{"id":43339,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/capital-contribution-agreement-china-mobile-communications7.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"capital-contribution-agreement-china-mobile-communications7","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/capital-contribution-agreement-china-mobile-communications7.html","title":{"rendered":"Capital Contribution Agreement – China Mobile Communications Corp., Shanghai Mobile Communication Co. and Shanghai Mobile Communication Co. Ltd."},"content":{"rendered":" CAPITAL CONTRIBUTION AGREEMENT\n\n This Capital Contribution Agreement (the \"Agreement\") is executed by\nthe following three parties on August 30, 2000 in Shanghai:\n\n(1) CHINA MOBILE COMMUNICATIONS CORPORATION, a wholly state-owned limited\n liability company duly established and in valid existence under the\n laws of the People's Republic of China (\"PRC\"), with its legal address\n at 53 A, Xibianmen Nei Da Jie, Xuanwu District, Beijing, PRC (\"China\n Mobile Group\");\n\n(2) SHANGHAI MOBILE COMMUNICATION COMPANY, a wholly state-owned enterprise\n duly established and in valid existence under the laws of PRC, with its\n legal address at 1122, Yan'an Dong Lu, Shanghai, PRC (the \"Service\n Company\"). The Service Company is going through name changing\n procedures to change its name into \"Shanghai Communication Service\n Company\"; and\n\n(3) SHANGHAI MOBILE COMMUNICATION COMPANY LIMITED, a limited liability\n company duly established and in valid existence under the laws of PRC,\n with its legal address at 668, Beijing Dong Lu, Shanghai, PRC\n (\"Shanghai Mobile\").\n\nWHEREAS:\n\n1. China Mobile Group and the Service Company have jointly established\n Shanghai Mobile, and hold 80% and 20% of its equity interest,\n respectively;\n\n2. Pursuant to the \"Notice of Guidance Opinions on Establishing China\n Mobile Group\" (Xin Bu Zheng [1999] No. 360) issued by the Ministry of\n Information Industry, the communication businesses and related assets\n in Shanghai shall be transferred to and managed by China Mobile Group;\n\n3. China Mobile Group has decided to inject and contribute the\n communication businesses and related assets in Shanghai to Shanghai\n Mobile;\n\n4. The Board of Shanghai Mobile agrees by resolution to China Mobile\n Group's injection and contribution of the communication businesses and\n related assets in Shanghai to Shanghai Mobile;\n\n THEREFORE, the three Parties, namely China Mobile Group, the Service\nCompany and Shanghai Mobile, have reached the following agreement:\n\n\n\n\n 1\n 2\n\n ARTICLE ONE DEFINITIONS\n\n1.1 Unless the context indicates otherwise, the following terms shall have\n the meanings as defined below:\n\n \"ASSET APPRAISAL REPORT\" shall mean the asset appraisal report, with\n the Base Date being June 30, 2000, prepared by Zhongzi Asset Appraisal\n Company Limited and approved by the Ministry of Finance with regard to\n the assets and liabilities of communication businesses of Shanghai\n Mobile (see Appendix A of the Agreement).\n\n \"RELATED INTERESTS AND ASSETS\" shall mean all rights, interests and\n assets included in the Asset Appraisal Report and the contracts,\n agreements, certificates, business operation data, files and documents\n in connection with such rights, interests and assets, as well as any\n profits and benefits from such rights, interest and assets accrued\n thereon after June 30, 2000.\n\n \"RELATED LIABILITIES\" shall mean all liabilities set out in the\n Liability List in Appendix A of the Agreement and the contracts,\n agreements, certificates, business operation data, files and documents\n in connection with such liabilities.\n\n \"RELATED PERSONNEL\" shall mean 2,380 employees engaged in mobile\n communication services and employed by the Shanghai Mobile\n Communication Company (the predecessor of the Service Company).\n\n \"RELATED SERVICES\" shall mean the mobile communication businesses\n operated by the Shanghai Mobile Communication Company (the predecessor\n of the Service Company) in Shanghai and all the telecommunication\n operating licenses, spectrum use permits, telecommunication networks\n number resources use approvals, mobile communication base station\n licenses and all other related authorizations held by it.\n\n \"EFFECTIVE DATE\" shall mean the date when the Agreement is executed.\n\n1.2 Unless the Agreement specifies otherwise, the articles and schedules\n mentioned herein shall mean the articles and schedules of the\n Agreement. All schedules constitute an integral part of the Agreement.\n\n ARTICLE TWO INJECTION OF ASSETS AND SERVICES\n\n2.1 China Mobile Group shall, on the Effective Date, inject all the Related\n Interests and Asset, the Related Liabilities and the Related Services\n into Shanghai Mobile.\n\n2.2 Upon the Effective Date, Shanghai Mobile shall beneficially own the\n Related Interest and Assets and the Related Services, clear and free of\n any encumbrance, pledge or any other third-party interests, and shall\n assume the Related Liabilities.\n\n\n\n\n 2\n 3\n\n2.3 Pursuant to the Asset Appraisal Report, the total value of such Related\n Interests and Asset, the Related Liabilities and the Related Services\n is RMB6,028,667,700.\n\n2.4 The Base Date of the Asset Appraisal Report is June 30, 2000. During\n the period from the Base Date to the Effective Date, Shanghai Mobile\n shall enjoy and assume any and all assets, interests, rights and\n liabilities arising from the Related Interests and Assets, the Related\n Liabilities and Related Services.\n\n2.5 The Service Company should notify the other party to any relevant\n contract regarding the transfer of the Related Interest and Asset, the\n Related Liabilities and the Related Businesses, and obtain such party's\n consent to such transfer.\n\n ARTICLE THREE EQUITY INTERESTS OF PARTIES AFTER CAPITAL CONTRIBUTION\n\n3.1 After the capital contribution, China Mobile Group and the Service\n Company will own 99.97% and 0.03% of the equity interests,\n respectively, in Shanghai Mobile.\n\n ARTICLE FOUR RELATED PERSONNEL\n\n4.1 From the Effective Date, the Related Personnel shall be employed by\n Shanghai Mobile.\n\n ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS\n\n5.1 Each Party hereto warrants that it has all requisite authority, power\n and ability to execute and perform the Agreement. The Agreement, upon\n execution, will constitute legal, valid and binding obligations of each\n of China Mobile Group, the Service Company and Shanghai Mobile.\n\n5.2 Each of China Mobile Group and the Service Company hereby represents\n and warrants to Shanghai Mobile that, as of the Effective Date,\n Shanghai Mobile will own the Related Interests and Assets and the\n Related Services, clear and free of any encumbrance, pledge or any\n other third-party interests, and will assume the Related Liabilities.\n\n ARTICLE SIX SETTLEMENT OF DISPUTES\n\n6.1 Any dispute arising from or in connection with the interpretation or\n performance of this Agreement shall be settled by the Parties through\n friendly negotiations conducted among representatives appointed by the\n Parties for this purpose. In the case that no resolution is reached\n through consultations within 90 days after the occurrence of any\n dispute, any Party may bring an action to a competent people's court\n for its judgment.\n\n\n\n\n 3\n 4\n\n ARTICLE SEVEN NOTICES\n\n7.1 Any notice to be given under the Agreement shall be made in writing and\n sent by mail, telex, telegraph or facsimile to the other Party's\n address set out in the front page of the Agreement or to any other\n address as such Party may designate in writing from time to time.\n\n7.2 Any notice shall be deemed to have been received at the time as\n follows:\n\n if delivered in person, at the time of delivery;\n\n if delivered by mail, on the date of the receipt;\n\n if delivered by telex, at the time of taking back the receipt;\n\n if transmitted by facsimile, upon delivery.\n\n ARTICLE EIGHT GOVERNING LAW\n\n8.1 The Agreement shall be governed by and interpreted in accordance with\n the laws of the PRC.\n\n ARTICLE NINE LANGUAGE\n\n9.1 The Agreement is executed in Chinese.\n\n ARTICLE TEN EFFECTIVE DATE\n\n10.1 The Agreement shall come into effect upon the date when it is executed\n by the authorized representatives of the Parties.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n 4\n 5\n\nPARTY A: CHINA MOBILE COMMUNICATIONS CORPORATION\n\nBy: s\/Xue Taohai\n -------------------------\n Authorized representative\n\nPARTY B: SHANGHAI MOBILE COMMUNICATION COMPANY (SHANGHAI COMMUNICATION\n SERVICE COMPANY)\n\nBy: s\/Cai Guibao\n -------------------------\n Authorized representative\n\nPARTY C: SHANGHAI MOBILE COMMUNICATION COMPANY LIMITED\n\nBy: s\/Chen Suxian\n -------------------------\n Authorized representative\n\n\n\n\n\n\n\n\n\n\n\n\n\n 5\n 6\n\nAPPENDIX A\n\n MINISTRY OF FINANCE DOCUMENT\n\n Cai Qi [2000] No. 269\n\n ------------------------------------------------------\n\n LETTER REGARDING OPINIONS ON VERIFICATION OF ASSET APPRAISAL OF INCREASE OF\n CAPITAL IN MOBILE COMMUNICATION COMPANIES LIMITED IN BEIJING AND OTHER SIX\n MUNICIPALITIES, PROVINCES AND AUTONOMOUS REGION AND OF CAPITAL CONTRIBUTION\n IN CHINA MOBILE (HONG KONG) LIMITED BY CHINA MOBILE GROUP\n\nMinistry of Information Industry,\n\n We are in receipt from your Ministry of the \"Application for\nConfirmation of Asset Appraisal Results of Increase of Capital in Mobile\nCommunications Companies Limited in Beijing and Other Six Municipalities,\nProvinces and Autonomous Region and of Capital Contribution in China Mobile\n(Hong Kong) Limited by China Mobile Group\" (Xin Bu Qing [2000] No. 780) and the\nAsset Appraisal Reports (Zhong Zi Ping Bao Zi [2000] No. 004-017, 14 such\nreports in all) prepared by Zhongzi Asset Appraisal Company Limited. We hereby\nreply as follows:\n\n1. In connection with China Mobile Group's intention to increase its\n investment in the Mobile Communications Companies Limited of seven\n provinces\/autonomous region\/municipalities, including Beijing, Tianjin,\n Shanghai, Shandong, Hebei, Liaoning and Guangxi, and to inject all of\n its increased interests in the above Mobile Communications Companies\n Limited in such seven provinces\/autonomous region\/municipalities into\n China Mobile (Hong Kong) Limited, we have found, following our\n verification, that the project proposal regarding asset appraisal of\n the above increase of investment in domestic companies and overseas\n investment by China Mobile Group has been approved, that Zhongzi Asset\n Appraisal Company Limited, the appraisal institution undertaking asset\n appraisal in this project, possesses the asset appraisal credentials\n duly granted by the Ministry of Finance, and that the relevant\n appraisal personnel signing all the asset appraisal reports are\n certified for asset appraisal.\n\n2. The replacement cost method has been adopted as the major method of\n such appraisals.\n\n3. The base date of such appraisals is June 30, 2000. The appraisal\n results in the appraisal reports are valid only in respect of the\n assets appraised in this project, the increase of investment by China\n Mobile Group in the Mobile Communications Companies Limited in the\n above seven provinces\/autonomous region\/cities, and the injection by\n China Mobile Group\n\n\n\n\n 1\n 7\n of its entire interests of the above Mobile Communications Companies\n Limited into China Mobile (Hong Kong) following such increase of\n investment. Such result shall become invalid as of June 30, 2001.\n\n4. Users of such appraisal reports shall focus their attention on the\n special items disclosed therein, the items adjusted as of the base date\n and the legal validity of the appraisal reports.\n\n5. Legal liabilities of such appraisal reports shall be borne by the\n appraisal institution engaged to undertake such appraisals and the\n registered asset appraisers signing such appraisal reports, and shall\n not be borne by the appraisal administrative department by virtue of\n this verification.\n\n EXHIBITS:\n\n 1. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Beijing Mobile Communication Company\n Limited by China Mobile Group.\n\n 2. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Tianjin Mobile Communication Company\n Limited by China Mobile Group.\n\n 3. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Shanghai Mobile Communication Company\n Limited by China Mobile Group.\n\n 4. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Shandong Mobile Communication Company\n Limited by China Mobile Group.\n\n 5. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Hebei Mobile Communication Company\n Limited by China Mobile Group.\n\n 6. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Liaoning Mobile Communication Company\n Limited by China Mobile Group.\n\n 7. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding the proposed\n increase of capital in Guangxi Mobile Communication Company\n\n\n\n\n 2\n 8\n\n Limited by China Mobile Group.\n\n 8. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Beijing Mobile\n Communications Company Limited into China Mobile (Hong Kong)\n Limited.\n\n 9. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Tianjin Mobile\n Communication Company Limited into China Mobile (Hong Kong)\n Limited.\n\n 10. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Shanghai Mobile\n Communication Company Limited into China Mobile (Hong Kong)\n Limited.\n\n 11. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Shandong Mobile\n Communication Company Limited into China Mobile (Hong Kong)\n Limited.\n\n 12. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Hebei Mobile Communication\n Company Limited into China Mobile (Hong Kong) Limited.\n\n 13. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Liaoning Mobile\n Communication Company Limited into China Mobile (Hong Kong)\n Limited.\n\n 14. Summary statement of the asset appraisal results issued by\n Zhongzi Asset Appraisal Company Limited regarding injection by\n China Mobile Group of the assets of Guangxi Mobile\n Communication Company Limited into China Mobile (Hong Kong)\n Limited.\n\n August 28, 2000\n\n (official seal of the Ministry of Finance)\n\n\n\n\nKey Terms: Assets, Appraisal, Verification, Opinion, Letter\n\nCopy to: China Mobile Group, China Mobile (Hong Kong) Limited\n\n\n\n\n 3\n 9\n\nEXHIBIT 3\n\n SUMMARY STATEMENT OF THE ASSETS APPRAISAL RESULTS\n ISSUED BY ZHONGZI ASSETS APPRAISAL COMPANY LIMITED\n REGARDING THE PROPOSED INCREASE OF CAPITAL IN SHANGHAI MOBILE COMMUNICATIONS\n COMPANY LIMITED BY CHINA MOBILE GROUP\n\nAppraisal base date: June 30, 2000 in RMB Ten Thousands\n<\/pre>\n
\n\n———————————————————————————————————-
\n ITEM BOOK VALUE BOOK VALUE APPRAISAL INCREASE\/ INCREASE\/
\n AFTER VALUE DECREASE DECREASE
\n ADJUSTMENT RATIO (%)
\n———————————————————————————————————-
\n
\nCurrent assets 261,994.00 265,757.85 263,757.52 -2,000.33 -0.75
\n———————————————————————————————————-
\nLong-term investments 3,511.34 3,511.34 7,197.58 3,686.24 104.98
\n———————————————————————————————————-
\nFixed assets 598,199.11 598,199.11 611,306.98 13,107.87 2.19
\n———————————————————————————————————-
\nIncluding:
\n Construction in progress 100,882.05 100,882.05 100,831.54 -50.51 -0.05
\n———————————————————————————————————-
\n Buildings 11,535.83 11,535.83 12,425.58 889.75 7.71
\n———————————————————————————————————-
\n Machinery 485,781.23 485,781.23 498,049.86 12,268.63 2.53
\n———————————————————————————————————-
\nIntangible assets 12,365.59 12,365.59 21,922.52 9,556.93 77.29
\n———————————————————————————————————-
\nIncluding:
\n Land use rights 12,365.59 12,365.59 21,922.52 9,556.93 77.29
\n———————————————————————————————————-
\nDeferred assets 4,876.13 4,876.13 4,876.13 0.00 0.00
\n———————————————————————————————————-
\n Total assets 880,946.17 884,710.02 909,060.73 24,350.71 2.75
\n———————————————————————————————————-
\nCurrent liabilities 148,626.42 152,390.27 152,390.27 0.00 0.00
\n———————————————————————————————————-
\nLong-term liabilities 153,803.69 153,803.69 153,803.69 0.00 0.00
\n———————————————————————————————————-
\n Total liabilities 302,430.11 306,193.96 306,193.96 0.00 0.00
\n———————————————————————————————————-
\n Net assets 578,516.06 578,516.06 602,866.77 24,350.71 4.21
\n———————————————————————————————————-
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