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EXHIBIT 10.39
CAPITAL CONTRIBUTION AGREEMENT
This Capital Contribution Agreement (the "Agreement") is executed by
the following three parties on August 30, 2000 in Shandong:
(1) CHINA MOBILE COMMUNICATIONS CORPORATION, a wholly state-owned limited
liability company duly established and in valid existence under the
laws of the People's Republic of China ("PRC"), with its legal address
at 53 A, Xibianmen Nei Da Jie, Xuanwu District, Beijing, PRC ("China
Mobile Group");
(2) SHANDONG COMMUNICATION SERVICE COMPANY, a wholly state-owned enterprise
duly established and in valid existence under the laws of PRC, with its
legal address at 77, Jing San Lu, Jinan, PRC (the "Service Company");
and
(3) SHANDONG MOBILE COMMUNICATION COMPANY LIMITED, a limited liability
company duly established and in valid existence under the laws of PRC,
with its legal address at 84, Da Wei Er Lu, Shi Zhong District, Jinan,
PRC ("Shandong Mobile").
WHEREAS:
1. China Mobile Group and the Service Company have jointly established
Shandong Mobile, and hold 80% and 20% of its equity interest,
respectively;
2. Pursuant to the "Notice of Guidance Opinions on Establishing China
Mobile Group" (Xin Bu Zheng [1999] No. 360) issued by the Ministry of
Information Industry, the communication businesses and related assets
in Shandong shall be transferred to and managed by China Mobile Group;
3. China Mobile Group has decided to inject and contribute the
communication businesses and related assets in Shandong to Shandong
Mobile;
4. The Board of Shandong Mobile agrees by resolution to China Mobile
Group's injection and contribution of the communication businesses and
related assets in Shandong to Shandong Mobile;
THEREFORE, the three Parties, namely China Mobile Group, the Service
Company and Shandong Mobile, have reached the following agreement:
ARTICLE ONE DEFINITIONS
1.1 Unless the context indicates otherwise, the following terms shall have the
meanings as defined below:
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"ASSET APPRAISAL REPORT" shall mean the asset appraisal report, with
the Base Date being June 30, 2000, prepared by Zhongzi Asset Appraisal
Company Limited and approved by the Ministry of Finance with regard to
the assets and liabilities of communication businesses of Shandong
Mobile (see Appendix A of the Agreement).
"RELATED INTERESTS AND ASSETS" shall mean all rights, interests and
assets included in the Asset Appraisal Report and the contracts,
agreements, certificates, business operation data, files and documents
in connection with such rights, interests and assets, as well as any
profits and benefits from such rights, interest and assets accrued
thereon after June 30, 2000.
"RELATED LIABILITIES" shall mean all liabilities set out in the
Liability List in Appendix A of the Agreement and the contracts,
agreements, certificates, business operation data, files and documents
in connection with such liabilities.
"RELATED PERSONNEL" shall mean 4,223 employees engaged in mobile
communication services and employed by the Shandong Mobile
Communication Company (the predecessor of the Service Company).
"RELATED SERVICES" shall mean the mobile communication businesses
operated by the Shandong Mobile Communication Company (the predecessor
of the Service Company) in Shandong and all the telecommunication
operating licenses, spectrum use permits, telecommunication networks
number resources use approvals, mobile communication base station
licenses and all other related authorizations held by it.
"EFFECTIVE DATE" shall mean the date when the Agreement is executed.
1.2 Unless the Agreement specifies otherwise, the articles and schedules
mentioned herein shall mean the articles and schedules of the
Agreement. All schedules constitute an integral part of the Agreement.
ARTICLE TWO INJECTION OF ASSETS AND SERVICES
2.1 China Mobile Group shall, on the Effective Date, inject all the Related
Interests and Asset, the Related Liabilities and the Related Services
into Shandong Mobile.
2.2 Upon the Effective Date, Shandong Mobile shall beneficially own the
Related Interest and Assets and the Related Services, clear and free of
any encumbrance, pledge or any other third-party interests, and shall
assume the Related Liabilities.
2.3 Pursuant to the Asset Appraisal Report, the total value of such Related
Interests and Assets, the Related Liabilities and the Related Services
is RMB6,331,851,300.
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2.4 The Base Date of the Asset Appraisal Report is June 30, 2000. During
the period from the Base Date to the Effective Date, Shandong Mobile
shall enjoy and assume any and all assets, interests, rights and
liabilities arising from the Related Interests and Assets, the Related
Liabilities and Related Services.
2.5 The Service Company should notify the other party to any relevant
contract regarding the transfer of the Related Interest and Asset, the
Related Liabilities and the Related Businesses, and obtain such party's
consent to such transfer.
ARTICLE THREE EQUITY INTERESTS OF PARTIES AFTER CAPITAL CONTRIBUTION
3.1 After the capital contribution, China Mobile Group and the Service
Company will own 99.97% and 0.03% of the equity interests,
respectively, in Shandong Mobile.
ARTICLE FOUR RELATED PERSONNEL
4.1 From the Effective Date, the Related Personnel shall be employed by
Shandong Mobile.
ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
5.1 Each Party hereto warrants that it has all requisite authority, power
and ability to execute and perform the Agreement. The Agreement, upon
execution, will constitute legal, valid and binding obligations of each
of China Mobile Group, the Service Company and Shandong Mobile.
5.2 Each of China Mobile Group and the Service Company hereby represents
and warrants to Shandong Mobile that, as of the Effective Date,
Shandong Mobile will own the Related Interests and Assets and the
Related Services, clear and free of any encumbrance, pledge or any
other third-party interests, and will assume the Related Liabilities.
ARTICLE SIX SETTLEMENT OF DISPUTES
6.1 Any dispute arising from or in connection with the interpretation or
performance of this Agreement shall be settled by the Parties through
friendly negotiations conducted among representatives appointed by the
Parties for this purpose. In the case that no resolution is reached
through consultations within 90 days after the occurrence of any
dispute, any Party may bring an action to a competent people's court
for its judgment.
ARTICLE SEVEN NOTICES
7.1 Any notice to be given under the Agreement shall be made in writing and
sent by mail, telex, telegraph or facsimile to the other Party's
address set out in the
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front page of the Agreement or to any other address as such Party may
designate in writing from time to time.
7.2 Any notice shall be deemed to have been received at the time as
follows:
if delivered in person, at the time of delivery;
if delivered by mail, on the date of the receipt;
if delivered by telex, at the time of taking back the receipt;
if transmitted by facsimile, upon delivery.
ARTICLE EIGHT GOVERNING LAW
8.1 The Agreement shall be governed by and interpreted in accordance with
the laws of the PRC.
ARTICLE NINE LANGUAGE
9.1 The Agreement is executed in Chinese.
ARTICLE TEN EFFECTIVE DATE
10.1 The Agreement shall come into effect upon the date when it is executed
by the authorized representatives of the Parties.
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PARTY A: CHINA MOBILE COMMUNICATIONS CORPORATION
By: s/ Xue Taohai
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Authorized representative
PARTY B: SHANDONG COMMUNICATION SERVICE COMPANY
By: s/ Zhang Xuan
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Authorized representative
PARTY C: SHANDONG MOBILE COMMUNICATION COMPANY LIMITED
By: s/ Li Huanbin
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Authorized representative
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APPENDIX A
MINISTRY OF FINANCE DOCUMENT
Cai Qi [2000] No. 269
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LETTER REGARDING OPINIONS ON VERIFICATION OF ASSET APPRAISAL OF INCREASE OF
CAPITAL IN MOBILE COMMUNICATION COMPANIES LIMITED IN BEIJING AND OTHER SIX
MUNICIPALITIES, PROVINCES AND AUTONOMOUS REGION AND OF CAPITAL CONTRIBUTION
IN CHINA MOBILE (HONG KONG) LIMITED BY CHINA MOBILE GROUP
Ministry of Information Industry,
We are in receipt from your Ministry of the "Application for
Confirmation of Asset Appraisal Results of Increase of Capital in Mobile
Communications Companies Limited in Beijing and Other Six Municipalities,
Provinces and Autonomous Region and of Capital Contribution in China Mobile
(Hong Kong) Limited by China Mobile Group" (Xin Bu Qing [2000] No. 780) and the
Asset Appraisal Reports (Zhong Zi Ping Bao Zi [2000] No. 004-017, 14 such
reports in all) prepared by Zhongzi Asset Appraisal Company Limited. We hereby
reply as follows:
1. In connection with China Mobile Group's intention to increase its
investment in the Mobile Communications Companies Limited of seven
provinces/autonomous region/municipalities, including Beijing, Tianjin,
Shanghai, Shandong, Hebei, Liaoning and Guangxi, and to inject all of
its increased interests in the above Mobile Communications Companies
Limited in such seven provinces/autonomous region/municipalities into
China Mobile (Hong Kong) Limited, we have found, following our
verification, that the project proposal regarding asset appraisal of
the above increase of investment in domestic companies and overseas
investment by China Mobile Group has been approved, that Zhongzi Asset
Appraisal Company Limited, the appraisal institution undertaking asset
appraisal in this project, possesses the asset appraisal credentials
duly granted by the Ministry of Finance, and that the relevant
appraisal personnel signing all the asset appraisal reports are
certified for asset appraisal.
2. The replacement cost method has been adopted as the major method of
such appraisals.
3. The base date of such appraisals is June 30, 2000. The appraisal
results in the appraisal reports are valid only in respect of the
assets appraised in this project, the increase of investment by China
Mobile Group in the Mobile Communications Companies Limited in the
above seven provinces/autonomous region/cities, and the injection by
China Mobile Group injects of its entire interests of the above Mobile
Communications Companies
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Limited into China Mobile (Hong Kong) following such increase of
investment. Such result shall become invalid as of June 30, 2001.
4. Users of such appraisal reports shall focus their attention on the
special items disclosed therein, the items adjusted as of the base date
and the legal validity of the appraisal reports.
5. Legal liabilities of such appraisal reports shall be borne by the
appraisal institution engaged to undertake such appraisals and the
registered asset appraisers signing such appraisal reports, and shall
not be borne by the appraisal administrative department by virtue of
this verification.
EXHIBITS:
1. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Beijing Mobile Communication Company
Limited by China Mobile Group.
2. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Tianjin Mobile Communication Company
Limited by China Mobile Group.
3. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Shanghai Mobile Communication Company
Limited by China Mobile Group.
4. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Shandong Mobile Communication Company
Limited by China Mobile Group.
5. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Hebei Mobile Communication Company
Limited by China Mobile Group.
6. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Liaoning Mobile Communication Company
Limited by China Mobile Group.
7. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding the proposed
increase of capital in Guangxi Mobile Communication Company
Limited by China Mobile Group.
8. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China
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Mobile Group of the assets of Beijing Mobile Communication
Company Limited into China Mobile (Hong Kong) Limited.
9. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Tianjin Mobile
Communication Company Limited into China Mobile (Hong Kong)
Limited.
10. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Shanghai Mobile
Communication Company Limited into China Mobile (Hong Kong)
Limited.
11. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Shandong Mobile
Communication Company Limited into China Mobile (Hong Kong)
Limited.
12. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Hebei Mobile Communication
Company Limited into China Mobile (Hong Kong) Limited.
13. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Liaoning Mobile
Communication Company Limited into China Mobile (Hong Kong)
Limited.
14. Summary statement of the asset appraisal results issued by
Zhongzi Asset Appraisal Company Limited regarding injection by
China Mobile Group of the assets of Guangxi Mobile
Communication Company Limited into China Mobile (Hong Kong)
Limited.
August 28, 2000
(official seal of the Ministry of Finance)
Key Terms: Assets, Appraisal, Verification, Opinion, Letter
Copy to: China Mobile Group, China Mobile (Hong Kong) Limited
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EXHIBIT 4
SUMMARY STATEMENT OF THE ASSETS APPRAISAL RESULTS
ISSUED BY ZHONGZI ASSETS APPRAISAL COMPANY LIMITED
REGARDING THE PROPOSED INCREASE OF CAPITAL IN SHANDONG MOBILE COMMUNICATIONS
COMPANY LIMITED BY CHINA MOBILE GROUP
in RMB
Appraisal base date: June 30, 2000 Ten Thousands
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INCREASE/
BOOK VALUE APPRAISAL INCREASE/ DECREASE
ITEM BOOK VALUE AFTER ADJUSTMENT VALUE DECREASE RATIO (%)
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Current assets 275,950.88 275,943.22 273,962.49 -1,980.73 -0.72
Fixed assets 846,712.48 841,754.79 859,592.92 17,838.13 2.12
Including:
Construction 64,561.76 64,561.76 57,863.92 -6,597.84 -10.37
in progress
Buildings 47,043.43 42,085.74 53,263.62 11,177.88 26.56
Machinery 735,087.23 735,087.23 748,465.37 13,378.14 1.82
Intangible assets 0.00 4,965.35 31,830.58 26,865.23 --
Including:
Land use rights 0.00 4,965.35 31,830.58 26,865.23 --
Other assets 0.15 0.15 0.15 0.00 0.00
Total assets 1,122,663.51 1,122,663.51 1,165,386.14 42,722.63 3.81
Current liabilities 282,031.98 282,031.98 282,695.21 663.23 0.24
Long-term liabilities 249,504.86 249,504.86 249,505.80 0.94 0.00
Total Liabilities 531,536.84 531,536.84 532,201.01 664.17 0.12
Net assets 591,126.67 591,126.67 633,185.13 42,058.46 7.11