Building Leasing Agreement
This Agreement is executed by Party A and Party B on August 26, 2000 in
Nanning:
Party A: Guangxi Communication Service Company
Legal representative: Gu Xiong
Address: 249 Wang Zhou Lu, Nanning
Party B: Guangxi Mobile Communication Company Limited
Legal representative: Gan Yuecai
Address: 92 Min Zu Da Dao, Nanning
Whereas:
1. In order to develop communications business and engage in normal
production and operating activities, Party B needs to lease from Party
A certain buildings and auxiliary facilities owned, or leased from a
third party, by Party A.
2. Both Parties agree that Party A shall provide Party B with building
leasing services in accordance with the terms and conditions of the
Agreement.
THEREFORE, Party A and Party B have reached the following Agreement in
the principle of equality, mutual benefit and fairness through friendly
consultations:
Article One Leased Property
1.1 Buildings and other properties to be leased by Party A to Party B
hereunder include all or part of the following:
1.1.1 Buildings in respect of which Party A has title certificates;
1.1.2 Buildings in respect of which Party A does not have title
certificates but has obtained permanent use right under
relevant documents and agreements;
1.1.3 Buildings under Party's actual control and use notwithstanding
disputes over their ownership or title due to historical or
other reasons;
1.1.4 Temporary fixtures for which Party A has obtained legal use
right.
1.1.5 Buildings or transmission masts owned by Party A; (buildings
under 1.1.1 to 1.1.5 above, "Party A's Own Property")
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1.1.6 Buildings leased by Party A from a third party, in respect of
which Party A has the right to sub-lease to Party B
("Party A's Subleased Property").
1.2 Party A agrees to deliver to Party B the above buildings together with
their existing auxiliary facilities, such as air conditioning, water,
electricity, heating, power and other utilities; provided that, Party B
shall pay the relevant fees and charges in accordance with the terms of
this Agreement and applicable standards stipulated by relevant
government authorities.
Article Two Scope and Purpose of Lease
2.1 Party A agrees to lease the buildings and their auxiliary facilities
(the "Leased Property") listed in the Schedules attached hereto to
Party B in accordance with the terms and conditions of the Agreement
(see the Schedules for the list and details of the Leased Property).
Party B agrees to lease from Party A the Leased Property in accordance
with the terms and conditions of the Agreement hereunder.
2.2 Party B shall use the Leased Property for placing communications
equipment, office use, conducting business operations or carrying out
other legal activities and shall not alter the use of the Leased
Property or sublease them without Party A's consent thereto.
Article Three Delivery of Leased Property
Party A shall clean up and deliver the Leased Property to Party B upon
execution of the Agreement. The Leased Property, upon delivery, shall be in good
conditions satisfactory to the requirements of Party B.
Article Four Payment of Rent and Relevant Fees
4.1 Payment of the rent of Party A's Own Property and other related fees:
4.1.1 Party B agrees to pay Party A rent for Party A's Own Property
and the auxiliary facilities, charges for use of relevant
facilities and equipment, as well as property management fees
in accordance with the provisions of the Agreement.
The rent for the Leased Property shall be calculated on the
basis of the amounts listed in the column of "Evaluated
Rent/Square Meter/Year" in the Schedules attached hereto; rent
of direct current electricity generating equipment per year =
original purchase price of such direct current electricity
generating equipment * user's share in the total consumption
of electricity (in %) * (yearly depreciation ratio of such
equipment + yearly maintenance expenses of such equipment)/(1-
circulation tax rate), where the yearly depreciation ratio is
16.7%, the
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yearly maintenance expenses of such equipment is 3.5%, and the
circulation tax rate is 3.3%. Water and electricity fees shall
be charged on the basis of actual consumption and in
accordance with the applicable national standards. The
property management fee shall be charged in accordance with
the applicable national regulations. Direct current
electricity fees, the water fees and the electricity fees
shall be payable on a monthly basis.
4.1.2 Party B shall pay, within 60 days upon the execution of the
Agreement, the rent for the period from July 1, 2000 to
December 31, 2000 for the Leased Property and the auxiliary
facilities. Party A and Party B agree that the rent shall be
paid on a semi-annual basis beginning from 2001. The Parties
shall complete the verification of specific items and amounts
of the rent by March 15 and September 15 each year. The rent
of the Leased Property for the first half and second half of
the year shall be paid by Party B to Party A on or before
March 25 and September 25, respectively. Party A shall provide
Party B with valid invoices in respect of such payment upon
the settlement.
4.1.3 Party B shall pay the rent in accordance with the provisions
of the Agreement prior to the expiry of the payment period
stipulated herein. If Party B fails to fulfill its obligation
of payment stipulated in the Agreement, Party B shall be
charged a penalty of 0.03% of the overdue and unpaid amount
per day until Party B has fulfilled such obligations; in the
event that Party B fails to make the payment as stipulated in
the Agreement for two months, Party A shall have the right to
terminate the lease to Party B of the relevant part of the
Leased Property, but other parts of the Agreement shall remain
valid.
4.1.4 Party A shall pay the taxes and expenses in respect of the
lease of Party A's Own Property.
4.2 Payment of rent and related fees for Party A's Subleased Property
In respect of Party A's Subleased Property, Party A shall advise Party
B the rent, the time of rent payment and the method of payment agreed
upon by Party A and the third party from whom Party A subleases such
property. Party B shall pay such third party directly such rent at such
time and in such method as advised by Party A.
Article Five Use, Increase and Decrease of Leased Property
5.1 Party B shall have the right to occupy and enjoy the use of the Leased
Property and the auxiliary facilities without interference in
accordance with the provisions of Article 2 during the term of the
Agreement.
5.2 According to its business needs, Party B may request Party A to
increase or decrease the amount of the Leased Property and Party A
shall give its consent if conditions permit. The Parties shall then
re-determine the rent and other
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related fees on the basis of the amount and quality of the increased or
decreased Leased Property.
Article Six Fitting-out and Renovation;
Advertising on Leased Property
6.1 Party B has the right, upon Party A's written consent and at its own
expense, to conduct any fitting-out, installation, change or
improvement inside or outside the Leased Property; provided that, Party
B shall ensure that:
(1) Such fitting-out, installation, change and improvement will
not in any essential way change the nature of the Leased
Property;
(2) Any construction project relating to such fitting-out,
installation, change and improvement will be conducted in an
appropriate way so that all the people and properties are
protected and the businesses of Party A in the nearby area
will not be unreasonably disturbed;
(3) In the event that such fitting-out or renovation work
endangers or causes any potential danger to the safety of the
original structure, Party B shall reinstate the Leased
Property and make compensation for the corresponding losses,
if any.
6.2 Party B may, to the extent that it will not infringe upon Party A's
interests, promote its enterprise image and businesses by hanging or
posting promotional materials or in other legal ways on the side walls
of the Leased Property; provided that such promotion activities shall
not exceed the limits of the Leased Property. The Parties shall specify
the scope of such promotion activities and locations allowed for such
promotion materials when entering into lease of the Leased Property.
Upon termination of the Agreement, Party B shall reinstate the Leased
Property at its own expense and return the Leased Property to Party A;
or, Party B shall return the Leased Property as fitted out and
renovated, in which case Party A shall make appropriate compensations
to Party B.
Article Seven Maintenance, Repair, Replacement
and Improvement of Leased Property
7.1 Party A shall conduct routine maintenance, repairs, replacement and
improvement of the Leased Property and the auxiliary facilities at its
own expense; provided that, expenses incurred from maintenance and
repairs resulted from inappropriate use by Party B shall be borne by
Party B.
7.2 Party A shall immediately repair any damage to the Leased Property not
caused by Party B, exert its utmost efforts to ensure the normal use by
Party B of the Leased Property and bear the expenses in connection
therewith. In the event that such an instance occurs and, in Party B's
judgment, the damage is so serious as to affect the normal use of the
Leased Property by Party B, Party B may select to issue a written
notice to Party A, requesting to suspend or
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terminate the lease of the damaged part of the Leased Property, in
which case Party B need not pay the rent for the damaged part of the
Leased Property beginning from the occurrence of such damage.
7.3 Party B shall repair or compensate for damages caused by it to the
Leased Property and the relevant constructions or other facilities of
Party A and bear the expenses. In the event of such an instance, Party
A, judging from the seriousness of the damage, may have the option to
issue a written notice to Party B, requesting to suspend or terminate
the lease of the damaged part of the Leased Property, to which Party B
shall give its consent, in which case Party B shall pay the rent due
prior to such termination for the damaged part of the Leased Property
and other relevant charges.
Article Eight Term, Cancellation and Renewal of Agreement
8.1 The Agreement, upon execution by the authorized representatives of the
Parties and affixing with their official seals, shall come into effect
on August 20, 2000 and will be in effect for one year.
8.2 Unless otherwise stipulated in the Agreement or with Party B's prior
written consent, Party A shall not terminate the Agreement prior to the
expiration of the lease term hereunder. According to its actual needs,
Party B may terminate or partially cancel the Agreement prior to the
expiration of the term of the Agreement upon three month prior written
notice to Party A. Within seven days after the termination of the
Agreement, Party A shall refund Party B the rent for the period between
the date of the termination and the expiration of the lease term.
8.3 The Agreement shall be automatically extended for one year upon Party
B's six month prior written notice for extension of the lease term,
unless Party A indicates otherwise in writing. The times of such
extension shall be unlimited.
Article Nine Representations and Warranties of Parties
9.1 Each of the Parties represents and warrants to each other as follows:
(1) It is a limited liability company duly established and in
valid existence under the laws of the People's Republic of
China;
(2) It has the right and authority to enter into the Agreement and
fulfill its obligations;
(3) Its representative who will sign the Agreement has been fully
authorized to do so by a valid letter of authorization or by
the relevant resolution of its Board of Directors; and
(4) Upon the execution of the Agreement and its annex attached
hereto, the Agreement shall be binding upon it and can be
enforced under applicable laws.
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9.2 Party A hereby represents and warrants to Party B as follows:
(1) Party A has the right and authority to legally own the Leased
Property stipulated under the Agreement, and possesses all the
relevant and complete approvals and certificates evidencing
its legal ownership of the Leased Property stipulated under
the Agreement, or has the right to sublease to Party B
properties it leases from a third party. Party A has the right
to enter into the Agreement and to lease or sublease to Party
B the Leased Property stipulated in Article One (including the
site and auxiliary facilities) in accordance with the terms
and conditions herein; in the event that Party A's property
rights and use rights to the property herein are contested in
any circumstances and for whatever reasons, and Party B is
unable to exercise its rights as a lessee or sustain other
damages, Party A agrees to hold harmless from and indemnify
Party B against any losses resulted therefrom;
(2) Upon delivery to Party B for use, the Leased Property shall be
in good conditions for normal use;
(3) As long as Party B has paid the rent for the Leased Property
and observed and fulfilled all the representations,
commitments and conditions under the Agreement, Party B shall
be able to freely occupy and enjoy the use of the Leased
Property within the term of the Agreement without
interference.
9.3 In the event that any representations or warranties made by Party A in
Articles 9.1 and 9.2 above are untrue or incomplete, Party B shall have
the right to terminate the Agreement at any time, in which case Party B
shall have the right to claim compensation from Party A for all the
actual losses Party B has sustained.
9.4 Party B hereby represents and warrants to Party A as follows:
9.4.1 Party B will pay the relevant rent to Party A on a timely
basis in accordance with the Agreement. In the event that
Party B delays the rent payment for more than one day, Party B
shall, in addition to payment of the rent overdue, pay, upon
Party A's demand, a penalty of 0.03% of the total overdue
and unpaid payment for each day overdue until Party B has
completely fulfilled its obligations;
9.4.2 Without Party A's written consent, Party B shall not sublease
or transfer to a third party any part of the Leased Property
or any of its rights and obligations hereunder, or change the
use and purpose of the Leased Property and any utilities.
Should Party B violate any of the aforesaid provisions, Party
A shall have the right to request Party B to stop such conduct
and pay a penalty equal to two times the proceeds from such
sublease or transfer received by Party B, if any.
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Article Ten Undertakings and Indemnification
10.1 Unless otherwise stipulated in the Agreement, Party B shall, upon the
demand of Party A, indemnify Party A against and hold Party A harmless
from losses, expenses, damages, claims, actions, debts or liabilities
arising from the following causes:
10.1.1 injuries of any person or damages of property of citizens or
institutions other than Party A or both Parties to the
Agreement due to failure of performance or observation by
Party B of the Agreement, unless such losses, expenses,
damages, claims, actions, debts or liabilities were caused by
Party A's gross negligence or willful misconduct or by an
event of Force Majeure.
10.2 Unless otherwise stipulated in the Agreement, in the event of personal
injuries or property damages within the premises of the Leased Property
due to failure of Party A to fulfill its rights and obligations as
stipulated in the Agreement, Party B may claim for compensation from
Party A and Party A shall indemnify Party B against and hold Party B
harmless from any losses, expenses, damages, claims, actions, debts or
liabilities unless such events were caused by gross negligence or
willful misconduct on the part of Party B or by an event of Force
Majeure.
10.3 Due to historical reasons, certain Leased Property leased by Party B
have not been granted with title certificates and leasing permits. The
Parties agree that Party A shall obtain the aforesaid certificates and
permits [Note: Agreements on obtaining such leasing permits may be
reached in accordance with the applicable regulations in each
province.] and Party B shall render necessary assistance. Party A shall
bear all the relevant fees and expenses in the course of obtaining the
aforesaid certificates and permits. Before Party A has obtained such
certificates and permits, neither Party shall cancel the Agreement on
the ground that Party A has not acquired the aforesaid documents, or
the Party raising the issue of canceling the Agreement shall bear, in
addition to its own losses, all the losses sustained by the other
Party.
10.4 Party A hereby acknowledges and agrees that any dispute with a third
party arising from the lack of clarity of the property rights of the
Leased Property shall have no bearing on Party B, and that Party A
shall resolve any contest raised by any third party over Party B's use
of the Leased Property, and such contest shall not affect Party B's use
of the Leased Property hereunder. Party A shall compensate Party B for
any losses sustained by Party B as the result of the aforesaid reason.
Article Eleven Confidentiality
11.1 Both Parties to the Agreement herein shall keep strictly confidential
the operational data and information of the other Party. Neither Party
shall, without the other Party's written consent, provide or disclose
to any company, enterprise, organization or individual any data or
information with regard to
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the operations of the other Party, except for circumstances stipulated
by the laws of the PRC or of the listing place of China Mobile (Hong
Kong) Limited, or by either Party, for the purpose of its
reorganization, to a third party (including without limitation to,
relevant government departments and all the intermediary institutions
involved in the reorganization) orally or in writing.
Article Twelve Liabilities for Breach of Agreement
12.1 Any failure of either Party to perform any of the terms hereunder shall
be deemed as breach of contract. Upon confirmation of occurrence of a
breach, the breaching Party shall, within ten days of receiving a
written notice from the non-breaching Party explain the circumstances
of the breach, correct the breach and make written notification to the
non-breaching Party to the same effect; in the event that within ten
days the breaching Party has not corrected the breach or rendered any
explanation in writing, the other Party shall have the right to
terminate the Agreement prior to its expiration without notifying in
writing the breaching Party, in which case the breaching Party shall be
responsible to compensate all the economic losses thus sustained by the
other Party. In the event that one Party believes that breach is
nonexistent, both Parties shall consult with each other and try to
resolve the issues thus caused. Should no resolution be reached through
consultation, the issue shall be resolved in accordance with the
dispute resolution clause herein.
Article Thirteen Force Majeure
13.1 Any event or circumstance beyond the reasonable control of the Parties
and could not be avoided by exercise of due care on the part of the
affected Party shall be deemed as an "event of Force Majeure" and shall
include, but not limited to, earthquake, fire, explosion, storm, flood,
lightening, or war.
13.2 Neither Party shall bear any liability for breach of contract to the
other Party for its failure to carry out all or any of its obligations
hereunder as a result of an event of Force Majeure. However, the Party
or Parties affected by an event of Force Majeure shall, within fifteen
days of the occurrence of the such event, notify the other Party of
such event of Force Majeure along with relevant documentary evidence
issued by the relevant government authorities. The Party or Parties
shall resume the performance of its/their obligations hereunder within
a reasonable period of time after the effects of the event of Force
Majeure have been eliminated.
Article Fourteen Governing Law and Dispute Resolution
14.1 The execution, validity, implementation, interpretation and resolution
of dispute of the Agreement shall be governed by the laws of the
People's Republic of China.
14.2 Any dispute arising from or in connection with the validity,
interpretation or execution of this Agreement shall be settled by the
Parties through friendly consultations. In the event that no resolution
can be reached through
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consultations, either Party may submit the dispute to Nanning
Arbitration Commission for arbitration in accordance with its then
effective arbitration rules. Once Guangxi Mobile Communication Company
Limited is transformed into a wholly foreign-owned enterprise, the
dispute resolution institution will automatically change into China
International Economic and Trade Arbitration Commission and any
disputes shall be resolved in accordance with its then effective rules
thereof in Beijing [or Shanghai]. The award of such arbitration shall
be final and binding upon both Parties.
14.3 Except for matters under arbitration, the remaining part of the
Agreement is still in effect during the time of arbitration.
Article Fifteen Assumption and Transfer of Agreement
15.1 Neither Party may assign or transfer all or any part of its rights and
obligations under the Agreement to any third party without the other
Party's prior written consent thereto.
15.2 In the event that Party A transfers its own buildings, Party A shall
ensure that the Agreement will be equally binding upon the transferee.
15.3 Party A hereby acknowledges that Party B may be transformed into a
wholly foreign-owned enterprise during the term of the Agreement
without consent or acknowledgement by Party A either prior to or after
the event, and that Party B's entire rights and obligations under the
Agreement shall not be affected or changed on the ground that the
nature of the company has changed into a wholly foreign-owned
enterprise. Party A will acknowledge the legal status of such wholly
foreign-owned enterprise in performing this Agreement.
Article Sixteen Miscellaneous
16.1 The Agreement constitutes the entire agreement between the Parties with
respect to the subject matter of the Agreement and supercedes any and
all discussions, negotiations and agreements between them regarding the
same subject matter prior to the execution of this Agreement.
16.2 In the performance of the Agreement, if any provision herein becomes
ineffective or unenforceable as the result of implementation or
amendment of law, such provision shall be ineffective to the extent
that such law applies, without invalidating the remaining provisions of
the Agreement. The Parties hereto have the rights to amend the
provisions affected by the future implementation or amendment of law,
which amendment shall constitute an integral part of the Agreement on
the condition that such amendment will have no material effect on
either Party's economic benefits hereunder.
16.3 Neither Party shall have the right to amend or modify this Agreement
without both Parties' written confirmation thereof; the Parties,
however, shall be able
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to enter into supplementary agreements to govern matters not considered
herein.
16.4 The Agreement is signed in four counterparts. Each Party will keep two
copies. The annex and/or supplementary agreements hereto are an
integral part hereof and shall have the same force and effect as the
Agreement.
Party A: Guangxi Communication Party B: Guangxi Mobile
Service Company Communication Company
Limited
By: s/ Gu Xiong By: s/ Gan Yuecai
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Legal or authorized representative Legal or authorized representative
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Nanning Branch Company Subleased Properties (Buildings)
93 Youai Road (Guangxi, China) Building Leasing Agreement - Guangxi Communication Service Co. and Guangxi Mobile Communication Co. Ltd.
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