivered to the Vendors,  pro rata, as
              part of the Purchase Price of the Purchased Shares;

       (j)    "Company" means Beijing Boheng  Investment & Management Co., Ltd.,
              a corporation organized under the laws of the People's Republic of
              China,  or any successor  company,  however  formed,  whether as a
              result of merger, amalgamation or other action;

       (k)    "Company's  Assets"  means  all  assets,   contracts,   equipment,
              goodwill, inventory and Intellectual Property of the Company;

       (l)    "Company's  Business"  has the  meaning  ascribed to it in recital
              "B." hereinabove;

       (m)    "Company's Financial Statements" has the meaning ascribed to it in
              Article "3.3(s)" hereinbelow;

       (n)    "Defaulting  Party" and  "Non-Defaulting  Party" have the meanings
              ascribed to them in Article "12" hereinbelow;

       (p)    "Encumbrances"   means   mortgages,   liens,   charges,   security
              interests, encumbrances and third party claims of any nature;

       (p)    "Exchange" means the NASD Over-the-Counter Bulletin Board;

       (q)    "Execution  Date" means the actual date of the complete  execution
              of this Agreement and any amendment  thereto by all Parties hereto
              as set forth on the front page hereof;

       (r)    "Indemnified  Party" and  "Indemnified  Parties" have the meanings
              ascribed to them in Article "7.1" hereinbelow;

       (s)    "Intellectual  Property" means,  with respect to the Company,  all
              right and interest to all patents,  patents  pending,  inventions,
              know-how,  any  operating or  identifying  name or  registered  or
              unregistered  trademarks and  tradenames,  all computer  programs,
              licensed   end-user   software,   source   codes,   products   and
              applications  (and related  documentation and materials) and other
              works of authorship (including notes, reports, other documents and
              materials, magnetic, electronic, sound or video recordings and any
              other work in which  copyright  or similar  right may subsist) and
              all copyrights  (registered or unregistered)  therein,  industrial
              designs  (registered  or  unregistered),   franchises,   licenses,
              authorities,   restrictive   covenants  or  other   industrial  or
              intellectual property used in or pertaining to the Company;

<PAGE>

       (t)    "Parties" or "Party" means, respectively, the Vendors, the Company
              and/or the  Purchaser  hereto,  as the case may be,  together with
              their respective  successors and permitted  assigns as the context
              so requires;

       (u)    "person"   or   "persons"   means  an   individual,   corporation,
              partnership,   party,  trust,  fund,  association  and  any  other
              organized  group  of  persons  and the  personal  or  other  legal
              representative of a person to whom the context can apply according
              to law;

       (v)    "Purchased  Shares" has the meaning ascribed to it in recital "C."
              hereinabove;  the  particulars  of the  registered  and beneficial
              ownership of such Purchased Securities being set forth in Schedule
              "A" which is attached hereto;

       (w)    "Purchase  Price" has the meaning  ascribed to it in Article "2.2"
              hereinbelow;

       (x)    "Purchaser" means Xinhua China Ltd., a corporation organized under
              the laws of the State of Nevada, or any successor company, however
              formed,  whether  as a result  of  merger,  amalgamation  or other
              action;

       (y)    "Purchaser's  Due  Diligence"  has the  meaning  ascribed to it in
              Article "5.1(b)" hereinbelow;

       (z)    "Purchaser's  Ratification"  has  the  meaning  ascribed  to it in
              Article "5.1(a)" hereinbelow;

       (aa)   "Takeover"  means  that  transaction  or  series  of  transactions
              pursuant to which the Purchaser  will acquire all of the Purchased
              Shares  of the  Company  from  the  Vendors  in  exchange  for the
              issuance from treasury by the Purchaser of the Common Shares;

       (ab)   "Time of Closing" means 2:00 o'clock, p.m. (Vancouver Time) on the
              Closing Date;

       (ac)   "Transfer Agent" means Pacific Stock Transfer Company; and

       (ad)   "Vendors" means the  shareholders of the Company who have executed
              this Agreement as a Party hereto.

1.2    Schedules.  For the  purposes  of this  Agreement,  except  as  otherwise
       ---------
expressly provided or unless the context otherwise requires, the following shall
represent  the Schedules  which are attached to this  Agreement and which form a
material part hereof:

                Schedule                             Description
                --------                             -----------

              Schedule "A":                Purchased Shares and Vendors; and
              Schedule "B":                Permits, Licenses and Certificates.

1.3    Interpretation.  For the purposes of this Agreement,  except as otherwise
       --------------
expressly provided or unless the context otherwise requires:

<PAGE>

       (a)    the words  "herein",  "hereof" and  "hereunder" and other words of
              similar  import refer to this  Agreement as a whole and not to any
              particular   Article,   section  or  other   subdivision  of  this
              Agreement;

       (c)    any reference to an entity shall include and shall be deemed to be
              a reference  to any entity that is a permitted  successor  to such
              entity; and

       (c)    words  in  the  singular  include  the  plural  and  words  in the
              masculine gender include the feminine and neuter genders, and vice
              versa.

                                    Article 2
                                    ---------
              PURCHASE AND SALE OF THE ALL OF THE PURCHASED SHARES
              ----------------------------------------------------

2.1    Purchase and Sale.  Subject to the terms and conditions  hereof and based
       -----------------
upon the  representations  and  warranties  contained  in  Articles  "3" and "4"
hereinbelow  and prior  satisfaction  of the conditions  precedent which are set
forth in Article "5" hereinbelow,  the Vendors hereby agrees to assign, sell and
transfer at the Closing Date (as hereinafter determined) all of their respective
rights,  entitlement and interest in and to the Purchased Shares (which includes
                                                                  --------------
only 95% of each of the  Vendors'  shares in the capital of the  Company) to the
------------------------------------------------------------------------
Purchaser  and the  Purchaser  hereby  agrees to purchase  all of the  Purchased
Shares from the Vendors on the terms and subject to the conditions  contained in
this Agreement.

2.2    Purchase Price.  The total purchase price (the "Purchase  Price") for all
       --------------
of the Purchased Shares will be satisfied by way of the issuance and delivery by
the Purchaser to the Vendors,  in accordance with section "2.3" hereinbelow,  of
an aggregate of 18,613,000 common shares in the capital of the Purchaser (each a
"Common Share"), at a deemed price of US$0.0011111 per Common Share.

<PAGE>

2.3    Resale  Restrictions.  The Vendors hereby  acknowledge and agree that the
       --------------------
Purchaser  makes  no  representations  as to any  resale  or  other  restriction
affecting  the Common  Shares  and that it is  presently  contemplated  that the
Common  Shares will be issued by the  Purchaser to the Vendors in reliance  upon
the  registration  and  prospectus  exemptions  contained  in the United  States
Securities  Act of 1933, as amended (the  "Securities  Act") or  "Regulation  S"
promulgated under the Securities Act which will impose a trading  restriction in
the United  States on the Common  Shares for a period of at least 12 months from
the Closing Date (as hereinafter determined). In addition, the obligation of the
Purchaser to issue the Common Shares pursuant to section "2.2"  hereinabove will
be subject to the Purchaser  being  satisfied that an exemption from  applicable
registration  and prospectus  requirements is available under the Securities Act
and all applicable securities laws, in respect of the Vendors and related Common
Shares,  and the  Purchaser  shall be relieved of any  obligation  whatsoever to
purchase  any  Purchased  Shares of the  Vendors and to issue  Common  Shares in
respect of the Vendors where the Purchaser reasonably determines that a suitable
exemption is not available to it.

                                    Article 3
                                    ---------
                    REPRESENTATIONS, WARRANTIES AND COVENANTS
                    -----------------------------------------
                          BY THE COMPANY AND THE VENDOR
                          -----------------------------

3.1    General Representations,  Warranties and Covenants by the Company and the
       -------------------------------------------------------------------------
Vendors.  In order to induce the  Purchaser  to enter into and  consummate  this
-------
Agreement,  the Company and the Vendors,  jointly and severally,  represents to,
warrants to and covenants with the Purchaser, with the intent that the Purchaser
will  rely  thereon  in  entering  into this  Agreement  and in  concluding  the
transactions   contemplated   herein,  that,  to  the  best  of  the  knowledge,
information and belief of each of the Vendors and the Company, after having made
due inquiry:

       (a)    if a  corporation,  it is duly  organized  under  the  laws of its
              respective  jurisdiction of incorporation  and is validly existing
              and  in  good  standing  with  respect  to all  statutory  filings
              required by the applicable corporate laws;

       (b)    it is qualified to do business in those  jurisdictions where it is
              necessary to fulfill its  obligations  under this Agreement and it
              has the full power and authority to enter into this  Agreement and
              any agreement or instrument  referred to or  contemplated  by this
              Agreement;

       (c)    it has the requisite power,  authority and capacity to own and use
              all  of  its  respective  business  assets  and  to  carry  on its
              respective  business as  presently  conducted by it and to fulfill
              its respective obligations under this Agreement;

       (d)    the  execution and delivery of this  Agreement and the  agreements
              contemplated  hereby have been duly  authorized  by all  necessary
              action, corporate or otherwise, on its respective part;

       (e)    there are no other consents,  approvals or conditions precedent to
              the performance of this Agreement which have not been obtained;

       (f)    this Agreement  constitutes a legal,  valid and binding obligation
              of it enforceable  against it in accordance with its terms, except
              as  enforcement  may be  limited  by laws of  general  application
              affecting the rights of creditors;

<PAGE>

       (g)    no  proceedings  are pending  for, and it is unaware of, any basis
              for the institution of any  proceedings  leading to its respective
              dissolution  or winding up, or the placing of it in  bankruptcy or
              subject  to any other laws  governing  the  affairs  of  insolvent
              companies or persons;

       (h)    the  making  of  this   Agreement   and  the   completion  of  the
              transactions  contemplated  hereby  and  the  performance  of  and
              compliance with the terms hereof does not and will not:

              (i)    if a corporation, conflict with or result in a breach of or
                     violate any of the terms,  conditions  or provisions of its
                     respective constating documents;

              (ii)   conflict  with or result in a breach of or  violate  any of
                     the terms,  conditions or provisions of any law,  judgment,
                     order,  injunction,  decree,  regulation  or  ruling of any
                     Court or governmental  authority,  domestic or foreign,  to
                     which it is subject,  or  constitute or result in a default
                     under any agreement,  contract or commitment to which it is
                     a party;

              (iii)  give to any party the right of termination, cancellation or
                     acceleration in or with respect to any agreement,  contract
                     or commitment to which it is a party;

              (iv)   give to any government or  governmental  authority,  or any
                     municipality  or any  subdivision  thereof,  including  any
                     governmental  department,   commission,  bureau,  board  or
                     administration    agency,   any   right   of   termination,
                     cancellation or suspension of, or constitute a breach of or
                     result in a default under, any permit, license,  control or
                     authority  issued to it which is  necessary or desirable in
                     connection   with  the  conduct  and   operations   of  its
                     respective  business  and the  ownership  or leasing of its
                     respective business assets; or

              (v)    constitute  a default by it, or any event  which,  with the
                     giving of notice or lapse of time or both, might constitute
                     an  event  of  default,  under  any  agreement,   contract,
                     indenture or other instrument  relating to any indebtedness
                     of it  which  would  give  any  party  to  that  agreement,
                     contract,  indenture  or  other  instrument  the  right  to
                     accelerate  the  maturity  for the  payment  of any  amount
                     payable under that agreement,  contract, indenture or other
                     instrument; and

       (i)    neither this  Agreement  nor any other  document,  certificate  or
              statement furnished to the Purchaser by or on behalf of any of the
              Vendors  or  the  Company  in  connection  with  the  transactions
              contemplated  hereby knowingly or negligently  contains any untrue
              or  incomplete  statement  of  material  fact or  omits to state a
              material fact  necessary in order to make the  statements  therein
              not  misleading  which  would  likely  affect the  decision of the
              Purchaser to enter into this Agreement.

3.2    Representations,  Warranties and Covenants by the Vendors  respecting the
       -------------------------------------------------------------------------
Purchased  Shares and the Common  Shares.  In order to induce the  Purchaser  to
----------------------------------------
enter into and consummate  this  Agreement,  the Vendors  hereby  represents to,
warrants to and covenants with the Purchaser, with the intent that the Purchaser
will also rely thereon in entering into this  Agreement  and in  concluding  the
transactions   contemplated   herein,  that,  to  the  best  of  the  knowledge,
information and belief of the Vendors, after having made due inquiry:

<PAGE>

       (a)    save and  except as set forth in  Schedule  "A" which is  attached
              hereto,  the Vendors have good and marketable title to and are the
              legal and beneficial  owners of all of the Purchased  Shares,  and
              the  Purchased  Shares are fully paid and  non-assessable  and are
              free  and  clear  of  liens,   charges,   encumbrances,   pledges,
              mortgages,  hypothecations,  security interests and adverse claims
              of  any  and  all  nature   whatsoever  and   including,   without
              limitation,  options,  pre-emptive  rights  and  other  rights  of
              acquisition  in  favour  of any  person,  whether  conditional  or
              absolute;

       (b)    the Vendors  have the power and capacity to own and dispose of the
              Purchased Shares,  and the Purchased Shares are not subject to any
              voting or similar arrangement;

       (c)    there  are  no  actions,  suits,   proceedings  or  investigations
              (whether or not purportedly against or on behalf of the Vendors or
              the Company),  pending or  threatened,  which may affect,  without
              limitation,  the  rights of the  Vendors  to  transfer  any of the
              Purchased  Shares to the Purchaser at law or in equity,  or before
              or  by  any  federal,  state,   provincial,   municipal  or  other
              governmental  department,  commission,  board,  bureau,  agency or
              instrumentality,  domestic or foreign,  and,  without limiting the
              generality  of the  foregoing,  there are no  claims or  potential
              claims under any relevant  family  relations  legislation or other
              equivalent   legislation   affecting  the  Purchased   Shares.  In
              addition,  the Vendors are not now aware of any existing ground on
              which any such action,  suit or proceeding might be commenced with
              any reasonable likelihood of success;

       (d)    no other person, firm or corporation has any agreement,  option or
              right  capable of becoming an agreement for the purchase of any of
              the Purchased Shares;

       (e)    the  Vendors  acknowledge  that the Common  Shares  will be issued
              under certain  exemptions  from the  registration  and  prospectus
              filing requirements otherwise applicable under the Securities Act,
              and that, as a result,  the Vendors may be  restricted  from using
              most of the  remedies  that would  otherwise  be  available to the
              Vendors,  the  Vendors  will not  receive  information  that would
              otherwise  be  required  to be  provided  to the  Vendors  and the
              Purchaser  is  relieved  from  certain   obligations   that  would
              otherwise apply to the Purchaser, in either case, under applicable
              securities legislation;

       (f)    the Vendors have not received,  nor have the Vendors  requested or
              do the Vendors  require to receive,  any offering  memorandum or a
              similar  document  describing  the  business  and  affairs  of the
              Purchaser  in order to assist the  Vendors in  entering  into this
              Agreement  and  in  consummating  the  transactions   contemplated
              herein;

       (g)    the Vendors  acknowledge and agree that the Common Shares have not
              been and will not be qualified or registered  under the securities
              laws of the United States or any other  jurisdiction and, as such,
              the Vendors may be restricted  from selling or  transferring  such
              Common Shares under applicable law;

       (h)    the Vendors are  resident in the  jurisdiction  as set forth under
              the Vendors' address in Schedule "A" which is attached hereto, and
              that  all  negotiations  and  other  acts  in  furtherance  of the
              execution  and  delivery  of  this  Agreement  by the  Vendors  in
              connection with the  transactions  contemplated  herein have taken
              place and will take place  solely in such  jurisdiction  or in the
              British Virgin Islands; and

<PAGE>

       (i)    the  Purchased  Shares  have been  issued in  accordance  with all
              applicable securities and corporate legislation and policies.

3.3    Representations,  Warranties  and Covenants by the Company and the Vendor
       -------------------------------------------------------------------------
respecting  the  Company.  In order to induce  the  Purchaser  to enter into and
------------------------
consummate this Agreement,  each of the Vendors and the Company hereby,  jointly
and severally, also represents to, warrants to and covenants with the Purchaser,
with the intent that the Purchaser  will also rely thereon in entering into this
Agreement and in concluding the transactions  contemplated  herein, that, to the
best of the  knowledge,  information  and belief of each of the  Vendors and the
Company, after having made due inquiry:

       Corporate Status of the Company
       -------------------------------

       (d)    the Company is a company with limited  liability duly and properly
              organized  and validly  subsisting  under the laws of the People's
              Republic of China being the only jurisdiction where it is required
              to be  registered  for the  purpose of enabling it to carry on its
              business and own its property as presently carried on and owned;

       (e)    the Company has good and sufficient power,  authority and right to
              own or lease its  property,  to enter into this  Agreement  and to
              perform its obligations hereunder;

       Authorization
       -------------

       (f)    this Agreement has been duly authorized, executed and delivered by
              the  Vendors  and the  Company  and is a legal,  valid and binding
              obligation of the Vendors and the Company, enforceable against the
              Vendors  and/or the Company,  as the case may be, by the Purchaser
              in accordance with its terms, except as enforcement may be limited
              by  bankruptcy,  insolvency and other laws affecting the rights of
              creditors  generally  and except that  equitable  remedies  may be
              granted   only  in  the   discretion   of  a  court  of  competent
              jurisdiction;

       No Other Agreements to Purchase
       -------------------------------

       (d)    no  person  other  than  the  Purchaser  has any  written  or oral
              agreement  or option or any right or  privilege  (whether  by law,
              pre-emptive or contractual)  capable of becoming an agreement,  or
              option for the purchase or acquisition  from the Vendors of any of
              the Purchased Shares;

       Options
       -------

       (e)    no person has any  agreement  or option or any right or  privilege
              (whether by law,  pre-emptive or contractual)  capable of becoming
              an  agreement,  including  convertible  securities,   warrants  or
              convertible   obligations   of  any  nature,   for  the  purchase,
              subscription,  allotment  or  issuance of any  unissued  shares or
              other securities of the Company;

       Title to Shares
       ---------------

       (g)    the Purchased  Shares are  beneficially  owned by the Vendors with
              good and marketable title thereto free of all Encumbrances and are
              registered  in the books of the Company in the name of the Vendors
              and, without limitation thereto,  none of the Purchased Shares are
              subject to any voting  trust,  unanimous  shareholders  agreement,

<PAGE>

              other  shareholders  agreements,   pooling  agreements  or  voting
              agreements;

       (g)    upon   completion  of  the   transactions   contemplated  by  this
              Agreement,  all of the  Purchased  Shares  will  be  owned  by the
              Purchaser  as the  beneficial  owner  of  record,  with  good  and
              marketable title thereto (except for such Encumbrances as may have
              been granted by the Purchaser);

       Title to Personal Property and Other Property
       ---------------------------------------------

       (z)    the property and assets of the Company, which includes, but is not
              limited  to,  ownership  of 30.67% of the  registered  capital  of
              Xinhua  Publications  Circulation  and  Distribution  Co., Ltd., a
              company  organized  under  the laws of the  People's  Republic  of
              China,  are,  and between the date hereof and the Closing Date (as
              hereinafter  determined),  will  be,  owned  beneficially  by  the
              Company with a good and marketable  title thereto,  free and clear
              of all Encumbrances save as previously disclosed to the Purchaser;

       (i)    the  permits,  licenses and  certificates  set out in Schedule "B"
              attached   hereto   have  been   issued  to  Xinhua   Publications
              Circulation and Distribution Co., Ltd.

<PAGE>

       Intellectual Property
       ---------------------

       (j)    the  Company  has  provided  the  Purchaser  with a  complete  and
              accurate  list of all trade marks,  trade names,  business  names,
              patents, inventions,  know-how,  copyrights,  service marks, brand
              names, industrial designs and all other industrial or intellectual
              property owned or used by the Company in carrying on the Company's
              Business and all applications  therefor and all goodwill connected
              therewith, including, without limitation, all licenses, registered
              user  agreements  and all like  rights  used by or  granted to the
              Company in connection with the Company's Business and all right to
              register  or  otherwise  apply  for the  protection  on any of the
              foregoing (collectively, the "Intellectual Property");

       (k)    the Intellectual  Property comprises all trade marks, trade names,
              business names, patents, inventions, know-how, copyrights, service
              marks, brand marks, industrial designs and all other industrial or
              intellectual property necessary to conduct the Company's Business;

       (l)    the Company is the beneficial owner of the Intellectual  Property,
              free and clear of all Encumbrances, and is not a party to or bound
              by any  contract  or other  obligation  whatsoever  that limits or
              impairs its ability to sell,  transfer,  assign or convey, or that
              otherwise affects, the Intellectual Property;

       (m)    no person has been  granted any interest in or right to use all or
              any portion of the Intellectual Property;

       (n)    neither  the  Vendors  nor the Company are aware of a claim of any
              infringement or breach of any industrial or intellectual  property
              rights of any other person by the Company, nor have the Vendors or
              the Company  received any notice that the conduct of the Company's
              Business  infringes or breaches  any  industrial  or  intellectual
              property  rights of any other person,  and neither the Vendors nor
              the  Company,  after  due  inquiry,  have  any  knowledge  of  any
              infringement  or violation of any of their rights or the rights of
              the Company in the Intellectual Property;

       (o)    the conduct of the  Company's  Business does not infringe upon the
              patents,  trade  marks,  licenses,  trade names,  business  names,
              copyright or other  industrial or  intellectual  property  rights,
              domestic or foreign, of any other person;

       (p)    neither  the  Vendors  nor the  Company  are aware of any state of
              facts that casts doubt on the validity or enforceability of any of
              the Intellectual Property;

       (q)    the Company has provided to the Purchaser a true and complete copy
              of all Contracts and amendments thereto that comprise or relate to
              the Intellectual Property;

<PAGE>

       Financial Statements
       --------------------

       (r)    the Company's Financial  Statements,  dated January 15, 2005, have
              been prepared in accordance  with  generally  accepted  accounting
              principles  applied on a basis consistent with prior periods,  are
              correct and  complete and present  fairly the assets,  liabilities
              (whether accrued, absolute, contingent or otherwise) and financial
              condition of the Company as at the respective dates of and for the
              respective periods covered by the Company's Financial Statements;

       (s)    for any period up to the Time of Closing the Company will not have
              any debts or liabilities whatsoever (whether accrued,  absolute or
              contingent or otherwise),  including any  liabilities for federal,
              provincial, sales, excise, income, corporate or any other taxes of
              the Company except for;

              (i)    the debts and  liabilities  disclosed  on,  provided for or
                     included  in the balance  sheet  forming a part of the most
                     recent of the Company's Financial Statements;

              (ii)   debts or  liabilities  disclosed  in this  Agreement or any
                     Schedule hereto; and

              (iii)  liabilities  incurred by the Company in the ordinary course
                     of the  Company's  Business  subsequent  to the date of the
                     balance  sheet  referred  to  in  the  Company's  Financial
                     Statements;

       Books and Records
       -----------------

       (t)    the books and records of the Company  fairly and correctly set out
              and  disclose,  in  all  material  respects,  in  accordance  with
              generally accepted accounting  principles,  consistently  applied,
              the  financial  condition  of the  Company  as of the date of this
              Agreement and all material  financial  transactions of the Company
              have been accurately recorded in such books and records;

       Corporate Records
       -----------------

       (u)    the  Corporate  records and minute  books of the  Company  contain
              complete and accurate minutes, (duly signed by the chairman and/or
              secretary  of the  appropriate  meeting)  of all  meetings  of the
              directors  and  shareholders  of the  Company  since  its  date of
              incorporation;

       (v)    the  share  certificate  records,  the  securities  register,  the
              register of  disclosures  , the register of directors and officers
              for the Company are contained in the corporate minute book and are
              complete and accurate in all respects;

<PAGE>

       Directors and Officers
       ----------------------

       (w)    the present directors and officers of the Company are as follows:

              Name                                      Position
              ----                                      --------

              Jianmin Zhou                              President and Director

              Hongxing Li                               Secretary and Director

       Accuracy of Warranties
       ----------------------

       (x)    neither  this   Agreement  nor  any  document,   schedule,   list,
              certificate,  declaration  under oath or written  statement now or
              hereafter furnished by the Vendors or the Company to the Purchaser
              in connection with the transactions contemplated by this Agreement
              contains or will contain any untrue statement or representation of
              a  material  fact on the part of the  Vendors or the  Company,  or
              omits or will omit on  behalf of the  Vendors  or the  Company  to
              state a material  fact  necessary  to make any such  statement  or
              representation therein or herein contained not misleading; and

       Full Disclosure
       ---------------

       (y)    the  Vendors  have no  information  or  knowledge  of any fact not
              communicated  to the  Purchaser  and relating to the Company or to
              the Company's  Business or to the Purchased Shares which, if known
              to the  Purchaser,  might  reasonably  be  expected  to deter  the
              Purchaser from entering into this Agreement or from completing the
              transactions contemplated by this Agreement.

3.4    Survival of the Representations,  Warranties and Covenants by each of the
       -------------------------------------------------------------------------
Vendors and the Company.  To the extent they have not been fully performed at or
-----------------------
prior to the Time of Closing,  each and every representation and warranty of the
Vendors  or  the  Company   contained  in  this  Agreement  and  any  agreement,
instrument, certificate or other document executed or delivered pursuant to this
Agreement shall:

       (a)    be true and  correct on and as of the  Closing  Date with the same
              force and effect as though made or given on the Closing Date;

       (b)    remain in full force and effect notwithstanding any investigations
              conducted by or on behalf of the Purchaser; and

       (c)    survive the completion of the  transactions  contemplated  by this
              Agreement  until the second  anniversary  of the Closing  Date and
              shall  continue  in full force and  effect for the  benefit of the
              Purchaser during that period, except that:

              (i)    the  representations  and  warranties  set  out in  section
                     3.2(a) to and  including  3.2(i)  above  shall  survive and
                     continue  in full force and effect  without  limitation  of
                     time; and

              (ii)   a claim for any  breach of any of the  representations  and
                     warranties contained in this Agreement or in any agreement,
                     instrument,  certificate  or  other  document  executed  or
                     delivered  pursuant  hereto  involving  fraud or fraudulent

<PAGE>

                     misrepresentation  may be made at any  time  following  the
                     Closing Date, subject only to applicable limitation periods
                     imposed by law.

       (d)    to the extent  they have not been fully  performed  at or prior to
              the  Time of  Closing,  each and  every  covenant  of the  Vendors
              contained  in  this  Agreement  and  any  agreement,   instrument,
              certificate  or other document  executed or delivered  pursuant to
              this Agreement  shall survive the  completion of the  transactions
              contemplated   by  this   Agreement  and,   notwithstanding   such
              completion,  shall  continue  in full  force  and  effect  for the
              benefit of the Purchaser.

                                    Article 4
                                    ---------
           WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER
           ----------------------------------------------------------

4.1    Warranties,  Representations and Covenants by the Purchaser.  In order to
       -----------------------------------------------------------
induce the Vendors and the Company to enter into and consummate  this Agreement,
the Purchaser  hereby warrants to,  represents to and covenants with each of the
Vendors  and the  Company,  with the  intent  that each of the  Vendors  and the
Company will rely thereon in entering into this  Agreement and in concluding the
transactions   contemplated   herein,  that,  to  the  best  of  the  knowledge,
information and belief of the Purchaser, after having made due inquiry:

       Corporate Status of the Purchaser
       ---------------------------------

       (d)    the  Purchaser  is a  company  with  limited  liability  duly  and
              properly incorporated,  organized and validly subsisting under the
              laws of the State of Nevada being the only  jurisdiction  where it
              is  required  to be  registered  for the purpose of enabling it to
              carry on its business and own its property as presently carried on
              and owned;

       (e)    the Purchaser has good and sufficient  power,  authority and right
              to own or lease its property,  to enter into this Agreement and to
              perform its obligations hereunder;

       Authorization
       -------------

       (f)    this Agreement has been duly authorized, executed and delivered by
              the Purchaser and is a legal,  valid and binding obligation of the
              Purchaser,  enforceable against the Purchaser, as the case may be,
              by the Vendors  and/or the Company in  accordance  with its terms,
              except as enforcement may be limited by bankruptcy, insolvency and
              other laws affecting the rights of creditors  generally and except
              that equitable remedies may be granted only in the discretion of a
              court of competent jurisdiction;

       Share Capital
       -------------

       (d)    the  authorized  capital of the Purchaser  consists of 500,000,000
              shares of common stock of which 61,056,375  shares of common stock
              of the  Purchaser  have been duly  issued and are  outstanding  as
              fully paid and non-assessable;

       (e)    all of the  issued and  outstanding  shares of the  Purchaser  are
              listed and posted for trading on the Exchange;

       (f)    the  Purchaser  will  allot  and issue  the  Common  Shares on the
              Closing  Date  in  accordance   with  sections   "2.2"  and  "2.3"

<PAGE>

              hereinabove as fully paid and non-assessable in the capital of the
              Purchaser,  free and  clear of all  actual  or  threatened  liens,
              charges,  security  interests,   options,   encumbrances,   voting
              agreements,  voting trusts, demands,  limitations and restrictions
              of any  nature  whatsoever,  other  than  hold  periods  or  other
              restrictions imposed under applicable securities legislation or by
              securities regulatory authorities;

       Options
       -------

       (g)    no person has any  agreement  or option or any right or  privilege
              (whether by law,  pre-emptive or contractual)  capable of becoming
              an  agreement,  including  convertible  securities,   warrants  or
              convertible   obligations   of  any  nature,   for  the  purchase,
              subscription,  allotment  or  issuance of any  unissued  shares or
              other  securities  of the  Purchaser  except for  4,280,000  stock
              options  exercisable at prices ranging from US$2.40 to US$3.05 per
              share which have been granted to  directors,  officers,  employees
              and consultants of the Purchaser;

       Directors and Officers
       ----------------------

       (j)    the  present  directors  and  officers  of  the  Purchaser  are as
              follows:

              Name                                Position
              ----                                --------

              Xianping Wang                       President, CEO and Director
              Henry Jung                          CFO and Director
              Reg Handford                        Secretary and Director
              Edward Wong                         Director
              Peter Shandro                       Director

       Full Disclosure
       ---------------

       (k)    the  Purchaser  has no  information  or  knowledge of any fact not
              communicated  to the Vendors  and the Company and  relating to the
              Purchaser  or to the  Purchaser's  business  or to its  issued and
              outstanding  securities  which, if known to the Vendors and/or the
              Company,  might reasonably be expected to deter the Vendors and/or
              the Company from entering into this  Agreement or from  completing
              the transactions contemplated by this Agreement.

4.2    Survival  of  the  Representations,   Warranties  and  Covenants  by  the
       -------------------------------------------------------------------------
Purchaser.  To the extent they have not been fully  performed at or prior to the
---------
Time of Closing,  each representation and warranty of the Purchaser contained in
this Agreement or in any document, instrument,  certificate or undertaking given
pursuant hereto shall:

       (d)    be true and  correct on and as of the  Closing  Date with the same
              force and effect as though made or given on the Closing Date;

       (e)    remain in full force an effect  notwithstanding any investigations
              conducted by or on behalf of the Purchaser;

       (f)    survive the completion of the  transactions  contemplated  by this
              Agreement  until the second  anniversary  of the Closing  Date and
              shall  continue  in full force and  effect for the  benefit of the
              Vendors and the Company  during that  period,  except that a claim
              for  any  breach  of  any of the  representations  and  warranties
              contained  in  this  Agreement  or in any  agreement,  instrument,

<PAGE>

              certificate  or other  document  executed  or  delivered  pursuant
              hereto involving fraud or fraudulent misrepresentation may be made
              at any time following the Closing Date, subject only to applicable
              limitation periods imposed by law; and

       (d)    To the extent  they have not been fully  performed  at or prior to
              the Time of  Closing,  each and every  covenant  of the  Purchaser
              contained  in  this  Agreement  and  any  agreement,   instrument,
              certificate  or other document  executed or delivered  pursuant to
              this Agreement  shall survive the  completion of the  transactions
              contemplated   by  this   Agreement  and,   notwithstanding   such
              completion,  shall  continue  in full  force  and  effect  for the
              benefit of the Vendors and the Company.

                                    Article 5
                                    ---------
                         CONDITIONS PRECEDENT TO CLOSING
                         -------------------------------

5.1    Parties'  Conditions  Precedent  prior to the  Closing  Date.  All of the
       ------------------------------------------------------------
rights,  duties  and  obligations  of  each of the  Parties  hereto  under  this
Agreement  are subject to the following  conditions  precedent for the exclusive
benefit of each of the Parties to be fulfilled  in all  material  aspects in the
reasonable  opinion of each of the Parties or to be waived by each or any of the
Parties,  as the case may be,  as soon as  possible  after the  Execution  Date;
however, unless specifically indicated as otherwise,  not later than the Time of
Closing:

       (a)    the  specific  ratification  of the terms and  conditions  of this
              Agreement by the Board of Directors of the  Purchaser  within five
              business days of the due and complete  execution of this Agreement
              by each of the Parties  hereto (the  "Purchaser's  Ratification");
              and

       (b)    the  completion by the Purchaser of a due diligence and operations
              review  of the  Company's  Business  and  operations  prior to the
              Purchaser's Ratification (the "Purchaser's Due Diligence").

5.2    Parties'  Waiver of Conditions  Precedent.  The conditions  precedent set
       -----------------------------------------
forth in section "5.1"  hereinabove are for the exclusive benefit of each of the
Parties  hereto and may be waived by each of the Parties in writing and in whole
or in part at or prior to the Time of Closing.

5.3    The Vendors' and the  Company's  Conditions  Precedent.  The purchase and
       ------------------------------------------------------
sale  of the  Purchased  Securities  is  subject  to  the  following  terms  and
conditions  for the  exclusive  benefit of the  Vendors and the  Company,  to be
fulfilled or performed at or prior to the Time of Closing:

       (a)    the  representations  and warranties of the Purchaser contained in
              this Agreement shall be true and correct in all material  respects
              at the Time of Closing,  with the same force and effect as if such
              representations and warranties were made at and as of such time;

       (b)    all of the terms, covenants and conditions of this Agreement to be
              complied  with or performed by the Purchaser at or before the Time
              of  Closing  shall have been  complied  with or  performed  in all
              material respects;

<PAGE>

       (c)    there  shall have been  obtained,  from all  appropriate  federal,
              provincial,  municipal  or other  governmental  or  administrative
              bodies, such licenses, permits, consents, approvals, certificates,
              registrations  and  authorizations as are required by law, if any,
              to be obtained by the  Purchaser to permit the change of ownership
              of the Purchased Shares contemplated  hereby, in each case in form
              and substance satisfactory to the Vendors and the Company,  acting
              reasonably; and

       (d)    no legal or regulatory  action or  proceeding  shall be pending or
              threatened  by any  person to enjoin,  restrict  or  prohibit  the
              purchase and sale of the Purchased Shares contemplated hereby.

       If any of the  conditions  contained  in this  section  5.3  shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendors and the Company,  acting reasonably,  the Vendors and/or the Company
may, by notice to the Purchaser, terminate this Agreement and the obligations of
the Vendors, the Company and the Purchaser under this Agreement,  other than the
obligations  contained in Article 8 hereinbelow,  shall be terminated,  provided
that the Vendors and the Company may also bring an action  pursuant to Article 7
against the  Purchaser  for damages  suffered by the Vendors  and/or the Company
where the  non-performance  or non-fulfillment of the relevant condition is as a
result of a breach of covenant, representation or warranty by the Purchaser. Any
such  condition may be waived in whole or in part by the Vendors and the Company
in writing  without  prejudice to any claims it may have for breach of covenant,
representation or warranty.

5.4    Purchaser's  Conditions Precedent prior to the Closing Date. The sale and
       -----------------------------------------------------------
purchase  of the  Purchased  Shares  is  subject  to  the  following  terms  and
conditions  for the  exclusive  benefit of the  Purchaser,  to be  fulfilled  or
performed at or prior to the Time of Closing:

       (a)    the  representations and warranties of the Vendors and the Company
              contained in this Agreement  shall be true and correct at the Time
              of   Closing,   with  the  same   force  and  effect  as  if  such
              representations and warranties were made at and as of such time;

       (b)    all of the terms, covenants and conditions of this Agreement to be
              complied  with or  performed  by the Vendors and the Company at or
              before  the Time of  Closing  shall  have  been  complied  with or
              performed;

       (c)    there  shall have been  obtained,  from all  appropriate  federal,
              provincial,  municipal  or other  governmental  or  administrative
              bodies, such licenses, permits, consents, approvals, certificates,
              registrations  and  authorizations as are required to be obtained,
              if any,  by the  Vendors  and the  Company to permit the change of
              ownership of the Purchased Shares contemplated hereby;

       (d)    there shall have been no material adverse changes in the condition
              (financial  or  otherwise),   assets,   liabilities,   operations,
              earnings, the Company's Business or prospects of the Company since
              the date of the Company's Financial Statements;

       (e)    no legal or regulatory  action or  proceeding  shall be pending or
              threatened  by any  person to enjoin,  restrict  or  prohibit  the
              purchase and sale of the Purchased Shares contemplated hereby; and

       (f)    no  material  damage  by fire or other  hazard to the whole or any
              material  part of the property or assets of the Company shall have
              occurred from the date hereof to the Time of Closing.

<PAGE>

       If any of the  conditions  contained  in this  section  5.4  shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser,  acting  reasonably,  the Purchaser may, by notice to the Vendors
and the Company,  terminate this  Agreement and the  obligations of the Vendors,
the Company and the Purchaser under this  Agreement,  other than the obligations
set forth in Article 8, shall be  terminated,  provided  that the  Purchaser may
also  bring an action  pursuant  to  Article 7 against  the  Vendors  and/or the
Company  for damages  suffered by the  Purchaser  where the  non-performance  or
non-fulfillment  of  the  relevant  condition  is as a  result  of a  breach  of
covenant,  representation  or warranty by the Vendors or the  Company.  Any such
condition may be waived in whole or in part by the Purchaser  without  prejudice
to any claims it may have for breach of covenant, representation or warranty.

<PAGE>

                                    Article 6
                                    ---------
                          CLOSING AND EVENTS OF CLOSING
                          -----------------------------

6.1    Closing  and Closing  Date.  The closing  (the  "Closing")  of the within
       --------------------------
purchase and delivery of the Purchased  Shares, as contemplated in the manner as
set forth in Article  "2"  hereinabove,  together  with all of the  transactions
contemplated  by this  Agreement  shall occur on January 20, 2005 (the  "Closing
Date"),  or on such earlier or later Closing Date as may be agreed to in advance
and in writing by each of the Parties hereto,  and will be closed at the offices
of solicitors for the  Purchaser,  Devlin  Jensen,  Barristers  and  Solicitors,
located at Suite 2550 - 555 W. Hastings St.,  Vancouver,  B.C., V6B 4N5, at 2:00
p.m. (Vancouver time) on the Closing Date.

6.2    Latest  Closing Date. If the Closing Date has not occurred by February 1,
       --------------------
2005,  subject to an extension as may be mutually agreed to by the Parties for a
maximum of 14 days per extension,  then the Purchaser and the Vendors shall each
have the option to terminate this Agreement by delivery of written notice to the
other Party.  Upon delivery of such notice,  this Agreement shall cease to be of
any force and effect except for Article "8"  hereinbelow,  which shall remain in
full force and effect notwithstanding the termination of this Agreement.

6.3    Documents  to be  delivered  by the Company and the Vendors  prior to the
       -------------------------------------------------------------------------
Closing  Date.  Not  later  than  the  Closing  Date,  and  in  addition  to the
-------------
documentation which is required by the agreements and conditions precedent which
are set forth  hereinabove,  the Company and the Vendor  shall also  execute and
deliver  or  cause  to be  delivered  to  Purchaser's  counsel  all  such  other
documents,  resolutions and  instruments as may be necessary,  in the opinion of
counsel  for  the  Purchaser,   acting  reasonably,   to  complete  all  of  the
transactions  contemplated by this Agreement and including,  without limitation,
the necessary  transfer of all of the Purchased Shares to the Purchaser free and
clear  of all  liens,  security  interests,  charges  and  encumbrances,  and in
particular including, but not being limited to, the following materials:

       (a)    all  documentation  as may be necessary  and as may be required by
              the  solicitors for the Purchaser,  acting  reasonably,  to ensure
              that all of the Purchased Shares have been  transferred,  assigned
              and are  registerable  in the name of and for the  benefit  of the
              Purchaser under all applicable corporate and securities laws;

       (b)    certificates  representing the Purchased Shares  registered in the
              name of the Vendors,  duly  endorsed for transfer to the Purchaser
              and/or irrevocable stock powers  transferring the Purchased Shares
              to the Purchaser;

       (c)    certificates  representing the Purchased Shares  registered in the
              name of the Purchaser;

       (d)    a certified  copy of the  resolutions of the directors (and of the
              Vendors/shareholders, if necessary) of the Company authorizing the
              transfer by the Vendors to the Purchaser of the Purchased Shares;

       (e)    a copy of all  corporate  records  and  books  of  account  of the
              Company and  including,  without  limiting the  generality  of the
              foregoing, a copy of all minute books, share register books, share
              certificate books and annual reports of the Company;

       (f)    all remaining Business Documentation; and

<PAGE>

       (g)    all  such  other  documents  and  instruments  as the  Purchaser's
              solicitors may reasonably require.

6.4    Documents to be delivered by the Purchaser prior to the Closing Date. Not
       --------------------------------------------------------------------
later than the  Closing  Date,  and in addition  to the  documentation  which is
required  by the  agreements  and  conditions  precedent  which  are  set  forth
hereinabove,  the  Purchaser  shall  also  execute  and  deliver  or cause to be
delivered to the Company's and the Vendors'  counsel,  all such other documents,
resolutions and instruments that may be necessary, in the opinion of counsel for
the  Company  and  the  Vendors,  acting  reasonably,  to  complete  all  of the
transactions  contemplated by this Agreement and including,  without limitation,
the necessary  acceptance of the transfer of all of the Purchased  Shares to the
Purchaser  free  and  clear  of all  liens,  charges  and  encumbrances,  and in
particular including, but not being limited to, the following materials:

       (a)    a  copy  of the  resolutions  of the  directors  of the  Purchaser
              providing for the approval of all of the transactions contemplated
              hereby;

       (b)    an executed treasury order of the Purchaser  providing for the due
              issuance of all of the Purchase  Price Common  Shares to the order
              and direction of the Vendors in accordance  with section "2.2" and
              "2.3" hereinabove; and

       (c)    all such other  documents and instruments as the Company's and the
              Vendors' respective solicitors may reasonably require.

                                    Article 7
                                    ---------
                      INDEMNIFICATION AND LEGAL PROCEEDINGS
                      -------------------------------------

7.1    Indemnification.  The Parties hereto agree to indemnify and save harmless
       ---------------
the other Parties  hereto and  including,  where  applicable,  their  respective
affiliates,  directors, officers, employees and agents (each such party being an
"Indemnified  Party")  harmless  from and against and agree to be liable for any
and all losses, claims, actions,  suits,  proceedings,  damages,  liabilities or
expenses  of  whatever  nature or kind,  including  any  investigation  expenses
incurred by any  Indemnified  Party,  to which an  Indemnified  Party may become
subject by reason of the terms and conditions of this Agreement.

7.2    No  Indemnification.  This  indemnity  will not  apply in  respect  of an
       -------------------
Indemnified  Party in the  event  and to the  extent  that a court of  competent
jurisdiction in a final judgment shall determine that the Indemnified  Party was
grossly negligent or guilty of willful misconduct.

7.3    Claim of  Indemnification.  The Parties  hereto  agree to waive any right
       -------------------------
they might have of first requiring the  Indemnified  Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.

7.4    Notice of Claim.  In case any  action is brought  against an  Indemnified
       ---------------
Party in respect of which  indemnity  may be sought  against  any of the Parties
hereto, the Indemnified Party will give the relevant Party hereto prompt written
notice of any such action of which the Indemnified  Party has knowledge and such
Party will  undertake  the  investigation  and defense  thereof on behalf of the
Indemnified Party,  including the prompt consulting of counsel acceptable to the
Indemnified  Party  affected  and the  payment of all  expenses.  Failure by the

<PAGE>

Indemnified  Party to so notify  shall  not  relieve  any  Party  hereto of such
Party's obligation of  indemnification  hereunder unless (and only to the extent
that) such failure  results in a forfeiture  by any Party hereto of  substantive
rights or defenses.

7.5    Settlement.  No admission of liability  and no  settlement  of any action
       ----------
shall be made without the consent of each of the Parties  hereto and the consent
of the Indemnified Party affected, such consent not to be unreasonably withheld.

7.6    Legal  Proceedings.  Notwithstanding  that the relevant Party hereto will
       ------------------
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate  counsel in any such action and participate in
the defense  thereof,  but the fees and  expenses of such counsel will be at the
expense of the Indemnified Party unless:

       (a)    such counsel has been authorized by the relevant Party hereto;

       (b)    the  relevant  Party  hereto has not  assumed  the  defense of the
              action within a reasonable  period of time after receiving  notice
              of the action;

       (c)    the named parties to any such action include that any Party hereto
              and the Indemnified  Party shall have been advised by counsel that
              there may be a conflict of interest  between any Party  hereto and
              the Indemnified Party; or

       (d)    there are one or more legal defenses  available to the Indemnified
              Party which are different  from or in addition to those  available
              to any Party hereto.

7.7    Contribution.  If for any reason other than the gross  negligence  or bad
       ------------
faith of the  Indemnified  Party  being  the  primary  cause of the loss  claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified  Party or  insufficient  to hold them harmless,  the relevant
Party hereto shall  contribute to the amount paid or payable by the  Indemnified
Party as a result of any and all such losses,  claim,  damages or liabilities in
such  proportion  as is  appropriate  to reflect not only the relative  benefits
received by any Party  hereto on the one hand and the  Indemnified  Party on the
other,  but  also  the  relative  fault  of  the  Parties  and  other  equitable
considerations  which  may  be  relevant.  Notwithstanding  the  foregoing,  the
relevant  Party  hereto  shall in any event  contribute  to the  amount  paid or
payable  by the  Indemnified  Party,  as a result  of the loss,  claim,  damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the
Indemnified  Party),  any  excess  of such  amount  over the  amount of the fees
actually received by the Indemnified Party hereunder.

<PAGE>

                                    Article 8
                                    ---------
                                 NON-DISCLOSURE
                                 --------------

8.1    Public  Announcements  and  Disclosure  to  Regulatory  Authorities.  All
       -------------------------------------------------------------------
information  relating to the Agreement and the transaction  contemplated therein
shall be treated as confidential  and no public  disclosure shall be made by any
Party   without  the  prior   approval   of  the  Company  and  the   Purchaser.
Notwithstanding the provisions of this Article, the Parties hereto agree to make
such public  announcements and disclosure to the Regulatory  Authorities of this
Agreement promptly upon its execution all in accordance with the requirements of
applicable securities legislation and regulations.

                                    Article 9
                                    ---------
                            ASSIGNMENT AND AMENDMENT
                            ------------------------

9.1    Assignment. Save and except as provided herein, no Party hereto may sell,
       ----------
assign,  pledge  or  mortgage  or  otherwise  encumber  all or any  part  of its
respective interest herein without the prior written consent of all of the other
Parties hereto.

9.2    Amendment.  This Agreement and any provision  thereof may only be amended
       ---------
in writing and only by duly  authorized  signatories  of each of the  respective
Parties hereto.

                                   Article 10
                                   ----------
                                  FORCE MAJEURE
                                  -------------

10.1   Events.  If any  Party  hereto is at any time  prevented  or  delayed  in
       ------
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour  shortages,  power  shortages,  fires,  wars,  acts of God,  earthquakes,
storms,   floods,   explosions,   accidents,   protests  or   demonstrations  by
environmental  lobbyists  or native  rights  groups,  delays in  transportation,
breakdown  of  machinery,  inability to obtain  necessary  materials in the open
market, unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that  Party,  then the time  limited  for the  performance  by that Party of its
respective  obligations hereunder shall be extended by a period of time equal in
length to the period of each such prevention or delay.

10.2   Notice.  A Party shall,  within seven calendar  days,  give notice to the
       ------
other Parties of each event of force majeure under section  "10.1"  hereinabove,
and upon  cessation of such event shall furnish the other Parties with notice of
that  event  together  with  particulars  of the  number  of days by  which  the
obligations  of that Party  hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.

                                   Article 11
                                   ----------
                                   ARBITRATION
                                   -----------

11.1   Matters for Arbitration.  The Parties agree that all questions or matters
       -----------------------
in dispute with  respect to this  Agreement  shall be  submitted to  arbitration
pursuant to the terms hereof.

<PAGE>

11.2   Notice.  It shall be a condition  precedent  to the right of any Party to
       ------
submit any matter to  arbitration  pursuant  to the  provisions  hereof that any
Party  intending  to refer any matter to  arbitration  shall have given not less
than 10 calendar  days' prior  written  notice of its  intention to do so to the
other  Party  together  with  particulars  of  the  matter  in  dispute.  On the
expiration  of such 10 calendar  days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "11.3" hereinbelow.

11.3   Appointments.   The  Party   desiring   arbitration   shall  appoint  one
       ------------
arbitrator, and shall notify the other Party of such appointment,  and the other
Party shall,  within two calendar days after  receiving such notice,  appoint an
arbitrator,  and the two arbitrators so named,  before proceeding to act, shall,
within 10 calendar days of the  appointment  of the last  appointed  arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairman of the  arbitration  herein  provided  for. If the other Party shall
fail to appoint an arbitrator  within 10 calendar days after receiving notice of
the appointment of the first arbitrator, and if the two arbitrators appointed by
the Parties shall be unable to agree on the  appointment  of the  chairman,  the
chairman shall be appointed  under the provisions of the Commercial  Arbitration
Act (British Columbia) (the "Arbitration Act"). Except as specifically otherwise
provided in this section, the arbitration herein provided for shall be conducted
in accordance with such Arbitration Act. The chairman, or in the case where only
one arbitrator is appointed,  the single arbitrator,  shall fix a time and place
in  Vancouver,  British  Columbia,  for the purpose of hearing the  evidence and
representations  of the Parties,  and he shall preside over the  arbitration and
determine all questions of procedure not provided for under such Arbitration Act
or this section. After hearing any evidence and representations that the Parties
may submit, the single arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing,  and  deliver one copy  thereof to
each of the Parties.  The expense of the arbitration  shall be paid as specified
in the award.

11.4   Award. The Parties agree that the award of a majority of the arbitrators,
       -----
or in the case of a single  arbitrator,  of such arbitrator,  shall be final and
binding upon each of them.

                                   Article 12
                                   ----------
                             DEFAULT AND TERMINATION
                             -----------------------

12.1   Default.  The Parties hereto agree that if any Party hereto is in default
       -------
with  respect to any of the  provisions  of this  Agreement  (herein  called the
"Defaulting Party"), the non-defaulting Party (herein called the "Non-Defaulting
Party") shall give notice to the Defaulting Party designating such default,  and
within 10 calendar days after its receipt of such notice,  the Defaulting  Party
shall either:

       (a)    cure such default,  or commence  proceedings  to cure such default
              and prosecute the same to completion without undue delay; or

       (b)    give the  Non-Defaulting  Party  notice  that it denies  that such
              default has  occurred  and that it is  submitting  the question to
              arbitration as herein provided.

<PAGE>

12.2   Arbitration.  If  arbitration  is sought,  a Party shall not be deemed in
       -----------
default  until the matter  shall  have been  determined  finally by  appropriate
arbitration under the provisions of Article "11" hereinabove.

12.3   Curing the Default.  If:
       ------------------

       (a)    the  default  is not so cured  or the  Defaulting  Party  does not
              commence or diligently proceed to cure the default; or

       (b)    arbitration is not so sought; or

       (c)    the Defaulting Party is found in arbitration  proceedings to be in
              default,  and fails to cure it within five calendar days after the
              rendering of the arbitration award,

the Non-Defaulting Party may, by written notice given to the Defaulting Party at
any time while the default  continues,  terminate the interest of the Defaulting
Party in and to this Agreement.

12.4   Termination.  In addition to the foregoing it is hereby  acknowledged and
       -----------
agreed by the Parties hereto that this Agreement will be terminated in the event
that:

       (a)    the Purchaser's  Ratification is not received within five business
              days of the due and complete  execution of this  Agreement by each
              of the Parties hereto;

       (b)    the Purchaser  fails to complete a successful and  Purchaser's Due
              Diligence review of the Company's business and operations prior to
              the Purchaser's Ratification;

       (c)    the  conditions  specified in section "5.1"  hereinabove  have not
              been satisfied at or prior to the Time of Closing;

       (d)    either of the Parties  hereto has not either  satisfied  or waived
              each of their respective  conditions  precedent at or prior to the
              Time of Closing in accordance  with the  provisions of Article "5"
              hereinabove;

       (h)    either of the Parties hereto has failed to deliver or caused to be
              delivered  any  of  their  respective  documents  required  to  be
              delivered by Articles "5" and "6"  hereinabove  at or prior to the
              Time of Closing in accordance  with the provisions of Articles "5"
              and "6"; or

       (i)    by Closing has not occurred on or before February 1, 2005, or such
              later date, all in accordance with section "6.2" hereinabove; or

       (j)    by agreement in writing by each of the Parties hereto;

and in such event this  Agreement  will be terminated and be of no further force
and effect other than the obligations under Article "8" hereinabove.

<PAGE>

                                   Article 13
                                   ----------
                                     NOTICE
                                     ------

13.1   Notice. Each notice, demand or other communication  required or permitted
       ------
to be given  under  this  Agreement  shall be in  writing  and  shall be sent by
prepaid  registered  mail  deposited  in a post  office  addressed  to the Party
entitled to receive the same,  or  delivered  to such Party,  at the address for
such Party specified above. The date of receipt of such notice,  demand or other
communication  shall be the date of delivery thereof if delivered,  or, if given
by registered  mail as aforesaid,  shall be deemed  conclusively to be the third
calendar  day after the same shall  have been so  mailed,  except in the case of
interruption  of postal  services for any reason  whatsoever,  in which case the
date of  receipt  shall  be the  date on  which  the  notice,  demand  or  other
communication is actually received by the addressee.

13.2   Change  of  Address.  Either  Party may at any time and from time to time
       -------------------
notify the other  Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.

<PAGE>

                                   Article 14
                                   ----------
                               GENERAL PROVISIONS
                               ------------------

14.1   Entire Agreement. This Agreement constitutes the entire agreement to date
       ----------------
between  the  Parties   hereto  and   supersedes   every   previous   agreement,
communication,   expectation,  negotiation,   representation  or  understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties  with respect to the subject  matter of this  Agreement  and  including,
without limitation,  the agreement as between the Purchaser,  the Vendor and the
Company.

14.2   Enurement.  This  Agreement  will  enure  to the  benefit  of and will be
       ---------
binding  upon  the  Parties   hereto,   their   respective   heirs,   executors,
administrators and assigns.

14.3   Schedules.  The Schedules to this  Agreement are hereby  incorporated  by
       ---------
reference into this Agreement in its entirety.

14.4   Time of the Essence. Time will be of the essence of this Agreement.
       -------------------

14.5   Representation  and  Costs.  It is  hereby  acknowledged  by  each of the
       --------------------------
Parties hereto that, as between the Parties  hereto,  Devlin Jensen,  Barristers
and Solicitors,  acts solely for the Purchaser, and that each of the Vendors and
the  Company  have been  advised by the  Purchaser  and Devlin  Jensen to obtain
independent legal advice with respect to their respective  reviews and execution
of this Agreement.  In addition, it is hereby further acknowledged and agreed by
the Parties  hereto that each Party to this  Agreement will bear and pay its own
costs,  legal and  otherwise,  in connection  with its  respective  preparation,
review and  execution  of this  Agreement,  and, in  particular,  that the costs
involved in the preparation of this Agreement, and all documentation necessarily
involved thereto, by Devlin Jensen shall be at the cost of the Purchaser.

14.6   Applicable  Law.  The  situs  of this  Agreement  is  Vancouver,  British
       ---------------
Columbia and for all purposes this Agreement will be governed exclusively by and
construed and enforced in accordance with the laws and Courts  prevailing in the
Province of British Columbia.

14.7   Further  Assurances.  The Parties hereto  hereby,  jointly and severally,
       -------------------
covenant and agree to forthwith,  upon request, execute and deliver, or cause to
be executed and delivered,  such further and other deeds, documents,  assurances
and  instructions  as may be required by the Parties hereto or their  respective
counsel in order to carry out the true nature and intent of this Agreement.

14.8   Severability and Construction.   Each  Article, section,  paragraph, term
       -----------------------------
and provision of this Agreement,  and any portion  thereof,  shall be considered
severable,  and if, for any reason,  any portion of this Agreement is determined
to be invalid,  contrary to or in conflict with any applicable present or future
law,  rule or  regulation  in a final  unappealable  ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to any of the Parties
hereto is a party,  that ruling shall not impair the  operation  of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise

<PAGE>

intelligible  (all of which shall remain  binding on the Parties and continue to
be given full force and  agreement as of the date upon which the ruling  becomes
final).

14.9   Captions.  The captions,  section  numbers,  Article numbers and Schedule
       --------
numbers  appearing in this  Agreement are inserted for  convenience of reference
only and shall in no way define, limit, construe or describe the scope or intent
of this Agreement nor in any way affect this Agreement.

14.10  Currency.  Unless otherwise  stipulated,  all references to money amounts
       --------
herein shall be in lawful money of the United States.

14.11  Counterparts.  This  Agreement may be signed by the Parties  hereto in as
       ------------
many counterparts as may be necessary,  and via facsimile if necessary,  each of
which so signed being deemed to be an original  and such  counterparts  together
constituting  one and the  same  instrument  and,  notwithstanding  the  date of
execution, being deemed to bear the effective Execution Date as set forth on the
front page of this Agreement.

14.12  No  Partnership  or  Agency.  The  Parties  hereto  have  not  created  a
       ---------------------------
partnership  and  nothing  contained  in  this  Agreement  shall  in any  manner
whatsoever  constitute any Party the partner,  agent or legal  representative of
any other  Party,  nor create any  fiduciary  relationship  between them for any
purpose  whatsoever.  No Party shall have any authority to act for, or to assume
any  obligations or  responsibility  on behalf of, any other party except as may
be,  from  time to time,  agreed  upon in  writing  between  the  Parties  or as
otherwise expressly provided.

14.13  Consents and Waivers. No consent or waiver expressed or implied by either
       --------------------
Party  hereto in respect  of any  breach or  default  by any other  Party in the
performance by such other of its obligations hereunder shall:

       (a)    be valid  unless it is in  writing  and  stated to be a consent or
              waiver pursuant to this section;

       (b)    be relied  upon as a consent  to or waiver of any other  breach or
              default of the same or any other obligation;

       (c)    constitute a general waiver under this Agreement; or

       (d)    eliminate  or modify  the need for a  specific  consent  or waiver
              pursuant to this section in any other or subsequent instance.

       IN WITNESS WHEREOF each of the Parties hereto has hereunto  executed this
       ------------------
Agreement  as of the  Execution  Date as set  forth  on the  front  page of this
Agreement.

SIGNED and DELIVERED by             )
JIANMIN ZHOU, a Vendor              )
------------                        )
herein, in the presence of:         )
                                    )
/s/ Ding Liu                        )
------------------------------------)
Witness Signature                   )      /s/ Jianmin Zhou
                                    )     ---------------------------
                                    )          JIANMIN ZHOU

<PAGE>

B-26F Oriental Kenzo, No. 48        )
------------------------------------)
Dongzhimenwai, Beijing              )
------------------------------------)
Witness Address                     )
                                    )
Ding Liu, Dept. Manager             )
------------------------------------)
Witness Name and Occupation         )

SIGNED and DELIVERED by             )
HONGXING LI, a Vendor               )
-----------                         )
herein, in the presence of:         )
                                    )
/s/ Li Ai Ping                      )
------------------------------------)
Witness Signature                   )      /s/ Hong Xing Li
                                    )     ---------------------------
                                    )          HONGXING LI
B-26F Oriental Kenzo, No. 48        )
------------------------------------)
Dongzhimenwai, Beijing              )
------------------------------------)
Witness Address                     )
                                    )
Li Ai Ping, Dept. Manager           )
------------------------------------)
Witness Name and Occupation         )

BEIJING BOHENG INVESTMENTS          )
--------------------------          )
LTD.,                               )
----                                )
the Company herein,                 )
                                    )
                                    )
Per:     /s/ Jianmin Zhou           )
------------------------------------)
Authorized Signatory                )
                                    )
         Jianmin Zhou, President    )
------------------------------------)
(print name and title)              )

<PAGE>

XINHUA CHINA LTD., the              )
-----------------                   )
Purchaser herein,                   )
                                    )
                                    )
Per:     /s/ Xianping Wang          )
------------------------------------)
Authorized Signatory                )
                                    )
Xianping Wang, President and CEO    )
------------------------------------)
(print name and title)              )

<PAGE>

                                   Schedule A
                                   ----------

       This is Schedule  "A" to that  certain  Share  Purchase  Agreement  among
Xinhua China Ltd.,  Beijing  Boheng  Investments  Ltd. and the  shareholders  of
Beijing Boheng Investments Ltd.

                        Purchased Securities and Vendors
                        --------------------------------

         Authorized Capital:                       $___________ RMB
         ------------------

         Paid Up Capital:                          $50,000,000 RMB
         ---------------

         Vendor:                                   Purchased Shares:
         ------                                    -----------------
                           Jianmin Zhou:           57.5% of registered capital
                           ------------
                           South Construction Street, No. 7
                           Qiaodong District
                           Shijiazhuang, China

                           Hongxing Li:            37.5% of registered capital
                           -----------
                           Room 702, Block 19
                           Capital Normal University
                           Haidian District
                           Beijing, China

<PAGE>

                                   Schedule B
                                   ----------

       This is Schedule  "B" to that  certain  Share  Purchase  Agreement  among
Xinhua China Ltd.,  Beijing  Boheng  Investments  Ltd. and the  shareholders  of
Beijing Boheng Investments Ltd.

                       Permits, Licenses and Certificates
                       ----------------------------------

A.     Request for instruction by the Beijing City Bureau of Commerce  regarding
       the formation of the Joint Venture of Xinhua  Publications  Circulation &
       Distribution  Co.  Ltd.  (issued by Beijing  City  Bureau of  Commerce on
       November 17, 2004)

B.     Official reply from the Ministry of Commerce  regarding  approval for the
       formation of the Xinhua Publications  Circulation & Distribution Co. Ltd.
       (issued by  Ministry of  Commerce  of the  People's  Republic of China on
       December 22, 2004)

C.     Certificate of Approval for  Establishment  of  Enterprises  with Foreign
       Investment in the People's Republic of China.  (issued by the Ministry of
       Commerce of the People's Republic of China on December 31, 2004)

D.     People's Republic of China Publication Business Permit (issued by Beijing
       City Bureau of News Publication on December 28, 2004)

E.     People's Republic of China Publication  Business Permit (copy) (issued by
       Beijing City Bureau of News Publication on December 28, 2004)

F.     Enterprise  Corporation Business License (issued by the General Office of
       the State Industry and Commerce  Administration  of the People's Republic
       of China on December 31, 2004)

                     Refer to the materials attached hereto
                     --------------------------------------

                                   -----------

<PAGE>

                                  (Translation)

                         Beijing City Bureau of Commerce
                         -------------------------------

Jingshangzi (2004) No.778                            Signed & issued by: Zhou He
--------------------------------------------------------------------------------

    Request for instruction by the Beijing City Bureau of Commerce regarding
                      the formation of the Joint Venture of
             Xinhua Publications Circulation & Distribution Co. Ltd

To:  The Ministry of Commerce

The Xinhua Bookstore-Main Store, Beijing Boheng Investments Ltd, Pac-poly

Investments Ltd, the People's Publishing House, the People's Literature

Publishing House, the Great Encyclopedia of China Publishing House, the

Commercial Press, Sanlian Bookstore, the China Map Publishing House, Jieli

Publishing House and the Beijing Forbidden City Investment Management Ltd intend

to form the Joint Venture of Xinhua Publications Circulation & Distribution Co.

Ltd in Beijing, with total investment and registered capital at Three Hundred

Million Renminbi. The business scope will be the wholesale and retail of

domestic (excluding Hong Kong, Macau and Taiwan) publication of books,

newspapers, periodicals, and electronic publications. The term of business will

be for thirty years.

The relevant information is hereby submitted for examination and approval.

[Seal of the Beijing City Bureau of Commerce]

November 17, 2004

(Person of contact: Zhang Zhencheng. Tel: 6523-6688-2020)

Keywords: Foreign trade. Joint venture. Contract. Constitution. Request for

Instruction.

Office of the Beijing City Bureau of Commerce.      Printed on November 18, 2004

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my

<PAGE>

knowledge and belief, the document above is a true and accurate English
translation of a document in the Chinese language entitled [Beijing City Bureau
of Commerce].

Signed:  /s/ Miguel Tu                               Date: December 3, 2004
         -----------------------
             Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters Council

<PAGE>

                                  (Translation)

     Ministry of Commerce of the People's Republic of China (official reply)
     -----------------------------------------------------------------------

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

                                                                SZP [2004] #2021

     Official reply from the Ministry of Commerce regarding approval for the
     -----------------------------------------------------------------------
     formation of the Xinhua Publications Circulation & Distribution Co. Ltd
     -----------------------------------------------------------------------

To:  Beijing City Bureau of Commerce

The document: <<Request for instruction by the Beijing City Bureau of Commerce

regarding the formation of the Joint Venture of Xinhua Publications Circulation

& Distribution Co. Ltd>> (JSZ [2004] #778) and other relevant information have

been received. After examination and verification of same, here is our reply:

5.   We approve the formation in Beijing of the Sino-foreign Joint Investment

     Enterprise, the "Xinhua Publications Circulation & Distribution Co. Ltd"

     (hereinafter referred to as the Joint Venture), by the Xinhua

     Bookstore-Main Store; Beijing Boheng Investments Ltd; the People's

     Publishing House; the People's Literature Publishing House; the Great

     Encyclopedia of China Publishing House; the Commercial Press; Sanlian

     Bookstore; the China Map Publishing House; the Beijing Forbidden City

     Investment Management Ltd; Jieli Publishing House; and Pac-poly Investments

     Ltd registered in the British Virgin Islands. We also approve the Joint

     Investment Contract signed by the Parties mentioned above on September 22,

     2004 and the Constitution of the Joint Venture.

6.   The total investment of the Joint Venture is RMB(Y)300,000,000.00 and the

     registered capital is RMB(Y)300,000,000.00. Xinhua Bookstore-Main Store

     will contribute RMB(Y)120,000,000.00 by way of house property, lands, goods

     in kind and other intangible assets, accounting for 40% of the registered

     capital; Beijing Boheng Investments Ltd will contribute

     RMB(Y)92,000,000.00, accounting for 30.67% of the registered capital;

     Pac-poly Investments Ltd will contribute RMB(Y)81,000,000.00 by way of cash

     in foreign currency, accounting for 27% of the registered capital; the

     People's Publishing House will contribute RMB(Y)600,000.00, accounting for

     0.2% of the registered capital; the People's Literature Publishing House

     will contribute RMB(Y)600,000.00, accounting for 0.2% of the registered

     capital; the Great Encyclopedia of China Publishing House will contribute

<PAGE>

     RMB(Y)600,000.00, accounting for 0.2% of the registered capital; the

     Commercial Press will contribute RMB(Y)600,000.00, accounting for 0.2% of

     the registered capital; Sanlian Bookstore will contribute RMB(Y)600,000.00,

     accounting for 0.2% of the registered capital; the China Map Publishing

     House will contribute RMB(Y)2,000,000.00, accounting for 0.67% of the

     registered capital; Jieli Publishing House will contribute

     RMB(Y)1,000,000.00, accounting for 0.33% of the registered capital; the

     Beijing Forbidden City Investment Management Ltd will contribute

     RMB(Y)1,000,000.00, accounting for 0.33% of the registered capital. The

     Parties of the Joint Venture shall pay 20% of their respective share of the

     registered capital within three months of the issuance of the Business

     Licence of the Joint Venture. The balance shall be paid up within six

     months of the issuance of the Business Licence.

7.   The scope of business of the Joint Venture is as follows: "The wholesale

     and retail of the domestic (excluding Hong Kong, Macau and Taiwan) edition

     of books, newspapers, periodicals and electronic publications; and

     warehousing."

8.   The term of business of the Joint Venture is thirty years.

Please notify the Enterprise to come to the Ministry with this Official Reply to

pick up the Certificate of Approval and to complete all necessary transactions.

December 22, 2004

[Seal of the Ministry of Commerce of the People's Republic of China]

cc: General Customs, General Revenue, General Industry & Commerce, Foreign

Exchange Bureau. Ministry of Commerce: Leadership (Ma, Liao), Department of

Foreign Capital (5), Personnel on duty, Filing.

General Office of the Ministry of Commerce.         Printed on December 24, 2004

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my
knowledge and belief, this two page document is a true and accurate English
translation of a document in the Chinese language that appears to be an
[Official reply from the Ministry of Commerce].

<PAGE>

Signed:    /s/ Miguel Tu                               Date: January 2, 2005
          -----------------------
               Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters Council

<PAGE>

                                  (Translation)

                             CERTIFICATE OF APPROVAL
                             -----------------------
                  FOR ESTABLISHMENT OF ENTERPRISES WITH FOREIGN
                  INVESTMENT IN THE PEOPLE'S REPUBLIC OF CHINA

Approval Number:                           SWZ ZS [2004] 0329

Code for Import & Export Enterprise:       1100717853756

Date of Approval:                          December 22, 2004

Date of Issue:                             December 31, 2004

Serial Number of Certificate:              1100016711

Name of Enterprise:                        Xinhua Publications Circulation &
                                           Distribution Co. Ltd

Address:                                   135 Beilishi Lu, Dongchengqu, Beijing

Type of Business:                          Sino-foreign Joint Venture

Duration of Operation:                     Thirty years

Total Investment:                          Three Hundred Million (Y) Renminbi

Registered Capital:                        Three Hundred Million (Y) Renminbi

Scope of Business:                         Wholesale & retail of domestic
                                           (excluding Hong Kong, Macau & Taiwan)
                                           edition of books, newspapers,
                                           periodicals and electronic
                                           publications; and warehousing.

<TABLE>
<CAPTION>
Name of Investor                                     Place of Registration              Capital Contribution
-----------------                                    ---------------------              --------------------
<S>                                                  <C>                        <C>
Xinhua Bookstore-Main Store                          China                      RMB(Y)120,000,000.00 in house property,
                                                                                lands, goods in kind & intangible assets.
Beijing Boheng Investments Ltd                       China                      RMB(Y)92,000,000.00
China Map Publishing House                           China                      RMB(Y)2,000,000.00
Jieli Publishing House                               China                      RMB(Y)1,000,000.00
Beijing Forbidden City Investment Management Ltd     China                      RMB(Y)1,000,000.00
People's Publishing House                            China                      RMB(Y)600,000.00
People's Literature Publishing House                 China                      RMB(Y)600,000.00
The Great Encyclopedia of China Publishing House     China                      RMB(Y)600,000.00
Sanlian Bookstore                                    China                      RMB(Y)600,000.00
The Commercial Press                                 China                      RMB(Y)600,000.00
Pac-poly Investments Ltd                             British Virgin Islands     RMB(Y)81,000,000.00
</TABLE>

[Seal of the Ministry of Commerce of the People's Republic of China]

<PAGE>

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my
knowledge and belief, the document above is a true and accurate English
translation of a document in the Chinese language entitled [Certificate of
Approval].

Signed:  /s/ Miguel Tu                                 Date: January 2, 2005
         ------------------------
             Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters Council

<PAGE>

                                  (Translation)

                           People's Republic of China
                           --------------------------

                           Publication Business Permit
                           ---------------------------

XCF JP No.W0001

Name:                              Xinhua Publications Circulation &
                                   Distribution Co. Ltd

Place of Business:                 135 Beilishi Lu, Xichengqu, Beijing

Legal Representative:              Liu Guohui

Registered Capital:                RMB(Y)300,000,000.00

Type of Capital:                   Sino-foreign joint capital.

Scope of Business:                 Wholesale and retail of domestic edition of
                                   books, newspapers, periodicals and electronic
                                   publications.

Valid until:                       December 31, 2007

Issued by:                         (seal) [Seal of Beijing City Bureau of News
                                   Publication]

December 28, 2004

            Produced by the General Office of News Publication of the
                           People's Republic of China

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my
knowledge and belief, the document above is a true and accurate English
translation of a document in the Chinese language that appears to be a
[Publication Business Permit].

Signed:   /s/ Miguel Tu                                Date: January 2, 2005
          -----------------------
              Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters Council

<PAGE>

                                  (Translation)

                           People's Republic of China
                           --------------------------
                       Publication Business Permit (copy)
                       ----------------------------------
                                 XCF JP No.W0001

Name:                              Xinhua Publications Circulation &
                                   Distribution Co. Ltd

Place of Business:                 135 Beilishi Lu, Xichengqu, Beijing

Legal Representative:              Liu Guohui

Registered Capital:                RMB(Y)300,000,000.00

Type of Capital:                   Sino-foreign joint capital.

Scope of Business:                 Wholesale and retail of domestic edition of
                                   books, newspapers, periodicals and electronic
                                   publications.

Valid until:                       December 31, 2007

Issued by:                         [Seal of Beijing City Bureau of News
                                   Publication]

December 28, 2004

            Produced by the General Office of News Publication of the
                           People's Republic of China

The following types of business have been approved:

Books, newspapers, periodicals and electronic publications.

Seal of approving Department.  [Approval Seal for Publication & Distribution of
                               the Beijing City Bureau of News Publication]

December 28, 2004

N.B.
5.   Any changes in the items registered, or termination of business or
     publication must go through proper procedures with the relevant Government
     Departments.
6.   All regulations on the publication market must be observed. Business must
     be conducted in accordance with the law and the supervision by supervising
     Departments must be obeyed.
7.   This Permit is not to be rented out, sold, transferred, altered or
     duplicated. Loss of this Permit should be reported promptly.
8.   This Permit will be inspected yearly. Not participating in the yearly
     inspection will render this Permit invalid.

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my
knowledge and belief, the document above is a true and accurate English
translation of a document in the Chinese language that appears to be a
[Publication Business Permit (copy)].

<PAGE>

Signed:   /s/ Miguel Tu                             Date: January 2, 2005
          --------------------------
              Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters Council

<PAGE>

                                  (Translation)

                             Enterprise Corporation
                             ----------------------

                                Business Licence
                                ----------------

Licence No. 0891977

Registration No.                  QHG 001105

Date of Incorporation:            December 31, 2004

Name:                             Xinhua Publications Circulation &
                                  Distribution Co. Ltd

Address:                          135 Beilishi Lu, Xichengqu, Beijing

Legal Representative:             Liu Guohui

Registered Capital:               Three Hundred Million (Y) RMB (paid up
                                  registered capital 0 U.S. Dollar)

Type of Business:                 Sino-foreign Joint Venture

Scope of Business:                Wholesale and retail of domestic (excluding
                                  Hong Kong, Macau, and Taiwan) edition of
                                  books, newspapers, periodicals and electronic
                                  publications; and warehousing.

Branches:

Term of Validity:                 From December 31, 2004 until December 30, 2034

[Seal of the General Office of the State Industry and Commerce Administration of

the People's Republic of China]

December 31, 2004

<PAGE>

--------------------------------------------------------------------------------
Translator's Declaration:
-------------------------
I, Miguel Tu, Certified Translator and Member in good standing of the Society of
Translators and Interpreters of British Columbia, attest that, to the best of my
knowledge and belief, the document above is a true and accurate English
translation of a document in the Chinese language entitled [Enterprise
Corporation Business Licence].

Signed:   /s/ Miguel Tu                             Date: January 4, 2005
          ---------------------------
              Miguel Tu

Certified Translator. STIBC Membership No. 04-10-0685          Tel: 604-728-6181
Attorney General Accredited & STIBC Certified Court Interpreter
Member of Canadian Translators, Terminologists & Interpreters CouncilUnassociated Document

Exhibit 4.4

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and entered into as of the 23rd day of November, 2004 by and between Midway Games Inc., a Delaware corporation, having its principal executive offices at 2704 West Roscoe Street, Chicago, Illinois 60618 (the “Corporation”) and Christine Hsu residing at 14216 Oneida Court, Moorpark, California 93021 (“Employee”). 

W I T N E S S E T H:

 

WHEREAS, Employee, who has not previously been employed by the Corporation or its subsidiaries, is accepting an offer of employment to serve the Corporation as an employee at the Corporation’s wholly-owned subsidiary; and 

WHEREAS, simultaneously herewith Employee and Midway Studios-Los Angeles Inc., a California corporation, are entering into an Employment Agreement (the “Employment Agreement”); and

 

WHEREAS, simultaneously herewith Employee is entering into that certain Agreement and Plan of Reorganization (“Merger Agreement”) dated November 23, 2004 by and among Corporation, MCWSP Acquisition, Inc., CWS Entertainment Ltd. d/b/a Paradox Development and Employee (“Target”), whereby Employee is receiving shares of the Corporation’s common stock, $.01 par value (“Common Stock”) in exchange for her shares of Target. 

 

NOW, THEREFORE, in consideration of the foregoing, and the mutual agreements herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as a material inducement for Corporation to enter into the Merger Agreement and, on the terms and conditions, and subject to the restrictions, herein set forth:

Section 1. Definitions.

 

As used in this Agreement, the following terms shall have the following meanings:

A.  “Date of Merger” means November 23, 2004, the date on which the reorganization contemplated by the Merger Agreement is consummated.

 

B.  “Period of Restriction” means, with respect to Restricted Shares, the period of time between the Date of Merger and the dates set forth in Section 3 hereof.

 

C.  “Restricted Shares” means 71,429 shares of Common Stock that Employee may forfeit pursuant to Sections 2 and 3 below.

 

Section 2. Forfeiture of Shares upon Termination of Employment during Period of Restriction. Employee shall immediately forfeit to the Corporation all Restricted Shares that have not previously been released from the restrictions under Section 3 hereof, without any consideration paid to Employee, and, thereafter, Employee shall have no further rights with respect to such Restricted Shares upon either (i) the voluntary termination by Employee of
her employment under the Employment Agreement during the Period of Restriction, or (ii) if the services of Employee under the Employment Agreement shall be terminated by the Corporation during the Period of Restriction for Cause (as such term is defined in the Employment Agreement). 

 

Section 3. Lapse of the Period of Restriction. The Period of Restriction shall lapse, and the forfeiture provisions of Section 2 hereof shall no longer be applicable as to Restricted Shares held by 

 

	 
	 	 	 
	

	 

or on behalf of Employee according to the following schedule, if Employee shall have been continuously employed by the Corporation from the Date of Merger through the date of such lapse: (i) as to 23,810 shares of the Restricted Shares, on or after the date which is twelve months after the Date of Merger; (ii) as to 23,810 shares of the Restricted Shares, on or after the date which is twenty-four months after the Date of Merger; and (iii) as to the remaining 23,809 shares of the Restricted Shares, on or after the date which is thirty-six months after the Date of Merger. The forfeiture provisions under Section 2 above will lapse (a) upon the termination by the Corporation of Employee’s services to the Corporation without “cause” (as such term is defined in the Employment Agreement), (b) upon
the termination by the Employee of her services with the Corporation for “good reason” (as such term is defined in the Employment Agreement), or (c) upon the death or disability of Employee (upon the death of the Employee, the Employee’s estate shall receive the remaining Restricted Shares without restriction under this Agreement).

 

Section 4. Limitations on Transfer during Period of Restriction. Restricted Shares may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered during the Period of Restriction, and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by voluntary act of Employee or of any agent of Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Corporation or any agent or any
custodian holding certificates for such Restricted Shares during the Period of Restriction.

 

Section 5. Stockholder Rights during Period of Restriction. Unless and until the Restricted Shares are forfeited as set forth in Section 2 hereof, Employee shall have all of the rights of a stockholder of the Corporation with respect to Restricted Shares, including the right to vote and to receive dividends on the Restricted Shares, during the Period of Restriction. 

 

Section 6. Registration Rights. The Corporation, at its cost, shall promptly prepare and file a registration statement under the Securities Act of 1933, as amended (the “Act”) with respect to the resale of the Restricted Shares and shall cause such registration statement to become effective as promptly as practical and shall cause such registration statement to remain in effect (together with a resale prospectus at all times meeting the requirements of the Act) until such registration statement is no longer required for
Employee to publicly offer and sell the Restricted Shares.

 

Section 7. Restricted Shares as Investment. Employee agrees that all Restricted Shares awarded hereunder are being acquired in good faith for investment purposes only and not for sale or distribution, except pursuant to a registration statement or an applicable exemption from registration under the Act. The Corporation may place a “stop transfer” order with respect to the Restricted Shares with its transfer agent unless the Restricted Shares are registered under the Act.

 

Section 8. Legend. Each certificate evidencing the Restricted Shares shall bear a legend referring to this Agreement and to the fact that such Restricted Shares are subject to the forfeiture provisions of Section 2 hereof during the Period of Restriction. The Corporation shall cause certificates without such legend to be issued for any of the Restricted Shares as and when the Period of Restriction lapses. Each certificate may also bear a restrictive legend, in the discretion of the Corporation, until registered. The form of such
legends shall be as follows:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A RESTRICTED STOCK AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE. 

	 
	 	2 	 
	

	 

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION'S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.

Employee agrees to deliver to the Corporation for cancellation, upon request of the Corporation, any certificate representing Restricted Shares that have been forfeited.

Section 9. Adjustment in Certain Events. If there is any change in the Common Stock by reason of stock dividends, split-ups, mergers, consolidations, reorganizations, combinations or exchanges of shares or the like, each Restricted Share under this Agreement shall be adjusted in the same manner as any other share of the Common Stock and the provisions of this Agreement shall extend not only to the number of Restricted Shares awarded hereunder, but also to all additional shares of Common Stock or other securities received by Employee
pursuant to any such change with respect to the Restricted Shares granted hereunder, which additional shares of Common Stock or other securities shall be deemed to be Restricted Shares for purposes of this Agreement.

 

Section 10. Enforceability. Should a court of competent jurisdiction deem any of the provisions in this Agreement to be unenforceable in any respect, it is the intention of the parties to this Agreement that this Agreement be enforced to the greatest extent deemed to be enforceable. 

 

Section 11. Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Illinois, without giving effect to any conflicts of law rule or principle that might require the application of the laws of another jurisdiction.

 

Section 12. Withholding. The Corporation may withhold, and establish from time to time appropriate procedures to provide for payment or withholding of, such income or other taxes as may be required by law to be paid or withheld in connection with the Restricted Shares. Employee shall comply with any procedures established from time to time by the Corporation to ensure that the Corporation receives prompt notice of the occurrence of any event which may create, or affect the timing or amount of, any obligation to pay or withhold any
such taxes or which may make available to the Corporation any tax deduction resulting from the occurrence of such event.

 

Section 13. Section 83(b) Tax Election. Employee understands that he may elect to be taxed at the time the Restricted Shares are acquired rather than when such shares cease to be subject to forfeiture restrictions by filing an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), with the Internal Revenue Service within thirty (30) days after the Date of Merger. A form for making this election is attached as Exhibit 1 hereto. Employee understands that the failure to make this filing
within the thirty (30) day period will result in the recognition of ordinary income by Employee as the forfeiture restrictions on the Restricted Shares lapse measured by the value of the Restricted Shares at that time. Employee agrees that he is relying on his own tax advisors and is not relying on the Corporation with respect to any election that he may make under Section 83(b) of the Code.

 

	 
	 	 3	 
	

	 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day first written above.

MIDWAY GAMES INC.

By:  /s/ Thomas E. Powell            

Name: Thomas E. Powell 

Title: Executive Vice President - Finance, 

CFO and Treasurer

AGREED AND ACCEPTED:

By:       /s/ Christine Hsu                   

Christine Hsu

	  
	 	4

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