EXHIBIT 10.5
Letter between Xin Hai Technology Development L.T.D. and Infornet
Investment, L.T.D. dated April 13, 2000
Xin Hai Technology Development Ltd.
Xxxxx 000, Xxxxxxxx X XX. 00, Xx Gen Lin Road,
West District, City of Beijing,
Peoples' Republic of China
April 13, 2000
Infornet Investment Ltd.
00xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxx
Attention: Xxxxxx Xxxxxx
Dear Sirs:
Re: Cooperative Joint Venture between
Xin Hai Technology Development Ltd. ("Xin Hai")
and Infornet Investment Ltd. ("Infornet")
We acknowledge that under Article 5 of the Cooperative Joint Venture Contract
dated as of August 25, 1997 between our two companies (the "JV Contract"), that
Infornet shall be responsible for making all the required capital contribution
and external financing for the joint venture company as contemplated in Article
3 of the JV Contract.
We further acknowledge that, pursuant to Article 4 of the JV Contract, until
such time as Infornet's total investment and interest from the external
financing in the joint venture company has been fully recovered, the
distribution of profits shall be in accordance with the following percentages:
Infornet - 80% of profits
Xin Hai - 20% of profits
Under Article 6 of the JV Contract, the board of directors of the joint venture
company shall be composed of four directors, of which two shall be designated by
Xin Hai and two by Infornet. In addition, unanimous approval of all the joint
venture company directors shall be required before any decision is made
concerning certain matters as listed in section 6.3 of Article 6 of the JV
Contract.
In consideration of Infornet's sole responsibility for the capital contribution
and external financing of the joint venture company and in order to ensure that
the joint venture company may carry on its business in China in an efficient
manner, Xin Hai hereby agrees that effective August 25, 1997 and continuing
until such time as Infornet's total investment and interest from the external
financing in the joint venture has been fully recovered and thereafter for a
period of 15 years, that Xin Hai will agree to nominate as its two directors in
the joint venture company only those persons who have been selected and
approved by Infornet. Xin Hai is currently very pleased with the current board
of directors which is made up of Xx. Xxxx Xxxx, Xx. Xxxxxx Xxxxxx, Xx. Xxxxxxx
Xxxxxx and Xx. Xxx Xin. There are no plans to change the board. Xin Hai hereby
irrevocably agrees that its nominee will vote with Infornet nominees on all
matters at the board level.
This amends the letter of Agreement dated October 1, 1999. This new letter of
Agreement will allow the nomination of directors by Infornet for another 15
years after the recovery of total investment and interest.
Sincerely,
Xin Hai Technology Development Ltd.
Per:/s/
Authorized Signatory
