Document:

<PAGE>

                                                                    EXHIBIT 10.9

                      Sino-Foreign Joint Venture Contract
                               December 31, 1999

<TABLE>
<CAPTION>
<S>      <C>
         DEFINITIONS

I.       CONTRACTING PARTIES

II.      ESTABLISHMENT OF SINO-FOREIGN JOINT VENTURE COMPANY

III.     SCOPE AND SCALE OF OPERATION

IV       TOTAL CAPITAL INVESTMENT AND REGISTERED CAPITAL

V.       RESPONSIBILITIES OF THE PARTIES

VI.      BOARD OF DIRECTORS

VII.     OPERATION MANAGEMENT

VIII.    LABOR MANAGEMENT

IX       TAX, FINANCE AND AUDICCOUNTING

X.       INSURANCE

XI.      CONFIDENTIALITY

XII.     TERM OF CONTRACT

XIII.    TERMINATION AND CLOSE OF ACCOUNTS

XIV      BREACH OF CONTRACT

XV.      FORCE OF MAJEURE

XVI.     RESOLUTION OF DISPUTES

XVII.    GOVERNING LAW

XVIII    EFFECTIVENESS AND OTHERSMISCELLANEOUS

IXX      LANGUAGE
</TABLE>

                                  DEFINITIONS

      The following terms should contain the following meanings unless otherwise
defined in this Contract:

0.01  "Party A"
<PAGE>

      Beijing Sino-Tech Science and Technology Development Center, a limited
      liability corporation legally registered in the People's Republic of
      China, located at #26, 4th Street, Chuangye Zhong Lu, Shangdi Information
      Industry Base, Haidian District, Beijing, 100085, P. R. China.

0.02  "Party B"
      China Education and Research Network Center, a non-for-profit organization
      legally registered in the People's Republic of China, or its wholly owned
      subsidiary, located at Central Building #224, Tsinghua University,
      Beijing, 100084, P. R. China.

0.03  "Party C"
      ASPAC Communications, Inc., a Delaware corporation, located at 2049
      Century Park East, Suite 1200, Los Angeles, California, 90067, U. S. A.

0.04  "Contract"
      Refers to the Sino-foreign Cooperative Joint Venture Contract entered
      between Party A, Party B and Party C on December 31, 1999.

0.05  "PRC" or "China"
      Refers to the People's Republic of China.

0.06  "Approval Authorities"
      Refers to People's Republic of China's Ministry of Foreign Trade and
      Economic Cooperation or State Counsel authorized organizations.

0.07  "Articles"
      Refers to Articles of Association of the Sino-foreign Joint Venture
      company, formed by Party A, Party B and Party C based on this Contract.

0.08  the "Company"
      Refers to the Sino-Foreign Joint Venture company, a limited liability
      corporation, formed by Party A, Party B and Party C based on this
      Contract.

0.09  "Effective Date"
      Refers to the effective date of this Contract, which is the date that the
      Approval Authority approves this Contract and the Articles.

0.10  "Board"
      Refers to the Board of Directors of the Company.

0.11  "Executive Officers"
      Refers to General Manager, Vice General Manager and other officers
      appointed by the Board of Directors.

0.12  "One Party", "All Parties" or "Three Parties"
      One Party refers to one of Party A, Party B and Party C. All Parties or
      Three Parties refers to all parties, i.e. Party A, Party B and Party C.

0.13  the "Project"
      Refers to the development of a nationwide Internet access and service
      network.

0.14  "Renminbi" ("RMB")
      Refers to the official currency used in the PRC.

0.15  "Administration of Foreign Exchange"
      Refers to the PRC State Administration of Foreign Exchange and/or its
      local branch.
<PAGE>

0.16  "Administration of Industry and Commerce"
      Refers to the PRC State Administration of Industry and Commerce and/or its
      local branch.

0.17  "U.S. Dollar" (US$)
      Refers to the official currency used in the United States of America.

0.18  "Employees"
      Refers to the Company's employees besides Executive Officers.

                            JOINT VENTURE CONTRACT

In accordance with "The law of the People's Republic of China on Sino-Foreign
Joint Venture" and other related laws and regulations of the People's Republic
of China (the "PRC"), Beijing Sino-Tech Science and Technology Development
Center ("Party A"), China Education and Research Network Center or it wholly
owned subsidiary (CERNET) ("Party B"), and ASPAC Communications, Inc. ("Party
C") agreed to form a Sino-foreign Joint Venture ("SFCJV") company and enter into
the following Sino-foreign Joint Venture Contract ( the "Contract").

                            I.  CONTRACTING PARTIES

1.01  Parties
      --------

      A.  Party A: Beijing Sino-Tech Science & Technology Development Center
          Legal Representative: Xu, Yawen
          Title: General Manager
          Nationality:
          Chinese Fax Number: (8610) 62983428

      B.  Party B:  China Education and Research Network Center (CERNET) or its
          wholly owned subsidiary
          Legal Representative:  Wu, Jian Ping
          Title:  Director, and Director of The Specialist Committee
          Nationality:  Chinese
          Fax Number:  (8610) 62785933

      C.  Party C:  ASPAC Communications, Inc.
          Legal Representative:  Marc F. Mayeres
          Title:  President
          Nationality:  U.S. Citizen
          Fax Number:  (001-310) 712-3286

1.02  Representations and Warranties:
      -------------------------------
      Upon the Contract's signing date and Effective Date, Party A, Party B, and
      Party C respectively represent and warrant to each other that:

      (1)  the respective party is legally established in conformity with the
           registered country's laws and regulations and is in good standing.

      (2)  the respective party has full power, all necessary authorities and
           approvals, and is competent to execute this Contract and to perform
           its obligations hereunder and to consummate each responsibility
           contemplated hereby.
<PAGE>

      (3)  the respective party has taken all necessary actions to authorize the
           signing and execution of this Contract. The representative of the
           respective party that signs this Contract is fully authorized with
           letter of Authorization or other similar document, and has the power
           to sign for the party and to bind the party under this Contract.

      (4)  execution and performance of this contract does not and will not
           constitute a default under or a violation of the respective party's
           Articles, Business License, By- laws or any law, statute, regulation,
           authority or approval, or any other instrument to which the
           respective party or the other party may be bound subject under any
           contract or agreement.

      (5)  to the best knowledge of each respective party, there is no pending
           or actual law suit, arbitration, or legal, administrative, or other
           proceeding, or governmental investigation against or affecting the
           respective party or by any means affecting the respective party's
           ability to sign and execute this Contract hereby.

                       II.  ESTABLISHMENT OF SINO-FOREIGN
                             JOINT VENTURE COMPANY

2.01  Establishment of the Company
      ----------------------------
           The Three Parties agree to establish a Joint Venture company (the
      "Company") with limited liability in the PRC under The Law of People's
      Republic of China on Sino-Foreign Joint Venture Enterprises and other
      related regulations as well as stipulations in this Contract upon the
      Effective Date of this Contract.

2.02  The Company's name and Location
      -------------------------------
      (1) Name: The Company's name in Chinese is:
      [_][_][_][_][_][_][_][_][_][_][_][_](to be confirmed). The Company's name
      in English is: YeeYoo Network Technology Co., Ltd. (to be confirmed).
      (2) Address:  The Company's legal location is: Haidian District, Beijing,
      PRC.

2.03  Governing Laws and Regulations
      ------------------------------
      Activities of the Company shall be in accordance with all PRC laws,
      decrees and regulations.

2.04  Beginning of Operation
      ----------------------
      The Company is a limited liability company. All parties shall undertake
      the liability of the Company subject to their investment amount. All
      parties agree to share risks and rewards, profits and losses of the
      Company based on each party's share ownership ratio in the registered
      capital of the Company. The Company shall start operation upon issuance of
      its Business License.

                      III.  SCOPE AND SCALE OF OPERATION

3.01  Scope and Scale of the Company
      ------------------------------
      The Company is engaged in:
      (a)  The development of Wireless broadband high speed access equipment.
      (b)  Internet and networking products development and sales.
      (c)  Software development and sales.
      (d)  The investment and development of Internet network.
      (e)  The development of the Internet technology and its application
           services.

             IV.  TOTAL CAPITAL INVESTMENT AND REGISTERED CAPITAL

4.01  Total Capital Investment
      ------------------------
<PAGE>

      The total capital investment of the Company for this Project is initially
      expected to be Ten Million Dollars (US$ 10,000,000).

4.02  Total Registered Capital
      ------------------------
      The total registered capital of the Company is Five Million Dollars
      (US$5,000,000). In which: Party A shall contribute Five Hundred Thousand
      Dollars (USD$500,000), accounting for 10% of the registered capital; Party
      B shall contribute One Million Dollars (US$1,000,000), accounting for 20%
      of the registered capital; Party C shall contribute Three Million Five
      Hundred Thousand Dollars (US$3,500,000), accounting for 70% of the
      registered capital.

4.03  Contribution and Conditions for Co-operation
      --------------------------------------------
      (1)  Conditions for co-operation to be provided by Party A shall include:

           Party A shall contribute a sum of capital equivalent to Five Hundred
           Thousand Dollars (US$ 500,000) to the Company towards registered
           capital, accounting for 10% of the total registered capital. The
           contribution by Party A shall be in cash or tangible or intangible
           assets agreed by the Three Parties.

      (2)  Conditions concerning Party B's investment co-operation shall
           include:

           Party B shall contribute a sum of capital equivalent to One Million
           Dollars (US$ 1,000,000) to the Company towards registered capital,
           accounting for 2015% of the total registered capital. The
           contributions by Party B shall be cash or tangible or intangible
           assets agreed by the Three Parties.

      (3)  Conditions for co-operation to be provided by Party C shall include:

           Party C shall contribute a sum of capital equivalent to Three Million
           Five Hundred Fifty Thousand Dollars (US$ 3,500,000) to the Company
           towards registered capital, accounting for 705% of the total
           registered capital. The contributions by Party C shall be in US
           Dollars.

4.04  Certificate of Investment
      -------------------------
      The investment payments toward the registered capital from the Three
      Parties shall be certified by a certified public accountant agreed by the
      Three Parties. After receiving a satisfactory certificate recording such
      investment, the Company shall issue a Certificate of Investment, including
      the amount and share ownership of the registered capital, signed by the
      Chairman of the Company to the Three Parties within thirty (30) days. A
      copy of the Certificate of Investment shall be submitted to and filed with
      the Approval Authority.

4.05  Equity Sharing
      --------------
      Equities of the Company shall be distributed in percentage as follows:
               Party A: 10%      Party B: 20%     Party C: 70%

4.06  Transfer of Rights and Equities
      -------------------------------
      Before One Party (the "Transferor) wishes to transfer, in whole or part,
      its shares in the Company to a third party, the Transferor must obtain
      written consent from the other Two Parties and the approval from the Board
      of Directors and the Approval Authority. The other Two Parties have the
      right of first refusal to purchase the shares that the Transferor wishes
      to transfer. After receiving approval from the Approval Authority and when
      transferring shares according to stipulations stated above, the Company
      shall proceed with Change of Registration with the Administration of
      Industry and Commerce.

4.07  Addition to Registered Capital
      ------------------------------
      The registered capital may be increased from time to time, within the
      duration of the co-operation, subject to the approval of the Board of
      Directors (the "Board") and the Approval Authority. The contribution from
      All Parties to increase the registered capital pursuant to the funding
      plan shall be
<PAGE>

      pro rata in accordance with the share ratio of each party at the time of
      such capital increase. If One Party declines to increase the registered
      capital, the other parties then have the first right of refusal to
      increase the whole or a portion of the amount of the increase in
      registered capital which is rejected by the other party. The rights and
      obligations of each party shall also be adjusted pursuant to the new share
      ownership ratio. Upon receiving approval from the Approval Authority, the
      Company shall proceed the registration process with the Administration of
      Industry and Commerce. Party A and Party B have the right to invest their
      portion of the addition to the registered capital with tangible or
      intangible assets that are agreed by the Three Parties.

                     V.   RESPONSIBILITIES OF THE PARTIES

5.01  Responsibilities of Party A
      ---------------------------
      In addition to other obligations stipulated under this Contract, Party A
      shall be responsible for the following matters:

      (1)  Being in charge of applying from the competent authorities of the
           PRC, for the approval of the establishment and registration of the
           Company, and business license, etc. Assisting the Company in applying
           for and obtaining Preferential Taxation, Tariff Reduction and
           Exemption, and other preferential investment treatments that are
           obtainable under PRC laws.

      (2)  Assisting the Company in obtaining equipment, materials, as well as
           office equipment and materials within the PRC.

      (3)  Assisting the Company in recruiting qualified Executive Officers and
           Employees in China. Arranging transportation for imported equipment.

      (4)  Assisting the Company in applying for import licenses for necessary
           machinery equipment, goods and materials.

      (5)  Assisting the foreign employees of the Company in obtaining all
           necessary entry visas and work permits. Arranging meals,
           accommodations, office spaces, local transportation, and emergency
           medical treatments for expatriate personnel of the Company. All out
           of pocket costs for the above mentioned matters shall be the
           responsibility of the Company

      (6)  Assisting the Company and its foreign employees in opening bank
           accounts denominated in both RMB and convertible currencies.

      (7)  Assisting Chinese employees of the Company in obtaining necessary
           exit and entry permits and Visas for their overseas trips required by
           the Company's activities and operations.

      (8)  Assisting and cooperating with the Company to carry out the Company's
           products and services on CERNET's and other networks' infrastructure.

      (9)  Handling all other matters appointed by the Company.

5.02  Responsibilities of Party B
      ---------------------------
      In addition to other obligations stipulated under this Contract, Party B
      shall still be responsible for the following matters:

      (1)  Providing technical support for the on-going operations of the
           Company;

      (2)  Providing the network platform for the Company;

      (3)  Assisting and cooperating with the Company to carry out the Company's
           services on CERNET's and other network's infrastructure;
<PAGE>

      (4)  Assisting the Company in obtaining related information resources;

      (5)  Assisting the Company in operation and maintenance of the Internet
           network;

      (6)  Providing the technical training programs for the Company;.

      (7)  Handling other matters appointed by the Company.

5.03  Responsibilities of Party C
      ---------------------------
      In addition to other obligations stipulated under this Contract, Party C
      shall still be responsible for the following matters:

      (1)  Assisting and introducing to the Company opportunities in obtaining
           modern management techniques.

      (2)  Assisting the Company, along with Party A, in obtaining necessary
           foreign entry visa and working permits required by the Company's
           activities and operation.

      (3)  Assisting the Company in recruiting qualified foreign employees and
           consultants when necessary.

      (4)  Assisting the Company in the management of its operations and
           introducing to the Company advanced and efficient management
           techniques.

      (5)  Assisting the Company raise necessary funds for its business
           development.

                           VI.    BOARD OF DIRECTORS

6.01  Composition of Board of Directors
      ---------------------------------

      (1)  The date that the Company obtains its Business License shall be
           considered as date that the Board is established.

      (2)  The Board of Directors (the "Board") shall consist initially of five
           Directors. One Director shall be appointed by Party A, one Director
           shall be appointed by Party B and three Directors shall be appointed
           by Party C. Each of the Three Parties shall notify the other parties
           of the names of its appointed Directors.

      (3)  Each Director's term of office is three years, renewable with
           consecutive appointment from the original appointing party. Vacancies
           in the Board resulting from a Director's retirement, resignation,
           illness, incapacity, death or the original appointing party's removal
           of the Director shall be replaced by appointment from the original
           appointing party. The replacement Director shall serve out the term
           of his predecessor. All Parties have the right to replace their
           appointed Directors.

      (4)  Chairman of the Board (the "Chairman") shall be jointly appointed by
           Party C and Vice Chairman of the Board (the "Vice Chairman") shall be
           appointed by Party B. Chairman is the legal representative of the
           Company.

6.02  Board of Directors Meeting and Authorities
      ------------------------------------------

      (1)  The Board represents the highest authority in the Company.
<PAGE>

      (2)  The Board may hold its meetings in locations as the Three Parties
           from time to time may determine. All Directors shall be given written
           notices for the Board meeting (all Directors must receive such
           notices no less than 15 days before the meeting). Notice of Board
           meeting shall state agenda of the meeting, all related information
           and documents, and time and place of the meeting.

      (3)  The Board meeting shall be held at least once a year and shall be
           hosted by the Chairman. If more than 1/3 of the Directors submit
           written request of a Board meeting to the Chairman, the Chairman may
           call for a temporary Board meeting. Minutes of the Board meetings
           shall be recorded and kept in the Company file.

      (4)  If Director(s) cannot be present in person to attend the Board
           meeting, he/she (they) can delegate representative(s) to participate
           with written consent(s). Such representative(s) shall be provided
           with the same rights as Director(s). Absence or delegation of
           Director(s) shall be considered as waiver of such rights.

      (5)  Participation of 2/3 of Directors then in office either by presence
           in person or delegation shall constitute a quorum for all purposes in
           any Board meeting. Each participating Director (including Chairman
           and Vice-Chairman), either in person or by delegation, shall have one
           voting right.

      (6)  The following matters must be unanimously approved by all Directors
           prior to adoption of resolution:

           (i)   Amendment of By-Laws;
           (ii)  Mergers, separations, and changes in the form of organization;
           (iii) Dissolution of the Company;
           (iv)  Mortgage of the Company's assets;
           (v)   Other matters agreed by Three Parties that must be unanimously
                 approved by all Directors in a Board meeting prior to adoption
                 of resolution.

      (7)  The following matters must be approved by majority of Directors prior
           to adoption of resolution:

           (i)   Approval of the Company's business plan, budget and final
                 accounting;
           (ii)  Acquisition, significant expansion, discontinuation or
                 dissolution of any business;
           (iii) Increase or decrease of the Company's registered capital;
           (iv)  Decisions regarding the Company's sinking fund, business
                 development fund, employee fringe benefits and rewards fund,
                 and any other Company funds' fiscal distribution.
           (v)   Employment terms and conditions for Executive Officers and
                 Employees.

      (8)  All other matters that need Board meeting's resolution could be
           proposed in an appropriate Board meeting and could be approved by
           simple majority's affirmative votes by Directors in presence or in
           delegation.

      (9)  All actions to be taken by the Board may be taken without a meeting
           if majority of the Board members consent thereto in writing, and the
           writing or writings shall be filed with the minutes of the
           proceedings of the Board. Such action shall hold the same authority
           as if it was unanimously approved by all members in a Board meeting.

      (10) The Board will provide complete and accurate minutes for all Board
           meetings (including copy of the notices of Board meetings) and all
           businesses transacted during Board meetings in both Chinese and
           English. Minutes of Board meeting shall be distributed to all members
           of the Board as quickly as possible as permitted by practicable
           situations (but no later than 21 days after the meeting). A Director
           who proposes any change or addition to the Minutes shall
<PAGE>

           present to the Chairman or the Vice-Chairman in writing for such
           change and addition within two (2) weeks of receipt of the Minutes.
           Minutes of Board meeting shall be finalized by Chairman and Vice-
           Chairman within forty five (45) days after such meeting, and shall be
           signed by all Directors within two (2) weeks after receipt of the
           finalized Minutes.

      (11) Members of the Board are not compensated for serving as Directors.
           However, the Company shall be responsible and shall reimburse
           Directors for all reasonable expenses occurred when performing their
           Director duties.

                           VII. OPERATION MANAGEMENT

7.01  Organizations of Management
      ----------------------------
      The Company adopted a management system that under the supervision of the
      Board, all Executive Officers are responsible to the Board. The Company
      assigns one General Manager, several Vice General Managers and other
      Executive Officers determined by the Board. General Manager shall be
      nominated by Party C and approved by Board of Directors while the Vice
      General Manager shall be nominated by the General Manager and approved by
      the Board of Directors. Other appointment and removal of Executive
      Officers shall be determined by the General Manager and reported to
      majority votes of the Board. General Manager and Vice General Managers can
      only be removed from duty by Board Resolutions.

7.02  Duties and Authorities of General Manager and Vice General Manager
      ------------------------------------------------------------------
      The Company assigns a General Manager who will be in charge of the
      management of the daily operation of the Company. The General Manager is
      responsible to the Board and performs all businesses and duties directed
      by the Board. A Vice General Managers shall operate in coordination with
      the General Manager, and shall report and be responsible to the General
      Manager. The General Manager and the Vice General Managers shall consult
      and discuss with each other and consolidate opinions when executing the
      operating policies, operating programs, and implementing plans of the
      Company. The General Manager and the Vice General Managers shall devote
      their full attentions to perform their duties, and all other duties listed
      under the Company's By-Laws. The General Manager and the Vice General
      Manager shall neither engage in or carry on as other business entity's
      employee, nor participate in any business entity that is in competition
      with any business carried on from the Company.

7.03  Engagement of General Manager and Vice General Manager
      ------------------------------------------------------
      The General Manager and the Vice General Managers shall be engaged by the
      Board. The Board reserves the right to terminate employment by Board
      Resolution if the General Manager or the Vice General Managers are found
      not qualified for the job duties or committed an act of fraud or gross
      negligence. Any damages occurred to the Company's business or goodwill
      shall be the responsibility of the General Manager or the Vice General
      Managers as permitted by the governing laws.

                            VIII.  LABOR MANAGEMENT

8.01  Guidance and Principles
      -----------------------
      The Board shall prepare employment plans, in accordance with "Regulations
      Regarding Labor Management of Sino-Foreign Joint Ventures in the People's
      Republic of China", regarding the recruiting, engaging, firing, salary,
      insurance, welfare, and other benefit of the Company's officers and
      employees, with the final terms to be specified in the labor contract
      between the Company and the Company's labor union or each individual. Such
      labor contracts shall be filed with local labor management department

8.02  Employees
      ---------
      After the establishment of the Company, employees shall be hired by the
      Company according to executed employment agreements. Such employment
      agreements shall specify the employment,
<PAGE>

      duties and benefits (including confidentiality and non-compete
      obligations). The Board shall approve common structures, clauses, and
      terms defined in the employment agreement.

8.03  Executive Officers
      ------------------
      (1)  Executive Officers shall be employed by the Company based on
           individual employment agreements.

      (2)  The employment, compensations, insurance, and benefits, and travel
           accommodation standards of Executive Officers shall be determined by
           the Board.

8.04  Compliance with Regulations of Labor Protection
      -----------------------------------------------
      The Company shall comply with the PRC government's rules and regulations
      regarding labor protection, and shall ensure safety and civilized
      operations. The workers' compensation insurance of the Company's employees
      shall comply with related governing PRC regulations.

                      IX.  TAX, FINANCE AND AUDICCOUNTING

9.01  Tax
      ---
      The Company shall pay taxes pursuant to the relevant PRC laws and
      regulations. The Company shall use its best efforts to apply for and to
      obtain local and national Preferential Taxation and Reduced Taxation
      Benefits available for foreign invested enterprise. The Company's
      employees, either domestic or expatriate, shall pay income tax to the
      State in accordance to the "Individual Income Tax Law of the PRC".

9.021 Accounting System
      -----------------
      The fiscal year of the Company shall be based on a calendar year system.
      Each fiscal year shall begin on the first day of January and end on the
      last day of December in that year. The Company shall record its accounting
      records in Chinese the PRC and one foreign language agreed by the Three
      Parties.

9.03  Audit
      -----
      The Company shall engage an independent PRC certified public accountant(s)
      agreed by the Three Parties to audit the Company's financial statements in
      accordance with related rules and regulations. The audit report shall be
      submitted to the Board and the General Manager. Each of the Three Parties,
      separate or together, may invite an accountant or an accounting firm to
      check the Company's accounting and financial records at any time at its
      own expenses. The Company and its employees shall provide the necessary
      assistance and convenience for that accountant.

9.04  Financial Statements
      --------------------
      During the first quarter of each fiscal year, the General Manager shall
      supervise the preparation of the previous year's balance sheet, income
      statement, plan for profit distribution and other financial statements and
      shall submit such statements to the Board for examination.

9.05  Bank Accounts and Management of Foreign Exchange
      ------------------------------------------------
      The Company shall separately establish bank accounts denominated in RMB
      and foreign currency in the Bank of China or other bank(s) appointed by
      the Administration of Foreign Exchange or the Board. The Company shall
      handle matters relating to foreign currency exchange in accordance with
      PRC regulations of foreign exchange management.

                                X.   INSURANCE

10.01 Insurance
      ---------
      The Company shall obtain its property insurance, transportation insurance
      and other types of insurance from a PRC or an international insurance
      company. Such insurance shall be quoted in
<PAGE>

      RMB and/or foreign currencies based on specific situations. The type of
      insurance and insured amount shall be decided by the Board in accordance
      with applicable PRC laws and regulations.

                             XI.  CONFIDENTIALITY

11.01 Confidentiality
      ---------------
      (1)  Within the duration of the Contract, One Party can disclose
           confidential and special information to the other Two Parties of the
           Contract. In addition, the Three Parties can from time to time, when
           appropriate, obtain confidential and special information regarding
           the Company's operation throughout the co-operation duration.
           Similarly, the Company can from time to time, when appropriate,
           obtain confidential and special information of the Three Parties.
           Within the duration of the Contract and five (5) years after its
           termination, each party that is in receipt of information mentioned
           above shall:

           (i)   keep confidentiality of such information;
           (ii)  not disclose such information to anyone or any entity, except
                 to Directors, senior officers or other employees who shall know
                 such information in order to carry out the contract functions;
           (iii) not use such information for any other purposes except for
                 business matters specified in this Contract.

      (2)  The obligation concerning confidentiality mentioned above does not
           apply to any part of the information specified below:

           (i)   information with written records that already known by the
                 receiving party before receiving the confidential information;
           (ii)  confidential information has already been known (or become
                 known) to the public, and this situation is not a result of the
                 negligence or breach of contract of the receiving party;
           (iii) confidential information obtained by receiving party from a
                 third party that does not have the obligation to keep this
                 information in confidence;
           (iv)  confidential information the receiving party develops by itself
                 under conditions not violating this Contract;
           (v)   information that receiving party is obligated to disclose under
                 law or valid orders issued by any government department; and
           (vi)  Information that One Party is obligated to provide to
                 prospective investors or cooperating partners in order to seek
                 investors or carry out businesses for the Company.

      (3)  The confidentiality clause and rights and obligations thereunder
           shall remain valid within five (5) years after termination of this
           Contract, even if the Company is terminated, dissolved, or closed
           accounts.

                        XII.  DURATION OF CO-OPERATION

12.01  Duration of Co-operation
       ------------------------
       The Company's duration of co-operation is 30 years from the date the
       Company obtains its business license.

12.02  Extension of Duration of Co-operation
       -------------------------------------
       The Board shall decide on the extension of the co-operation duration one
       year before the termination of the Contract. If extension is elected by
       the Board, Application for Extension shall be presented to the Ministry
       of Foreign Trade and Economy or its authorized approval authority at
       least 6 months before termination of the Contract.

                    XIII.  TERMINATION AND CLOSE OF ACCOUNT
<PAGE>

13.01  Reasons for Termination
       -----------------------
       (1)  expiration of co-operation duration;
       (2)  the Company is unable to continue operation due to serious loss from
            operation;
       (3)  the Company is unable to continue operation due to One Party's
            default of the Contract or Articles;
       (4)  the Company is unable to continue operation due to serious loss from
            natural disaster, war or other events of Force Majeure;
       (5)  the Company does not achieve its operating goal, and has no future
            prospects;
       (6)  the Company's bankruptcy;
       (7)  the Company receives Order to Dissolve issued by Court or authority
            in charge.

13.02  Notice Procedures
       -----------------
       If One Party issues notice of termination based on conditions specified
       in 14.01 (1) or (3), the Three Parties shall negotiate and use best
       efforts to eliminate the reason for termination stated in the notice
       within one month after the notice's issuance. If the matter cannot be
       resolved in satisfaction by the Three Parties within one month after the
       negotiation started, or the receiving Two Parties of the notice refuses
       to negotiate within period specified above, then the issuing party of the
       notice may give a written termination notice to the other party to
       terminate this Contract, and such termination notice shall become
       effective with Approval Authority's approval. If other conditions
       specified in 13.01 occur, the Board may present Application to Dissolve
       to Approval Authority to terminate the Contract.

13.03  Close of Accounts or Bankruptcy Close of Accounts
       -------------------------------------------------
       (1)  If the Contract is terminated due to conditions specified in [13.01
            (1) through (5)], the Company's tangible assets shall be estimated
            by and accounted under the supervision of the Accounts Closing
            Committee formed under PRC law. Any remaining assets after the
            Company's payment off all debts shall be distributed to all co-
            operating parties according to each party's investing proportion.

       (2)  If the Company is closing of accounts due to bankruptcy, the
            Company's assets shall be used with priority to pay off expenses in
            the following order:

            (i)   necessary expenses associated with bankrupt assets'
                  management, liquidations and distributions;
            (ii)  legal expenses associated with the bankruptcy law suit;
            (iii) other expenses.

                  After all expenses associated with bankruptcy are paid off,
                  the Company shall use the remaining assets to pay off other
                  liabilities in the following order

                  (i)   any accrued but unpaid employees' wages, salaries, and
                        workers' compensation insurance;
                  (ii)  any tax liabilities;
                  (iii) any other creditors.

       If the bankrupt assets are insufficient to satisfy expenses or
       liabilities under the same class, the assets shall be distributed
       proportionally.

                           XIV.  BREACH OF CONTRACT

14.01  Penalties for Breach of Contract
       --------------------------------
       (1)  If a party violated this Contract, and as a result, this Contract
            cannot be performed or fully performed, the party in default shall
            bear the penalties for breach, and if the party in default cannot
            correct its non-compliance within thirty (30) days after the its
            receipt of notice from the other party requesting its correction of
            defaulting actions, then the observant party has the right to issue
            written Breach of Contract Notice to the party in default to
            terminate the entire or partial Contract. All damages resulting from
            such action shall be the responsibility of party in default.
<PAGE>

       (2)  If One Party violates its obligation in providing funds in term of
            time and amount as agreed by the Three Parties and specified in
            other legal documents related to the Project, and does not correct
            its non-compliance within 30 days from the occurrence of such non-
            compliance, then the other Two Parties, while ensuring its right to
            adopt other remedial measures for the non-compliance of party in
            default shall not be eroded, has the right to issue written Breach
            of Contract Notice to the party in default to terminate the entire
            or partial Contract. All direct economic damages resulting from such
            action shall be the responsibility of the party in default.

                              XV.  FORCE MAJEURE

15.01  Force Majeure
       -------------
       (1)  "Force Majeure" refers to events that are unforeseeable,
            uncontrollable and unavoidable to the Three Parties. Such events
            shall include but not be limited to earthquakes, typhoons, floods,
            fires, strikes, and government injunctions;

       (2)  When the obligations of a party under this Contract cannot be
            performed or extended to perform in full or in part as a result of
            an event of Force Majeure, that party should be exempted from
            liability. The injured party should timely inform the other Two
            Parties and provide written information on such event in detail
            within 15 days of its occurrence, and valid documents of the reasons
            for the delay in implementing or for being unable to implement the
            Contract. These documents should be produced by the government
            authorities in charge of the area of the event.

       (3)  At the time of the occurrence of the event of Force Majeure, the
            Three Parties should immediately enter into consultations to seek a
            rational way, and try their best efforts to reduce the effects
            arising from the event of Force Majeure.

                         XVI.  RESOLUTION OF DISPUTES

16.01  The Three Parties agree that they will try their best efforts, through
       consultation, to solve all disputes between them occurring because of the
       Contract or in relationship with the Contract. Such consultation shall
       proceed following the Three Parties' true intentions when they execute
       this Contract.

16.02  The Three Parties agree that if they cannot solve the above mentioned
       disputes through consultations within 30 days from the occurrence, then
       they should submit such disputes to China International Economic and
       Trade Arbitration Committee or other international arbitration committee
       agreed by the Three Parties to be arbitrated in accordance with the
       arbitration rules of the committee. The arbitral decisions are final and
       have the restraint power to both of the Three Parties.

16.03  During the process of arbitration, the Contract and the operation under
       the Contract shall be performed continuously, except for the dispute part
       currently under arbitration.

                             XVII.  GOVERNING LAW

17.01  The formation, interpretation, and execution under this Contract shall be
       governed by the laws of China.

17.02  If, after this Contract becomes effective, there are changes in PRC laws,
       rules or regulations, and if such changes bring negative and substantial
       effects to One Party's economic benefits, then the Three Parties should
       immediately consult and try their best efforts to make necessary
       adjustments to ensure each party's economic benefits obtained from this
       Contract after the changes to be no less than what it could obtain before
       the occurrence of changes in laws, rules or regulations or amendment or
       interpretation.
<PAGE>

            XVIII.  EFFECTIVENESS AND OTHERSMISCELLANEOUS REGULATIONS

18.01  Any amendments or modifications of this Contract shall become valid only
       after the Three Parties sign a written amendment agreement and such
       agreement gets approved by Approval Authorities. Within the framework of
       this Contract, the Three Parties agree to sign supplement agreements,
       including Network Cooperating Agreement, Network Operating Agreement,
       etc. as the addendum of this Contract, which shall be equally authentic
       as this Contract.

18.02  This Contract and its addendum shall be effective upon signature of all
       signing parties.

18.03  Any notice or written communication from One Party to the other Two
       parties, include but not limited to any letter or notice sent in
       accordance with this Contract's stipulations, shall be sent by air
       certified mail or facsimile (and confirmed by fax journal report) to the
       address or fax number specified in 2.01. Any notice or communication sent
       in accordance with this Contract's stipulation, if by air mail, then
       twelve (12) date after the envelope's stamp date shall be deemed to be
       the receiving date; if by facsimile, then two (2) business days after the
       sending date shall be deemed to be the receiving date. All notices and
       communications shall be sent to the address or fax number listed in 2.01
       until the party concerned sends written change of address notification to
       the other party.

                                IXX.  LANGUAGE

 19.01 This Contract is written in both Chinese and English, which are equally
       authentic. If there is any difference between the two versions, the
       Chinese version shall be taken as the ruling version.

Party A:                                            Party B:
Beijing Sino-Tech Science & Technology    China Education and Research
Development Center                        Network Center

Signature: /s/ Yawen Xu                   Signature: /s/ Jianping Wu
           -------------                             ----------------
           Yawen Xu                                  Jianping Wu

  Date: December 31, 1999                 Date: December 31, 1999

  Party C:
  ASPAC Communications, Inc.

  Signature: /s/ Marc F. Mayeres
             --------------------
             Marc F. Mayeres

  Date: December 31, 1999<PAGE>
                          FIRST WHOLE ACCOUNT AGGREGATE
                   EXCESS OF LOSS RETROCESSION AGREEMENT (E1)
                                       for
                        EMPLOYERS REINSURANCE CORPORATION

                            Effective January 1, 1999

<PAGE>
                                    CONTENTS
                                    --------

                        EMPLOYERS REINSURANCE CORPORATION
                  FIRST WHOLE ACCOUNT AGGREGATE EXCESS OF LOSS
                           RETROCESSION AGREEMENT (E1)

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

  ARTICLE                                                                  PAGE
  -------                                                                  ----

      I     APPLICATION OF AGREEMENT...........................................1
     II     BUSINESS RETROCEDED................................................1
    III     RETENTION AND RETROCESSION.........................................2
     IV     EXTENDED REPORTING DATE OPTION.....................................2
      V     RETROCESSIONAIRE RESERVE DETERMINATION.............................3
     VI     DEFINITIONS......................................................3-5
    VII     RETROCESSION PREMIUM AND ADJUSTMENT................................6
   VIII     EXPERIENCE ACCOUNT BALANCE.........................................6
     IX     LOSS SETTLEMENTS...................................................7
      X     COMMUTATION AND EXPERIENCE REFUND..................................7
     XI     COMMUTATION APPROVAL ON CORPORATION'S POLICIES.....................8
    XII     EXPIRATION DURING LOSS.............................................8
   XIII     STOP LOSS (AGGREGATE) INCLUSION....................................8
    XIV     WARRANTY...........................................................9
     XV     CURRENCY...........................................................9
    XVI     ACCESS TO RECORDS..................................................9
   XVII     ERRORS AND OMISSIONS...............................................9
  XVIII     TAXES.............................................................10
    XIX     OFFSET............................................................10
     XX     INSOLVENCY.....................................................10-11
    XXI     ARBITRATION....................................................11-12
   XXII     NONWAIVER.........................................................12
  XXIII     INTERMEDIARY......................................................12

<PAGE>
                  FIRST WHOLE ACCOUNT AGGREGATE EXCESS OF LOSS
                           RETROCESSION AGREEMENT (E1)
                           entered into by and between
                        EMPLOYERS REINSURANCE CORPORATION
                              Overland Park, Kansas
                     (hereinafter called the "Corporation")
                                       and
                           NATIONAL INDEMNITY COMPANY
                                 Omaha, Nebraska
                   (hereinafter called the "Retrocessionaire")

                            Effective January 1, 1999

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

WITNESSETH
----------

In  consideration  of the mutual  covenants  hereinafter  contained and upon the
terms and conditions hereinafter set forth, the parties hereto agree as follows:

                                    ARTICLE I
                                    ---------

APPLICATION OF AGREEMENT
------------------------

This  Agreement  applies  to  all  in  force,  new  and  renewal  insurance  and
reinsurance  written by the Corporation,  as respects  occurrences  taking place
anywhere in the world at or after January 1, 1999, 12:01 a.m.,  Central Standard
Time, and prior to January 1, 2000, 12:01 a.m., Central Standard Time.

                                   ARTICLE II
                                   ----------

BUSINESS RETROCEDED
-------------------

This Agreement applies to all insurance and reinsurance  business written by the
Corporation  covering in respect of exposures worldwide,  including  reinsurance
assumed from subsidiary and/or affiliate  companies and reinsurance assumed from
the Corporation's  membership in any underwriting  associations,  excluding life
business  written as such,  but not excluding  death  benefits under accident or
health Policies or workers' compensation Policies.

<PAGE>
                                                                          Page 2

                                   ARTICLE III
                                   -----------

RETENTION AND RETROCESSION
--------------------------

The  Corporation  shall retain for its own account as its own net  retention all
Ultimate Net Loss in the aggregate incurred during the term of this Agreement in
respect of its Net Retained Liability up to and including the higher of either:

A)       an amount  equal to XX% of  Subject  Gross Net  Earned  Premium  Income
         (hereinafter "SGNEPI"), or

B)       the total  Ultimate Net Loss in the  aggregate  not exceeding an amount
         equal to XXX.X% of SGNEPI minus the limit ceded hereunder.

The  Retrocessionaire  shall  indemnify  the  Corporation  in respect of its Net
Retained  Liability for all Ultimate Net Loss in the aggregate  incurred  during
the term of this Agreement in excess of the Corporation's own net retention.

The Retrocessionaire's  annual limit of liability shall not exceed the lesser of
an amount equal to XX.XX% of SGNEPI, or $XXX,XXX,XXX.

Notwithstanding  the above,  the  liability  of the  Retrocessionaire  shall not
exceed the aggregate  amount of ceded Ultimate Net Loss incurred and reported by
the  Corporation  to the  Retrocessionaire  as of  February  1,  2000,  or  such
alternate date as established by the  Corporation  under the Extended  Reporting
Date Option.

                                   ARTICLE IV
                                   ----------

EXTENDED REPORTING DATE OPTION AND ADDITIONAL PREMIUM
-----------------------------------------------------

At the sole  option  of the  Corporation,  on or before  February  1,  2000,  by
providing written notice to the  Retrocessionaire,  the Corporation may elect to
establish an alternate  date of not later than  February 1, 2001,  for reporting
the  aggregate  amount  of ceded  Ultimate  Net Loss  incurred  for  which  the
Retrocessionaire   shall  be  liable  (hereinafter  the  "Alternate  Date").  In
consideration for this Extended  Reporting Date Option, an additional premium of
$XXX,XXX is due and payable at January 1, 1999.  Such  additional  premium shall
not affect the Experience Account Balance.

<PAGE>
                                                                          Page 3

                                    ARTICLE V
                                    ---------

RETROCESSIONAIRE RESERVE DETERMINATION
--------------------------------------

A)       The  Corporation  shall  determine  the  level  of total  reserves  for
         Ultimate Net Loss for the term of this Agreement and shall revise those
         reserves from time to time as  subsequent  events  require.  Should the
         Retrocessionaire  disagree with the reserves  posted by the Corporation
         for the term of this  Agreement,  the  Retrocessionaire  shall select a
         firm, acceptable to the Corporation,  to perform an independent reserve
         analysis.  In  the  event  the  Retrocessionaire   elects  to  have  an
         independent  reserve  analysis  conducted,  the loss settlement date on
         which the Corporation  seeks payment shall be delayed until  completion
         of the analysis, or six months past the loss settlement date, whichever
         first occurs. The results of the independent  reserve analysis shall be
         binding in establishing  the retention amount for this cover until such
         time as a subsequent study is conducted or the Retrocessionaire and the
         Corporation  mutually  agree to changes in the  retention.  The cost of
         such study  shall be borne by the  Retrocessionaire.  In no event shall
         the  retention  be  less  than  provided  under  Article  III  of  this
         Agreement.

B)       If, subsequent to the  Retrocessionaire  making any payments under this
         Agreement,  the reserves for the term of this  Agreement are increased,
         either by action of the  Corporation or in accordance  with paragraph A
         of  this   Article,   then  the   Corporation   shall   refund  to  the
         Retrocessionaire  the excess  amount  paid by the  Retrocessionaire  as
         determined  using the  revised  retention,  if any,  plus the  Interest
         Credit calculated in accordance with this Article.  The Interest Credit
         is  payable  immediately  for the  number  of days  beginning  with the
         date(s) of premature  payment(s) by the  Retrocessionaire and ending at
         the  date  the   Retrocessionaire  is  reimbursed  for  such  premature
         payment(s) and/or paid the Interest Credit due.

C)       The  Interest  Credit  shall be the  average  of the three  month  U.S.
         Treasury Bill rate plus XXX basis points applied against the refund due
         to the Retrocessionaire.

                                   ARTICLE VI
                                   ----------

DEFINITIONS
-----------

As used in this Agreement:

A)       The term  "Ultimate Net Loss" shall mean the actual loss or losses paid
         or  payable  by  the   Corporation   in  settlement  of  claims  or  in
         satisfaction of awards or judgments (including prejudgment interest and
         plaintiff's  costs included in the judgment)  plus losses  Incurred But
         Not  Reported  (hereinafter  "IBNR") for all lines of business  covered
         under  this  Agreement,  subject  however  to an  aggregate  limit  for
         Catastrophe Losses (including  Catastrophe Losses from parental covers)
         of $XXX,XXX,XXX within such Ultimate Net Loss.

<PAGE>
                                                                          Page 4

DEFINITIONS (continued)
-----------------------

         Subject  to the  limits of this  Agreement,  "Ultimate  Net Loss"  also
         includes  Loss  In  Excess  Of  Policy  Limits  and  Extra  Contractual
         Obligations  losses which are incurred as a result of the Corporation's
         participation  in any Original Policy which provides  coverage for such
         losses,  on the condition that the  Corporation  has, in advance of any
         conduct by the Original  Insured in connection with the  investigation,
         trial or  settlement of any claim or failure to pay or delay in payment
         of any benefits under any Original Policy,  counseled with the Original
         Insured and concurred in the Original Insured's course of conduct.

         The amount of loss paid or payable by the Corporation shall include all
         claim expenses covered under the Original Policy, but shall not include
         the  Corporation's   own  claim  expenses.   Salvages  and  recoveries,
         including recoveries under all other reinsurances, whether collected or
         not,  are to be first  deducted  from the  amount  of the loss  paid or
         payable  to  arrive  at the  amount  of  liability,  if any,  attaching
         hereunder.

B) The term "Extra Contractual Obligations" shall mean:

         1)       Eighty   percent  of  any  amount   paid  or  payable  by  the
                  Corporation in excess of its Policy limits  (limited to within
                  the limit of this Agreement however), but otherwise within the
                  terms of its  Policy  (hereinafter  called  "Loss In Excess Of
                  Policy  Limits"),  as a result of an action  against it by its
                  Insured,  or its Insured's  assignee,  to recover  damages the
                  Corporation  is  legally  obligated  to  pay  because  of  the
                  Corporation's  alleged  or actual  negligence  or bad faith in
                  rejecting  a  settlement  within  its  Policy  limits,  or  in
                  discharging  its duty to defend or prepare  the defense in the
                  trial of any action against its Insured, or in discharging its
                  duty to prepare or prosecute an appeal consequent upon such an
                  action.

         2)       Eighty  percent of any punitive,  exemplary,  compensatory  or
                  consequential  damages  (limited  to within  the limit of this
                  Agreement  however),  other  than  Loss In  Excess  Of  Policy
                  Limits,  paid or payable by the  Corporation as a result of an
                  action against it by its Insured, its Insured's assignee, or a
                  third party claimant,  which action alleges  negligence or bad
                  faith on the part of the Corporation in handling a claim under
                  a Policy subject to this Agreement.

         The term "Extra  Contractual  Obligations" shall not include any amount
         paid or payable by the Corporation  where such amount has been incurred
         by the  Corporation  due to the  fraud  of a  member  of the  board  of
         directors, a corporate officer of the Corporation or any other employee
         with claims settlement  authority,  acting individually or collectively
         or in  collusion  with  any  individual  or  corporation  or any  other
         organization  or  party  involved  in  the  presentation,   defense  or
         settlement of any claim covered hereunder.

<PAGE>
                                                                          Page 5

DEFINITIONS (continued)
-----------------------

C)       The term "Net Retained Liability" shall mean that portion of any Policy
         which  the  Corporation  retains  net  for  its  own  account,  and  in
         calculating  the amount of Ultimate  Net Loss  hereunder,  only loss in
         respect of that portion of any Policy which the Corporation retains net
         for its own account shall be included.

         The amount of the  Retrocessionaire's  liability  under this  Agreement
         shall not be increased by reason of the inability of the Corporation to
         collect  from  any  other  Retrocessionaire(s),   whether  specific  or
         general,   any   amounts   which   may  have   become   due  from  such
         Retrocessionaire(s),  whether such inability arises from the insolvency
         of such other Retrocessionaire(s) or otherwise.

D)       The term "Subject  Gross Net Earned  Premium  Income" or "SGNEPI" shall
         mean the  Corporation's  subject  gross  premium  income  written  less
         premiums paid for  cancellations  and reductions of rates and for other
         reinsurance carried by the Corporation, recoveries under which inure to
         the  benefit of this  Agreement,  plus the subject  gross net  unearned
         premium  at the  beginning  of the  term,  less the  subject  gross net
         unearned  premium at the end of the term,  said unearned  premium being
         calculated on a monthly pro rata basis.

E)       The term  "Catastrophe  Losses" shall mean property  losses recorded by
         the Corporation  which involve two or more Policies and total more than
         $X,XXX,XXX of incurred loss net of inuring protection(s).

F)       The  unqualified  term  "Policy"  shall  mean  all  binders,  policies,
         certificates,  agreements,  treaties,  bonds or contracts of insurance,
         reinsurance or retrocession  accepted or held covered  provisionally or
         otherwise underwritten by the Corporation.

G)       The term  "Original  Policy"  shall mean the  initial  binder,  policy,
         certificate,   agreement,   bond  or  contract  of  insurance  that  is
         subsequently reinsured.

H)       The  unqualified  term  "Insured"  when used as a noun  shall  mean the
         person who obtained or is otherwise  covered by insurance issued by the
         Corporation,  or  the  reinsured  who  obtained  reinsurance  from  the
         Corporation,  or the  retrocedent  who obtained  retrocession  from the
         Corporation, as the context so requires.

I)       The term  "Original  Insured"  shall mean the entity who obtained or is
         otherwise  covered  by  insurance  that is  subsequently  reinsured  or
         retroceded under this Agreement.

<PAGE>
                                                                          Page 6

                                   ARTICLE VII
                                   -----------

RETROCESSION PREMIUM AND ADJUSTMENT
-----------------------------------

A minimum and deposit  premium of $XX,XXX,XXX is due in 1999 in equal  quarterly
installments of $XX,XXX,XXX each at January 1, April 1, July 1, and October 1.

The retrocession  premium shall be an amount equal to the amount of Ultimate Net
Loss ceded under this Agreement as reported by the Corporation as of February 1,
2000, or the Alternate Date,  divided by (X + i)^n,  where i is the yield on the
Government  Treasury  Bond  maturing on February 15, 20XX as of the date of cash
transfer and n is the number of years calculated to the nearest day between cash
transfer and February 15, 20XX. The retrocession premium, after deduction of the
minimum  and  deposit  premium  previously  paid,  shall be due and  payable  on
February 15, 2000, or fourteen days after the Alternate Date.

At its sole option, the Corporation may elect to pay the retrocession premium in
three  equal  installments.  The first  installment  shall be due and payable on
February  15,  2000,  or  fourteen  days after the  Alternate  Date.  The second
installment  plus  interest  shall be due and  payable  one year after the first
installment  is due, and the third  installment  plus interest  shall be due and
payable two years  after the first  installment  is due.  Interest on the unpaid
balance shall accrue from and after the first installment's due date, and shall
be  calculated  daily by  applying  the yield of the  Government  Treasury  Bond
maturing on February 15, 20XX.

                                  ARTICLE VIII
                                  ------------

EXPERIENCE ACCOUNT BALANCE
--------------------------

The  Retrocessionaire  shall calculate a notional  Experience Account Balance at
the end of each quarter year until  expiration of all of the  Retrocessionaire's
obligations under this Agreement. The Experience Account Balance shall equal:

  The minimum and deposit premium received by the Retrocessionaire at inception
                                less $XX,XXX,XXX
                                      plus
     XX% of the retrocession premium due hereon, if any, at February 1, 2000
                             or the Alternate Date
                                      plus
          interest credited by applying the average of the three-month
            U.S. Treasury Bill rate less XX basis points against the
          Experience Account Balance for the quarter, calculated daily
                                      less
         Ultimate Net Loss paid by the Retrocessionaire for the quarter.

The "average of the three-month U.S.  Treasury Bill rate" shall equal the sum of
the three rates as published in the Wall Street Journal on the last business day
of each month in the quarter, divided by three.

<PAGE>
                                                                          Page 7

                                   ARTICLE IX
                                   ----------

LOSS SETTLEMENTS
----------------

The Corporation shall report quarterly to the  Retrocessionaire  the development
of the incurred  Ultimate Net Loss ceded by a report  showing in summary  format
the  percentage  and dollar amount of Ultimate Net Loss for the term, as advised
at  February  1,  2000,  or the  Alternate  Date,  which  has  been  paid by the
Corporation.  At such time as the amount of paid  Ultimate  Net Loss exceeds the
retention  under  this  Agreement,  the  Retrocessionaire  shall  reimburse  the
Corporation by payment within 60 days of the advice of amounts becoming due.

                                    ARTICLE X
                                    ---------

COMMUTATION AND EXPERIENCE REFUND
---------------------------------

This Agreement may be commuted at the Corporation's  sole option in the event of
no Ultimate Net Loss being ceded  hereunder by giving 90 days advance  notice at
any time of its intent to so commute after  expiration of the term. In the event
of ceded Ultimate Net Loss  hereunder,  the  Corporation  may still, at its sole
option,  commute by giving 90 days advance notice, but not prior to December 31,
2009.

If at the time of  commutation  the amount of unpaid  Ultimate  Net Loss is less
than or equal to the Experience Account Balance, the Retrocessionaire  agrees to
pay all unpaid Ultimate Net Loss as of the date of commutation.

If at the time of commutation  the amount of unpaid Ultimate Net Loss is greater
than the  Experience  Account  Balance,  the unpaid  Ultimate  Net Loss shall be
commuted at an amount to be mutually agreed. If mutual agreement is not reached,
then no commutation shall be permitted.

In the event that unpaid  Ultimate  Net Loss is commuted,  the  Retrocessionaire
agrees to pay an  experience  refund equal to the positive  difference,  if any,
between the Experience Account Balance and the commuted value of unpaid Ultimate
Net Loss.

Payment by the Retrocessionaire of the commuted unpaid Ultimate Net Loss and the
experience  refund, if any, shall constitute a complete and final release of the
Retrocessionaire in respect of its obligations under this Agreement.

Any amount due to the  Corporation  as calculated  above shall be payable by the
Retrocessionaire within 30 days following the date of commutation.

<PAGE>
                                                                          Page 8

                                   ARTICLE XI
                                   ----------

COMMUTATION APPROVAL ON CORPORATION'S POLICIES
----------------------------------------------

In the event of a commutation of any Policy resulting in the payment of Ultimate
Net  Loss  in  excess  of  $X,XXX,XXX  prior  to the  time  required  under  the
Corporation's Policies for the term of this Agreement,  then the retention under
this Agreement shall be determined as if such  commutation or other  arrangement
had not occurred. The analysis to determine both the ultimate reserve amount and
the payout pattern which would have occurred on a commuted Policy shall,  unless
waived  in  writing  by  the  Retrocessionaire,  be  made  on  the  basis  of an
independent reserve analysis. The Retrocessionaire will select a firm acceptable
to the Corporation to conduct the analysis.  The Retrocessionaire shall bear the
cost of such  analysis  and the  results  of such  analysis  shall be binding in
determining  the  ultimate  reserve  amount and payout  pattern for the commuted
reinsurance contract.

                                   ARTICLE XII
                                   -----------

EXPIRATION DURING LOSS
----------------------

(This article applies only to property insurance and reinsurance.)

If this Agreement expires while an occurrence  covered hereunder is in progress,
the Retrocessionaire's liability hereunder shall, subject to the other terms and
conditions of this  Agreement,  be determined  as if the entire  occurrence  had
taken place prior to the expiration of this Agreement,  provided that no part of
such occurrence is claimed against any renewal or replacement of this Agreement.

                                  ARTICLE XIII
                                  ------------

STOP LOSS (AGGREGATE) INCLUSION
-------------------------------

All  aggregate  Policies  coming  within  the scope of this  Agreement  shall be
covered on a risks  attaching  basis  rather  than on an  occurrence  basis.  An
aggregate  Policy issued for a period of more than 12 months shall be considered
as  attaching  at each  anniversary  date of such Policy while such Policy is in
force.

<PAGE>
                                                                          Page 9

                                   ARTICLE XIV
                                   -----------

WARRANTY
--------

The  Corporation  shall not introduce  any change in its  generally  established
practices, including but not limited to accounting,  acceptance and underwriting
policies,  in respect of the  business  which is the  subject of this  Agreement
without the prior approval of the Retrocessionaire,  and such approval shall not
be unreasonably withheld by the Retrocessionaire.  The Corporation  specifically
warrants  that it will not change its gross line guide nor  inuring  protections
without  prior  advice  to and  approval  from  the  Retrocessionaire,  and such
approval shall not be unreasonably withheld by the Retrocessionaire.

                                   ARTICLE XV
                                   ----------

CURRENCY
--------

All  financial  transactions  contemplated  by this  Agreement  shall  be in the
currency of the United States of America.

                                   ARTICLE XVI
                                   -----------

ACCESS TO RECORDS
-----------------

At any reasonable time, the  Retrocessionaire or its designated  representatives
shall have free access to all records of the  Corporation  which pertain to this
Agreement.

                                  ARTICLE XVII
                                  ------------

ERRORS AND OMISSIONS
--------------------

Any inadvertent delays,  omissions or errors shall not be held to relieve either
party  hereto from any  liability  which would  attach to it  hereunder  if such
delay,  omission or error had not been made,  provided  such delay,  omission or
error is rectified  upon  discovery,  and does not impose any greater  liability
upon the other party than would have attached  hereunder if the delay,  omission
or error had not occurred.

<PAGE>
                                                                         Page 10

                                  ARTICLE XVIII
                                  -------------

TAXES
-----

In  consideration  of the terms under which this  Agreement is entered into, the
Corporation  will not claim a deduction  in respect of the  premium  hereon when
making tax returns,  other than income or profits tax  returns,  to any state or
territory of the United  States of America,  the District of Columbia or Canada,
and the  Corporation  will be liable for payment of all premium taxes on premium
ceded under this Agreement.

                                   ARTICLE XIX
                                   -----------

OFFSET
------

The  Corporation  and the  Retrocessionaire  shall  have the right to offset any
balance(s) due from one to the other under this  Agreement.  The party asserting
the right of offset may exercise such right any time whether the  balance(s) due
are on  account  of  premiums  or  losses  or  otherwise.  In the  event  of the
insolvency  of a party hereto,  offset shall only be allowed in accordance  with
the provision of Section 7427 of the Insurance Law of the State of New York.

                                   ARTICLE XX
                                   ----------

INSOLVENCY
----------

In the event of the insolvency of the Corporation,  the retrocession  under this
Agreement  shall be payable  directly to the  Corporation or to its  liquidator,
receiver,  conservator  or statutory  successor on the basis of the liability of
the Corporation  without diminution because of the insolvency of the Corporation
or because the liquidator,  receiver,  conservator or statutory successor of the
Corporation  has  failed to pay all or a portion  of any  claim.  It is  agreed,
however,  that the liquidator,  receiver,  conservator or statutory successor of
the  Corporation  shall  give  written  notice  to the  Retrocessionaire  of the
pendency of a claim  against the  Corporation  indicating  the Policy  reinsured
which  claim   would   involve  a  possible   liability   on  the  part  of  the
Retrocessionaire  within a  reasonable  time  after  such  claim is filed in the
conservation or liquidation  proceeding or in the receivership,  and that during
the pendency of such claim, the  Retrocessionaire may investigate such claim and
interpose,  at its own  expense,  in the  proceeding  where  such claim is to be
adjudicated,  any  defense  or  defenses  that  it  may  deem  available  to the
Corporation or its liquidator, receiver, conservator or statutory successor. The
expense thus incurred by the  Retrocessionaire  shall be chargeable,  subject to
the approval of the Court,  against the  Corporation  as part of the expenses of
conservation  or  liquidation  to the extent of a pro rata share of the  benefit
which may accrue to the Corporation solely as a result of the defense undertaken
by the Retrocessionaire.

<PAGE>
                                                                         Page 11

INSOLVENCY (continued)
----------------------

Where  two or more  Retrocessionaires  are  involved  in the  same  claim  and a
majority in interest elect to interpose defense of such claim, the expense shall
be  apportioned  in accordance  with the terms of this  Agreement as though such
expense had been incurred by the Corporation.

It is further  understood and agreed that, in the event of the insolvency of the
Corporation,  the retrocession under this Agreement shall be payable directly by
the  Retrocessionaire  to  the  Corporation  or  to  its  liquidator,  receiver,
conservator or statutory successor, except as provided by Section 4118(a) of the
New York Insurance Law or except (a) where the Agreement  specifically  provides
another  payee  of such  retrocession  in the  event  of the  insolvency  of the
Corporation  and (b) where the  Retrocessionaire  with the consent of the direct
Insured or Insureds has assumed such Policy  obligations  of the  Corporation as
direct obligations of the Retrocessionaire to the payees under such Policies and
in substitution for the obligations of the Corporation to such payees.

                                   ARTICLE XXI
                                   -----------

ARBITRATION
-----------

As a condition  precedent to any right of action hereunder,  any dispute arising
out of  this  Agreement  shall  be  submitted  to the  decision  of a  board  of
arbitration composed of two arbitrators and an umpire, meeting in Overland Park,
Kansas,   unless   otherwise   mutually   agreed  by  the  Corporation  and  the
Retrocessionaire.

The members of the board of arbitration shall be active or retired disinterested
officials of insurance or reinsurance  companies,  or  underwriters  at Lloyd's,
London.  Each party shall appoint its arbitrator and the two  arbitrators  shall
choose an umpire before instituting the hearing.  In the event that either party
should fail to choose an arbitrator  within 30 days following a written  request
by the other party to enter upon  arbitration,  the requesting  party may choose
two  arbitrators  who  shall in turn  choose  an  umpire  before  entering  upon
arbitration.  In the event the two arbitrators fail to agree on an umpire either
party  shall  have the right to submit the  matter to the  American  Arbitration
Association  in effect at that  time to name an  umpire in  accordance  with the
qualifications provided hereinabove.

Each party shall present its case to the  arbitrators  within 60 days  following
the date of their appointment.  The board shall make its decision with regard to
the custom and usage of the insurance and reinsurance business.  The board shall
issue its  decision  in writing  based upon a hearing in which  evidence  may be
introduced  without  following  strict  rules of  evidence  but in  which  cross
examination  and  rebuttal  shall be allowed.  The board shall make its decision
within 60 days  following  the  termination  of the hearings  unless the parties
consent to an extension.  The majority  decision of the board shall be final and
binding upon all parties to the proceeding.  Judgment upon the final decision of
the board may be entered in any court of competent jurisdiction.

<PAGE>
                                                                         Page 12

ARBITRATION (continued)
-----------------------

If more than one  Retrocessionaire  is  involved in the same  dispute,  all such
Retrocessionaires  shall  constitute  and act as one party for  purposes of this
Article  and  communications  shall  be made by the  Corporation  to each of the
Retrocessionaires  constituting the one party,  provided,  however, that nothing
shall impair the rights of such Retrocessionaires to assert several, rather than
joint,  defenses or claims,  nor be construed  as changing the  liability of the
Retrocessionaires under the terms of this Agreement from several to joint.

Each party shall bear the expense of its own  arbitrator  and shall  jointly and
equally  bear with the other party the expense of the umpire.  In the event both
arbitrators  are chosen by one party,  the  expense of the  arbitrators  and the
umpire shall be jointly and equally  borne  between the parties.  The  remaining
costs of the arbitration proceedings shall be allocated by the board.

This Article shall survive the termination of this Agreement.

                                  ARTICLE XXII
                                  ------------

NONWAIVER
---------

The failure of the Corporation or the  Retrocessionaire  to insist on compliance
with this  Agreement  or to  exercise  any right or remedy  hereunder  shall not
constitute a waiver of any rights or remedies contained herein, nor estop either
party from thereafter  demanding full and complete compliance nor prevent either
party from exercising such rights or remedies in the future.

                                  ARTICLE XXIII
                                  -------------

INTERMEDIARY
------------

Bates  Turner  Intermediaries  LLC is  hereby  recognized  as  the  Intermediary
negotiating   this  Agreement  for  business   hereunder.   All   communications
(including, but not limited to, notices, statements,  premiums, return premiums,
commissions,   taxes,  losses,  loss  adjustment  expenses,  salvages  and  loss
settlements)  relating  hereto shall be  transmitted  to the  Corporation or the
Retrocessionaire  through Bates Turner Intermediaries LLC, 6329 Glenwood,  Suite
200, P.O. Box 2959, Overland Park, Kansas, 66201. Payments by the Corporation to
the Intermediary shall constitute payment to the  Retrocessionaire to the extent
of such payments.  Payments by the  Retrocessionaire  to the Intermediary  shall
only constitute  payment to the Corporation to the extent that such payments are
actually received by the Corporation.

<PAGE>
                                                                         Page 13

IN WITNESS  WHEREOF,  the parties hereto by their duly authorized  officers have
executed this Agreement in triplicate.

At Overland Park, Kansas, this 19th day of July, 1999.
                               ----        ----

EMPLOYERS REINSURANCE CORPORATION

By:          /s/ Jeffrey J. Cooper
   --------------------------------------

Attest:       /s/ Kimberly S. Brown
       ----------------------------------

At Stamford, Connecticut, this 29th day of September, 1999.
                               ----        ---------

NATIONAL INDEMNITY COMPANY
Per Berkshire Hathaway Group

By:           /s/ John D. Arendt
   --------------------------------------

Attest:        /s/ Brian Snover
   --------------------------------------

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