EXHIBIT 4.2



                           KOSTECH SMALLCAP RESEARCH
                             http://www.kostech.com
                                 1-888-KOSTECH

This agreement is hereby entered into on the 9 day of January,  1997 between Tom
Kosta and Heng Fai China Industries.

Heng Fai China Industries Inc. (hereinafter referred to as "the company") hereby
enters into agreement with Tom Kosta  (hereinafter  referred to as "Consultant")
for the purpose of  maintaining an ongoing  Internet  based  investor  relations
program.

Consultant will publish a corporate  profile for the company and distribute this
profile to its subscriber base when appropriate.  Consultant  reserves the right
to make final decisions regarding when and if this Research Bulletin is released
and the content therein.

In addition,  all subscribers to Consultant's service will be updated frequently
on the progress of the company. This contract will run for a period of 12 months
from date incepted.

The complete cost for this program with regular  mailings to Consultants  entire
subscriber base is 50,000 stock options to be dispersed as follows:

     25,000 at 1.00 six month term
     25,000 at 1.25 six month term

The common  stock of Heng Fai China  Industries  Inc.  to be issued to Tom Kosta
("Consultant")  as  compensation  shall  be  properly  authorized,  issued,  and
registered  under  the  Securities  act  of  1933,  on a form  S-8  registration
statement or other  appropriate  form.  The  Consultant  shall not engage in any
direct  or  indirect  capital  raising  activities  on  behalf of Heng Fai China
Industries Inc. and/or its affiliates.

Agreed and Accepted:

Tom Kosta                                 Robert Trapp/HFCI

By:   /s/ Tom Kosta                       By:  /s/ Robert H. Trapp, Director
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Date:  1-09-97                            Date:  1-13-97
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               Tom Kosta