BUILDING LEASING AND PROPERTY MANAGEMENT AGREEMENT
This Agreement is executed by Party A and Party B on September 20, 2000
in Shanghai:
PARTY A: SHANGHAI COMMUNICATION SERVICE COMPANY
Legal Representative: Cai Guibao
Address: 1122 Yan'an Dong Lu, Shanghai
PARTY B: SHANGHAI MOBILE COMMUNICATION COMPANY LIMITED
Legal Representative: Chen Suxian
Address: 668 Beijing Dong Lu, Shanghai
WHEREAS:
1. In order to develop its 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 and property management services in accordance with the terms
and conditions of this 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:
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 A'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, and to concurrently
provide property management services for the buildings leased to Party
B hereunder; 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 Schedule attached hereto to Party
B in accordance with the terms and conditions of this Agreement (see
the appendix of this Agreement for the list and details of such Leased
Property). Party B agrees to lease from Party A the Leased Property in
accordance with the terms and conditions of this Agreement and accept
property management services provided by Party A 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 this Agreement. The Leased Property, upon delivery, shall be in
good conditions satisfactory to the requirements of Party B.
ARTICLE FOUR PAYMENT OF RENT, PROPERTY MANAGEMENT FEE AND
RELEVANT FEES
4.1 The rent of Party A's Own Property, the property management fee, the
rent for the power supply equipment and the direct current electricity
supply equipment and other related fees are to be determined by the
market price.
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 fee
as agreed upon by the Parties in this Agreement.
The rent for the Leased Property shall be based on the price
determined upon the capital contribution (see the appendix for
details). The
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property management fee shall be based on the services
provided by Party A and is hereby agreed upon by the Parties
as follows:
Telecommunications Building: RMB 12 per square meter per
month; Business and office areas: RMB 10 per square meter per
month; Base stations and other sites: RMB 6 per square meter
per month.
4.1.2 Party B shall pay, within 15 days upon the execution of this
Agreement the rent and the property management fee for the
period from September 20, 2000 to December 31, 2000 for the
Leased Property and the auxiliary facilities. Party A and
Party B agree that the rent and the property management fee
shall be paid on a semi-annual basis beginning from 2001. The
Parties shall complete the verification of specific items and
amounts of the Leased Property and the property management
services provided hereunder by March 15 and September 15 each
year. The rent of the Leased Property and the property
management fee payable 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 evidential documents in respect of such
payment upon the settlement.
4.1.3 Party B shall pay the rent in accordance with the provisions
of this Agreement prior to the expiry of the payment period as
agreed upon by the Parties. If Party B fails to fulfill its
obligation of payment stipulated in this Agreement, Party B
shall be charged a surcharge 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 this 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
this 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 that is used by Party B,
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 this
Agreement.
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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 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
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 this 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
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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 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
and payable 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 This Agreement, upon execution by the authorized representatives of the
Parties and affixing with their official seals, shall come into effect
on September 20, 2000 and expire on September 19, 2010 (for a term of
ten years). Unless otherwise stipulated in this Agreement, neither
Party shall terminate the Agreement prior to the expiration of the
lease term.
8.2 Unless otherwise stipulated in this Agreement or with Party B's prior
written consent, Party A shall not terminate this Agreement prior to
the expiration of the lease term hereunder. According to its actual
needs, Party B may terminate or partially cancel this Agreement prior
to the expiration of the term of this Agreement upon three month prior
written notice to Party A. If this Agreement is terminated prior to its
expiration date or is partially cancelled, within seven days after such
termination or cancellation, Party A shall refund Party B, out of the
rent and property management fee already paid by Party B, the rent and
property management fee of Leased Property for the period between the
date of such termination and the scheduled expiration date of this
Agreement.
8.3 In respect of Party A's Own Property, this Agreement shall be
automatically extended for one year upon the expiration of its term,
unless Party B indicates otherwise in writing. The times of such
extension shall be unlimited. In respect of Party A's Subleased
Property, this Agreement may also be automatically extended for one
year upon the expiration of its term (the times of such extension shall
be unlimited), unless Party A indicates in writing of its intention to
terminate this Agreement three months prior to the expiration date
hereof, this Agreement.
ARTICLE NINE REPRESENTATIONS AND WARRANTIES OF PARTIES
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9.1 Each of the Parties represents and warrants to each other as follows:
(1) It is a limited liability company or an enterprise legal
person 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 this Agreement
and fulfill its obligations;
(3) Its representative who will sign this 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 this Agreement and its annex attached
hereto, this Agreement shall be binding upon it and can be
enforced under applicable laws.
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 this Agreement, and possesses all
the relevant and complete approvals and certificates
evidencing its legal ownership of the Leased Property
stipulated under this 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 this 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 this Agreement, Party B shall
be able to freely occupy and enjoy the use of the Leased
Property within the term of this 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 this 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:
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9.4.1 Party B will pay the relevant rent to Party A on a timely
basis in accordance with this 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 surcharge equal to two times the proceeds from such
sublease or transfer received by Party B, if any.
ARTICLE TEN UNDERTAKINGS AND INDEMNIFICATION
10.1 Unless otherwise stipulated in this 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 this
Agreement due to failure of performance or observation by
Party B of this 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 this 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 this 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 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 this Agreement on
the ground that Party A has not acquired the aforesaid documents, or
the Party raising the issue of canceling this Agreement shall bear, in
addition to its own losses, all the losses sustained by the other
Party.
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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 this 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 the operations of the other Party, except
for circumstances stipulated by the laws of the PRC and 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 explaining the
circumstances of such breach, correct such 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 correct the
breach or rendered any explanation in writing, the other Party shall
have the right to terminate this Agreement prior to its expiration upon
written notice to 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
such 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 evnet of Force Majeure. However, the Party
or Parties affected by an event
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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 this 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 consultations, either Party may submit the
dispute to Shanghai Arbitration Commission for arbitration in
accordance with its then effective arbitration rules. Once Shanghai
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 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 this
Agreement is still in effect during the time of arbitration.
ARTICLE FIFTEEN ASSUMPTION, TRANSFER
AND TERMINATION OF AGREEMENT
15.1 Neither Party may assign or transfer all or any part of its rights and
obligations under this 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 this 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 this 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 this
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.
15.4 In the event that the following conditions are not met, Shanghai Mobile
Communication Company Limited shall be entitled to terminate this
Agreement at any time. After the termination of this Agreement, the
Parties shall cease to enjoy any rights or assume any obligations under
this Agreement
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or in connection with its termination, except the rights and
obligations that have incurred under this Agreement prior to such
termination.
(1) China Mobile (Hong Kong) Limited ("CMHK") shall have been
granted relevant waivers by the Stock Exchange of Hong Kong
Limited ("HKSE") for CMHK's connected transactions in
accordance with the listing rules of HKSE ("Listing Rules");
and
(2) The independent shareholders of CMHK who are deemed to be
independent in accordance with the listing rules ("Independent
Directors") shall have approved relevant transactions.
ARTICLE SIXTEEN NOTICES
16.1 Any notice or other document to be given under this Agreement shall be
delivered in writing and may be delivered in person, sent by registered
mail or transmitted by facsimile to the Parties at their legal
addresses stated in this Agreement or any other addresses a Party may
have notified the other Party in accordance with this Article.
16.2 Any notice or document shall be deemed to have been received at the
time as follows:
if delivered in person, at the time of delivery;
if delivered by registered mail, five (5) business days after being
posted (excluding Saturdays, Sundays and public holidays); and
if transmitted by facsimile, upon receipt, or if the time of
transmission is during non-business hours, it shall be deemed to have
been given at the beginning of the normal business hours of the
succeeding day (excluding Saturdays, Sundays and public holidays),
subject to proof by the sender or confirmation from the facsimile
machine used for such transmission that a satisfactory transmission has
been completed.
ARTICLE SEVENTEEN MISCELLANEOUS
17.1 This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter of this Agreement and supercedes any
and all discussions, negotiations and agreements between them regarding
the same subject matter prior to the execution of this Agreement.
17.2 In the performance of this 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
this 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
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integral part of this Agreement on the condition that such amendment
will have no material effect on either Party's economic benefits
hereunder.
17.3 Neither Party shall have the right to amend or modify this Agreement
without both Parties' written confirmation thereof; the Parties,
however, shall be able to enter into supplementary agreements to govern
matters not considered herein.
17.4 This Agreement is signed in six counterparts. Each Party will keep
three copies. The annex and/or supplementary agreements hereto are an
integral part hereof and shall have the same force and effect as this
Agreement.
PARTY A: SHANGHAI COMMUNICATION PARTY B: SHANGHAI MOBILE
SERVICE COMPANY COMMUNICATION COMPANY
LIMITED
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By: s/Cai Guibao By: s/Chen Suxian
Legal or authorized representative Legal or authorized representative
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Schedule 0
LIST OF BUILDING AND PROPERTY RENT
Baoshan City Industry Garden Development Ltd. Co. (Shanghai, China) Building Leasing and Property Management Agreement - Shanghai Communication Service Co. and Shanghai Mobile Communication Co. Ltd.
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