14. The Guarantors hereby represent and warrant that:
a) the Guarantors are established and validly existing under the Laws of China, with its registered address as above;
b) the Guarantors have full legal rights, powers and authority to conduct their existing operations, possess their assets, assume this Guarantee and other obligations stipulated hereunder, execute and deliver this Guarantee and to perform and comply with the terms and conditions hereunder;
c) the Guarantors have taken all appropriate and necessary corporate and legal actions to authorize the execution and delivery of this Guarantee and to perform and abide by the stipulations and terms hereunder;
d) except for the relevant documents already obtained and submitted to the Agency Bank and the Lending Banks, the execution, delivery, effectiveness, performance, enforcement, the validity as evidence in legal proceedings of this Guarantee and the Guarantors' obligations hereunder do not require further consent from any other governmental departments or agency or any other shareholders or creditors, or notification thereto, or registration or filing therewith, or other actions to be taken;
e) This Guarantee constitutes the legal and valid obligations binding on the Guarantors and can be enforced in accordance with its stipulations. The execution, delivery, performance of terms and conditions hereunder, the payment of all the due and payable amount in the currency stipulated hereunder on the date indicated herein do not (1) infringe or violate any stipulations of any applicable laws of China and other government regulations (with legal validity or not); (2) violate any government guidelines and policies (with no legal validity) applicable to the Guarantors; (3) conflict with the business license of the Guarantors; (4) conflict with any agreements, debentures, mortgages or other documents other than this Guarantee to which the Guarantor is a Party or the Guarantor or its assets is bound, and will not bring about consequences of violation of any of the stipulations thereof nor create any mortgage, lien, pledge, security interests or preferential arrangement; (5) constitute Event of Default under any agreement nor constitute Event of Default due to delivery of Notice or elapse of time or both;
f) under any agreement to which the Guarantor is a Party or the Guarantor or its assets is bound, no Event of Default has occurred on the part of the Guarantor which affects the Guarantor's ability to pay the full amount payable hereunder;
g) this Guarantee constitutes the Guarantors' direct, unconditional and comprehensive obligations. With respect to the priority order of the Guarantor's payment of other loans, liabilities, guarantee or obligations and all other aspect the Guarantors' obligations hereunder at least have and will have the priority equal to the guaranteed loans, liabilities or obligations and other guarantee;
h) there are no material or possible debts that have potential adverse impact on the Guarantor's performance of its guarantee obligations hereunder which has not been disclosed to the Agency Bank or the Lending Banks by the Guarantor;
i) there are no pending or threatening lawsuit, arbitration or other proceedings against the Guarantors with the tribunal of arbitration, the court, governmental agencies or administrative agencies which may affect the financial status or operation of the Guarantors, or impair the Guarantors' ability to pay all or part of the payable amount in accordance with this Guarantee, or affect the validity or enforcement of this Guarantee in anyway;
j) the Guarantors undertake their business and operations in accordance with all applicable laws, rules and regulations of China.
15. The Guarantors further warrant that:
a) the Guarantors shall maintain their accounting system in accordance with the accounting principles stipulated under the laws of China;
b) the Guarantors shall deliver an audited annual financial statement to the Agency Bank within 120 days after every fiscal year and deliver an unaudited semi-annual financial statement to the Agency Bank within 90 days after the first half of every fiscal year;
c) after the execution of this Guarantee, the Guarantors respectively or along with the Borrower shall appoint one of the top six international accounting firms to prepare semi-annual consolidated financial statements of the Guarantors in accordance with the accounting standards of China and deliver them to the Lending Banks through the Agency Bank. In the event that the parent company of the Guarantors, namely China Mobile (Hong Kong) Limited shall arrange and prepare audited semi-annual financial statements in accordance with laws of Hong Kong rules of Hong Kong Stock Exchange, the semi-annual consolidated financial statements of the Guarantors hereunder shall be audited financial statements; otherwise, the international accounting firm ranked among the top six international accounting firms shall prepare unaudited semi-annual consolidated financial statements of the Guarantors and provide the Agency Bank with a letter, indicating that the unaudited semi-annual consolidated financial statements of the Guarantors prepared by the firm (1) is in accordance with the accounting standards of China; (2) the preparation method is reasonable and correct. Such semi-annual consolidated financial statements shall at the same time be attached with a letter produced by the Guarantors indicating the truthfulness of the data presented in the financial statements. Expense incurred in the preparation of the financial statements shall be borne by the Guarantors and/or the Borrower;
d) the Guarantors respectively or along with the Borrower shall appoint one of the top six international accounting firms to prepare semi-annual consolidated financial statements for the six Guarantors hereunder and deliver them, through the Agency Bank, to the Lending Banks. The Guarantors and/or Borrower shall bear the relevant fees and charges;
e) the Guarantors shall notify the Agency Bank immediately with regard to the following issues:
i) lawsuit, arbitration or claims in any other forms regarding any creditor's claim with the total amount exceeding Renminbi three hundred million (RMB 300,000,000) or with the equivalent amount in other currencies;
ii) merger with other companies or business institutions;
iii) sales, transfer or other means of disposal of assets or business of more than Renminbi one billion (RMB 1,000,000,000);
f) the Guarantors shall abide by applicable laws, rules and regulation,authorities or agreements, perform relevant obligations and pay any due and payable tax;
g) in the event that the aggregate balance of debt or contingent liabilities of the Guarantors is less than one hundred and twenty percent (120%) of the total shareholders' equity, the Guarantors shall notify the Agency Bank on a timely basis of their material or possible debts incurred, assumed or newly-established with the amount of a single item exceeding Renminbi one billion (RMB1,000,000,000) or debt with equivalent value and immediately provide the Agency Bank with text of the agreement regarding the material debt or contingent liabilities; in the event that the aggregated balance of the debt or contingent liabilities of the Guarantors exceeds one hundred and twenty percent (120%) of the total shareholders' equity, the Guarantors shall not incur, assume or establish any additional debt or contingent liabilities without the Lending Banks' prior consent. To this end, the Guarantors shall notify the Agency Bank in writing of the event that the Guarantors may incur, assume or establish additional debts or contingent liabilities with attachment of a draft of the agreement regarding the relevant debts and contingent liabilities. The Agency Bank shall notify the Guarantors within ten (10) Bank Business Days after receipt of the above written Notice if the Agency Bank agrees upon the above debts or contingent liabilities. The Agency Bank's failure to notify the Guarantors within the above time limit shall be deemed as consent;
h) the Guarantors will not take any action or procedure for the purpose of dissolution, liquidation or termination of the business without the Lending Banks' prior consent;
i) No other debt or contingent liabilities with higher rank of priority over the debts and contingent liabilities hereunder in respect of the order of payment will be created.
16. The validity, presumption and interpretation of this Guarantee and all the rights, obligations and liabilities arising out of this Guarantee shall be governed by and interpreted according to the laws of China. Any legal actions or proceedings taken against the Guarantors or any of their assets in connection with this Guarantee shall be submitted to the competent tribunal of economic adjudication of the people's court in Beijing.
17. In the event that any payment under this Guarantee is required to be made on a Non-Bank Business Day, such payment shall be postponed to the next Bank Business Day or any other date provided under the Loan Agreement.
18. The Term of the Guarantee herein shall begin from the date of the execution of the Syndicated Loan Agreement and end on the first anniversary of the expiry of the Term of the Loan stipulated under the Syndicated Loan Agreement; in the event that the loan is extended, the term of the Guarantee shall end on the first anniversary of the expiry of renewed term of the Loan.
On this basis, the Guarantors have executed this Guarantee in favor of the Agency Bank and the Lending Banks, which shall come into effect upon Execution of the Letter of Guarantee by the Guarantors and the stamp of their official seals.
GUARANTOR SIGNATURE PAGE Re: Provision to the Lending Banks of irrevocable and unconditional guarantee with joint liabilities regarding the Syndicated Loan Agreement on RMB 7,500,000,000 Loan executed on the date of October 7, 2000 between China Mobile (Shenzhen) Limited and Construction Bank of China, Bank of China and other Lending Banks listed in Schedule One of the Syndicated Loan Agreement.
SCHEDULE ELEVEN FORM OF LEGAL OPINION
ISSUED BY LAWYERS OF THE BORROWER AND GUARANTORS
附录十一 借款人和担保人律师出具的法律意见格式
LEGAL OPINION
TO: CONSTRUCTION BANK OF CHINA
BANK OF CHINA
STATE DEVELOPMENT BANK
AGRICULTURE BANK OF CHINA
INDUSTRIAL AND COMMERCIAL BANK OF CHINA
BANK OF COMMUNICATIONS
HONG KONG & SHANGHAI BANKING CORPORATION LTD., SHENZHEN BRANCH CHINA MERCHANTS BANK (THE "LENDING BANKS")
To Whom It May Concern:
RE: ISSUES CONCERNING ARRANGEMENT OF
SYNDICATED LOAN OF RENMINBI 7,500,000,000
AND ARRANGEMENT OF
SYNDICATED LOAN OF RENMINBI 5,000,000,000
We are lawyers with the Commerce & Finance Law Firm (the "Law Firm"),which has been licensed by Bureau of Justice of Beijing Municipality to practicewithin the territory of the People's Republic of China ("China"). The Law Firmis qualified to issue this Opinion.
Entrusted by China Mobile (Shenzhen) Limited (the "Borrower") and Guangdong Mobile Communication Company Limited, Zhejiang Mobile Communication Company Limited, Jiangsu Mobile Communication Company Limited, Fujian Mobile Communication Company Limited, Henan Mobile Communication Company Limited and Hainan Mobile Communication Company Limited (the " Guarantors"), the Law Firm, being the legal council of the "Borrower" and the "Guarantors" in China, issues this Legal Opinion on relevant issues regarding the captioned Syndicated Loan Arrangement.
The Lending Banks, the Borrower and the Guarantors have executed a Syndicated Loan Agreement on Renminbi 5,000,000,000 Loan and a Syndicated Loan Agreement on Renminbi 7,500,000,000 Loan on October 7, 2000, and the Guarantors executed Letters of Guarantee in favor of the Lending Banks.
Unless otherwise indicated, terms used in this Opinion shall have the same meaning as defined under the Syndicated Loan Agreement.
In order to issue this Opinion, we have reviewed all the originals or copies of the documents relevant to the Borrower and the Lending Banks (see legal documents and other documents that we deem as necessary for the issuance of this Opinion in Schedule One attached to this Opinion). The originals or copies of these documents have been provided by the Borrower and the Lending Banks.
The Statement, analysis and conclusion hereunder are made on the following basis:
1. State and local laws and regulations and government policies of China;
2. Our practice and experience in similar projects;
3. The originals, photocopies or facsimiles of the above legal documents regarding the captioned issues.
When reviewing the originals, photocopies or facsimiles of the above documents, we assume the following:
1. All the handwriting, seals and stamps on the original copies are genuine and valid, and all the documents provided to us as photocopies are the same as the originals;
2. All the presentations of the facts in the documents are true and complete in all respects;
On the basis of the above statement and assumptions, the Law Firm arrives at the following legal opinions:
1. The Borrower and the Guarantors are limited liability companies established and validly existing under the laws of China and are qualified to operate in the territory of China. The Articles of Association of each of the Borrower and the Guarantors are in accordance with relevant stipulations under the laws of China and are legal and valid;
2. The registered capital of the Borrower and the Guarantors have been fully paid up by their investors;
3. The Borrower and the Guarantors are vested sufficient power, authority and legal rights, and have obtained the consent, approval, authorization order and registration from all the governmental agencies to own their present assets and to operate the business which they are operating at present;
4. The Borrower and the Guarantors have obtained all the legal and valid certificates and licenses relevant to their business operations, including but not limited to the certificate of approval, business license, tax registration certificate and foreign exchange registration license;
5. Both the Borrower and the Guarantors have taken all necessary legal person's and/or other actions, including necessary approvals by their boards of directors and general meetings of shareholders, to (1) execute and deliver loan documents, (2) perform their obligations under the loan documents;
6. Purpose of the loan under the Loan Agreement have been approved by all relevant governmental agencies and have obtained consent from China Mobile Communications Corporation ("CMCC"), China Mobile (Hong Kong) Limited,China Mobile BVI and the Borrower, including necessary approvals by the boards of directors and general meetings of shareholders. Purpose of the loan under the Loan Agreement is legal and valid;
7. The Acquisition Transaction has obtained appropriate approval from relevant governmental agencies and have obtained consent from CMCC, China Mobile (Hong Kong) Limited and China Mobile BVI, including necessary approvals by the boards of directors and general meetings of shareholders;
8. The Loan Agreement shall be binding on the Borrower and the Guarantors upon signing with official seals affixed and may be enforced upon the Borrower and the Guarantors in accordance with its stipulations;
9. The Borrower and the Guarantors' execution and delivery of the Loan Agreement and/or Letter of Guarantee and other loan documents, and the performance of their obligations under the Loan Agreement and/or Letter of Guarantee and other loan documents do not (1) violate or infringe any stipulation under applicable state and local laws and regulations of China; (2) violate or infringe applicable policies of the Chinese government; (3) conflict with their business licenses in the case of the Guarantors; (4) conflict with any agreement, contract or other document to which the Borrower and the Guarantors are one Party or they or their assets are bound, and will not bring about consequences of the violation of any of their stipulations or any mortgage, lien, pledge, security interests or preferential arrangements created thereunder; (5) constitute Event of Default under any agreement or constitute Event of Default due to delivery of Notice or lapse of time or both;
10. The Borrower and the Guarantors' execution and delivery of the Loan Agreement and/or Letter of Guarantee and other loan documents, and the performance of their obligations under these loan documents do not require any other consent, approval, license or authority from governmental agencies, or consent or approval from any other third party (including their investors);
11. In accordance with Interim Provisions Regarding Syndicated Loan promulgated by People's Bank of China, after the execution of the Syndicated Loan Agreement, the Agency Bank shall deliver a copy of the Syndicated Loan Agreement to PBOC for file. Other than this, loan documents are not required to be delivered to any governmental agency, court or other agency for registration or the record with a purpose to make the Loan Agreement valid and enforceable;
12. No security interest in any form that may exert a substantial adverse effect on the borrowing, utilization and/or repayment of the Loan has been created on any asset and/or income of the Borrower;
13. The Guarantors are vested the power to provide guarantee to the Lending Banks. The Guarantors' obligations, under the Guarantee, constitute their direct, unconditional, several and joint obligations to the Lending Banks and shall at least have the same priority as any of the Guarantors' existing and future secured debt and other contingent debts;
14. The Borrower and the Guarantors have all established and implemented an accounting system in accordance with stipulations under all applicable laws and regulations and the Generally Accepted Accounting Principle of China and have been maintaining the continuity of such an accounting system; all the assets, rights and interests of the Borrower and the Guarantors or their business operations have been recorded completely on a timely basis in their respective financial statements; taxes regarding the Borrower's and the Guarantors' ownership of their assets and business operations have been declared and fully paid completely and on a timely basis;
15. Except for stamp tax, the Borrower and the Guarantors have no withholding tax, income tax, corporate tax or other taxes or expenses Levied on any payment under the Loan Agreement or the execution, delivery, performance or enforcement of the Loan Agreement or any other proposed documents; in accordance with stipulations under the existing Interim Regulations of the People's Republic of China on Stamp Tax, the Borrower, being one Party to the Agreement, and all the Lending Banks being the other Party to the Agreement shall pay a stamp tax at the rate of 0.005 percent to the tax authorities of China on the amount indicated under the Loan Agreement regarding the execution and performance of the Loan Agreement. Such stamp tax shall be paid immediately after the execution of the Loan Agreement with the official seals affixed to the Agreement;
16. Although the State Administration for Industry and Commerce has promulgated Interim Provisions Concerning the Proportion between Registered Capital and Total Investment of Chinese-foreign Equity Joint Ventures and the supplementary provisions thereunder, all of which are equally applicable to the Borrower, according to the State Council's reply Regarding the Acquisition Transactions, if the Loan Arrangement by the Borrower under the Loan Agreement does not violate stipulations under the relevant existing and valid laws of China, the loan arrangement made according to the Loan Agreement shall be legal, valid and enforceable;
17. Unless otherwise stipulated under the Loan Agreement, consent, approval, authorization, order, registration and terms required by the laws of China in relation to the Loan Arrangement covered in the Loan Agreement have all been made or obtained in writing;
18. Under any agreement to which the Borrower is a Party and the Guarantors the other, or to which the Borrower and/or the Guarantors or their assets are bound, the Borrower and/or the Guarantors have not committed any Event of Default that would impair their ability of performing the obligations under the Loan Agreement;
19. As of the date hereof, there has been no pending lawsuit, arbitration by arbitration tribunal or other potential material dispute against the Borrower and/or the Guarantors that may constitute substantial adverse effect upon the borrowing, utilization and/or repayment of the Loan by javascript:void the Borrower, or upon the financial condition or operation of the Guarantors, or upon the Guarantors' performance of the guarantee obligations under the Letter of Guarantee; nor any pending legal or governmental proceedings against the validity and legality of the Loan or any threat that would trigger such procedures;
20. The Borrower and the Guarantors shall enjoy no sovereign immunity in the course of the execution, delivery, performance of the loan documents such as the Loan Agreement and/or the Letter of Guarantee, and shall not demand such rights within the terms of such loan documents such as the Loan Agreement and the Letter of Guarantee;
21. The Opinion shall be of same validity upon its execution and the date of the withdrawal by the Borrower. The Opinion herein is issued solely for the purpose of the captionedS yndicated Loan Arrangement for the benefit of the Lending Banks. The Opinion can be disclosed to the Lending Banks and the lawyers thereof and may be relied upon by the Lending Banks and lawyers thereof for the above purpose only. The Opinion shall not be disclosed to any other person or be used for other purposes without prior consent of the Law Firm.
COMMERCE & FINANCE LAW FIRM
SCHEDULE TWELVE FORM OF LEGAL OPINION ISSUED BY LAWYER OF THE LENDING BANKS
附录十二 贷款银行律师出具的法律意见格式
LEGAL OPINION
TO: CONSTRUCTION BANK OF CHINA
BANK OF CHINA
STATE DEVELOPMENT BANK
AGRICULTURE BANK OF CHINA
INDUSTRIAL AND COMMERCIAL BANK OF CHINA
BANK OF COMMUNICATIONS
HONG KONG & SHANGHAI BANKING CORPORATION LTD., SHENZHEN
BRANCH CHINA MERCHANTS BANK
(THE "LENDING BANKS")
To Whom It May Concern:
RE: ISSUES CONCERNING ARRANGEMENT OF
SYNDICATED LOAN AGREEMENT OF RENMINBI 7,500,000,000
AND ARRANGEMENT OF
SYNDICATED LOAN OF RENMINBI 5,000,000,000
We are lawyers with the Jingtian & Gongcheng Law Firm (the "Law Firm"), which has been licensed by Bureau of Justice of Beijing Municipality to practice within the territory of the People's Republic of China ("China"). The Law Firm is qualified to issue this Opinion.
Entrusted by Lending Banks, the Law Firm issued the Legal Opinion herein regarding relevant issues on the captioned Syndicated Loan Arrangement, with China Mobile (Shenzhen) Limited (the "Borrower") as the Borrower and Guangdong Mobile Communication Company Limited, Zhejiang Mobile Communication Company Limited, Jiangsu Mobile Communication Company Limited, Fujian Mobile Communication Company Limited, Henan Mobile Communication Company Limited and Hainan Mobile Communication Company Limited (the "Guarantors") as the Guarantors.
On October 7, 2000, the Lending Banks, the Borrower and the Guarantors executed a Syndicated Loan Agreement on Renminbi 5,000,000,000 Loan and a Syndicated Loan Agreement on Renminbi 7,500,000,000 Loan and the guarantors executed Letters of Guarantee in favor of the Lending Banks under the Syndicated Loan.
Unless otherwise indicated, terms used in this Opinion shall have the same meaning as defined under the Syndicated Loan Agreement.
In order to issue this Opinion, we have reviewed all the originals or copies of the documents relevant to the Borrower and the Lending Banks (see legal documents and other documents that we deem as necessary for the issuance of this Opinion in Schedule One attached to this Opinion). The originals or copies of these documents have been provided by the Borrower and the Lending Banks.
The Statement, analysis and conclusion hereunder are made on the following basis:
1. State and local laws and regulations and government policies of China;
2. Our practice and experience in similar projects;
3. The originals, photocopies or facsimiles of the above legal documents regarding the captioned issues.
When reviewing the originals, photocopies or facsimiles of the above documents, we assume the following:
1. All the handwriting, seals and stamps on the original copies are genuine and valid, and all the documents provided to us as photocopies are the same as the originals;
2. All the presentations of the facts in the documents are true and complete in all respects;
On the basis of the above statement and assumptions, the Law Firm arrives at the following legal opinions:
1. The Borrower and the Guarantors are limited liability companies established and validly existing under the laws of China and are qualified to operate in the territory of China. The Articles of Association of each of the Borrower and the Guarantors are in accordance with relevant stipulations under the laws of China and are legal and valid;
2. The registered capital of the Borrower and the Guarantors have been fully paid up by their investors;
3. The Borrower and the Guarantors are vested sufficient power, authority and legal rights, and have obtained the consent, approval, authorization order and registration from all the governmental agencies to own their present assets and to operate the business which they are operating at present;
4. The Borrower and the Guarantors have obtained all the legal and valid certificates and licenses relevant to their business operations, including but not limited to the certificate of approval, business license, tax registration certificate and foreign exchange registration license;
5. Both the Borrower and the Guarantors have taken all necessary legal person's and/or other actions, including necessary approvals by their boards of directors and general meetings of shareholders, to (1) execute and deliver loan documents, (2) perform their obligations under the loan documents;
6. Purpose of the loan under the Loan Agreement have been approved by all relevant governmental agencies and have obtained consent from China Mobile Communications Corporation ("CMCC"), China Mobile (Hong Kong) Limited, China Mobile BVI and the Borrower, including necessary approvals by the boards of directors and general meetings of shareholders. Purpose of the loan under the Loan Agreement is legal and valid;
7. The Acquisition Transaction has obtained appropriate approval from relevant governmental agencies and have obtained consent from CMCC, China Mobile (Hong Kong) Limited and China Mobile BVI, including necessary approvals by the boards of directors and general meetings of shareholders;
8. The Loan Agreement shall be binding on the Borrower and the Guarantors upon signing with official seals affixed and may be enforced upon the Borrower and the Guarantors in accordance with its stipulations;
9. The Borrower and the Guarantors' execution and delivery of the Loan Agreement and/or Letter of Guarantee and other loan documents, and the performance of their obligations under the Loan Agreement and/or Letter of Guarantee and other loan documents do not (1) violate or infringe any stipulation under applicable state and local laws and regulations of China; (2) violate or infringe applicable policies of the Chinese government; (3) conflict with their business licenses in the case of the Guarantors; (4) conflict with any agreement, contract or other document to which the Borrower and the Guarantors are one Party or they or their assets are bound, and will not bring about consequences of the violation of any of their stipulations or any mortgage, lien, pledge, security interests or preferential arrangements created thereunder; (5) constitute Event of Default under any agreement or constitute Event of Default due to delivery of Notice or lapse of time or both;
10. The Borrower and the Guarantors' execution and delivery of the Loan Agreement and/or Letter of Guarantee and other loan documents, and the performance of their obligations under these loan documents do not require any other consent, approval, license or authority from governmental agencies, or consent or approval from any other third party (including their investors);
11. In accordance with Interim Provisions Regarding Syndicated Loan promulgated by People's Bank of China, after the execution of the Syndicated Loan Agreement, the Agency Bank shall deliver a copy of the Syndicated Loan Agreement to PBOC for file, and the filing has been completed. Other than this, loan documents are not required to be delivered to any governmental agency, court or other agency for registration or the record with a purpose to make the Loan Agreement valid and enforceable;
12. No security interest in any form that may exert a substantial adverse effect on the borrowing, utilization and/or repayment of the Loan has been created on any asset and/or income of the Borrower;
13. The Guarantors are vested the power to provide guarantee to the Lending Banks. The Guarantors' obligations, under the Guarantee, constitute their direct, unconditional, several and joint obligations to the Lending Banks and shall at least have the same priority as any of the Guarantors' existing and future secured debt and other contingent debts;
14. The Borrower and the Guarantors have all established and implemented an accounting system in accordance with stipulations under all applicable laws and regulations and the Generally Accepted Accounting Principle of China and have been maintaining the continuity of such an accounting system; all the assets, rights and interests of the Borrower and the Guarantors or their business operations have been recorded completely on a timely basis in their respective financial statements; taxes regarding the Borrower's and the Guarantors' ownership of their assets and business operations have been declared and fully paid completely and on a timely basis;
15. Except for stamp tax, the Borrower and the Guarantors have no withholding tax, income tax, corporate tax or other taxes or expenses Levied on any payment under the Loan Agreement or the execution, delivery, performance or enforcement of the Loan Agreement or any other proposed documents; in accordance with stipulations under the existing Interim Regulations of the People's Republic of China on Stamp Tax, the Borrower, being one Party to the Agreement, and all the Lending Banks being the other Party to the Agreement shall pay a stamp tax at the rate of 0.005 percent to the tax authorities of China on the amount indicated under the Loan Agreement regarding the execution and performance of the Loan Agreement. Such stamp tax shall be paid immediately after the execution of the Loan Agreement with the official seals affixed to the Agreement;
16. Although the State Administration for Industry and Commerce has promulgated Interim Provisions Concerning the Proportion between Registered Capital and Total Investment of Chinese-foreign Equity Joint Ventures and the supplementary provisions thereunder, all of which are equally applicable to the Borrower, according to the State Council's reply Regarding the Acquisition Transactions, if the Loan Arrangement by the Borrower under the Loan Agreement does not violate stipulations under the relevant existing and valid laws of China, the loan arrangement made according to the Loan Agreement shall be legal, valid and enforceable;
17. Unless otherwise stipulated under the Loan Agreement, consent, approval, authorization, order, registration and terms required by the laws of China in relation to the Loan Arrangement covered in the Loan Agreement have all been made or obtained in writing;
18. Under any agreement to which the Borrower is a Party and the Guarantors the other, or to which the Borrower and/or the Guarantors or their assets are bound, the Borrower and/or the Guarantors have not committed any Event of Default that would impair their ability of performing the obligations under the Loan Agreement;
19. As of the date hereof, there has been no pending lawsuit, arbitration by arbitration tribunal or other potential material dispute against the Borrower and/or the Guarantors that may constitute substantial adverse effect upon the borrowing, utilization and/or repayment of the Loan by he Borrower, or upon the financial condition or operation of the Guarantors, or upon the Guarantors' performance of the guarantee obligations under the Letter of Guarantee; nor any pending legal or governmental proceedings against the validity and legality of the Loan or any threat that would trigger such procedures;
20. The Borrower and the Guarantors shall enjoy no sovereign immunity in the course of the execution, delivery, performance of the loan documents such as the Loan Agreement and/or the Letter of Guarantee, and shall not demand such rights within the terms of such loan documents such as the Loan Agreement and the Letter of Guarantee;
This Opinion is issued solely for the purpose of the captioned Syndicated Loan Arrangement for the benefit of the Lending Banks. The Opinion issued by the Law Firm herein is based on the Legal Opinion issued on [ ], 2000 by Commerce & Finance Law Firm, which is the Chinese legal council of the Borrower and the Guarantors. The Opinion may be relied upon by the Lending Banks for the above purpose only. This Opinion shall not be disclosed to any other person or be used for other purposes without the prior consent of the Law Firm.
JINGTIAN & GONGCHENG LAW FIRM
GUARANTEE
To: Construction Bank of China, Bank of China and other Lending Banks
indicated in Schedule One of the Syndicated Loan Agreement
Re: Provision to the Lending Banks of irrevocable and unconditional
guarantee with joint liabilities regarding the Syndicated Loan Agreement (RMB7,500,000,000) (the "Loan Agreement") executed on the date of October 7, 2000 between China Mobile (Shenzhen) Limited and Construction Bank of China, Bank of China and other Lending Banks listed in Schedule One of the Syndicated Loan Agreement (the " Lending Banks").
Guangdong Mobile Communication Company Limited (the "Guarantor") is a wholly foreign-owned limited liability company established and existing under the laws of the People's Republic of China ("China"), with its registered address of its headquarter at Quanqiutong Hotel, No. 208 Yuexiunan Rd., Guangzhou. In accordance with Security Law of the People's Republic of China (the "Security Law") and other relevant laws and regulations, the Guarantor hereby provides the Lending Banks with a Guarantee in favor of the Lending Banks and undertakes to perform its obligations in accordance with stipulations under this Guarantee.
WHEREAS:
China Mobile (Shenzhen) Limited (the "Borrower"), a wholly foreign-owned limited liability company established and existing under the laws of China, will execute the Loan Agreement on the same date of the execution of the Letter of Guarantee. The Loan Agreement Provides that the total amount of the principal of the loan (the "Loan") granted to the Borrower by the Lending Banks shall not exceed Renminbi seven billion five hundred million (RMB 7,500,000,000.00).
The condition precedent to the Lending Banks' assumption of the obligation to disburse the Loan under the Loan Agreement is, including but not limited to, the receipt by the Agency Bank of the unconditional and irrevocable Guarantee in favor of the Lending Banks issued by the Guarantor, guaranteeing that the Borrower will pay all the payable sums from time to time to the Lending Banks through the Agency Bank on a timely basis in accordance with the Loan Agreement.
Therefore, this Guarantor hereby agrees that the Guarantor and other Guarantors, including Zhejiang Mobile Communication Company Limited, Jiangsu Communication Company Limited, Fujian Mobile Communication Company Limited, Henan Mobile Communication Company Limited and Hainan Mobile Communication Company Limited (the "Guarantors") shall assume joint and several liabilities for all debts, responsibilities and obligations stipulated under the Loan Agreement, and that the Guarantor and the Borrower under the Syndicated Loan Agreement shall assume joint and several liabilities for all debts, responsibilities and obligations stipulated under the agreement.
Unless otherwise stipulated, terms used this Letter of Guarantee shall have the same meaning as defined in the Loan Agreement.
The Guarantor hereby further agrees:
1. As the surety with joint liabilities and/or joint guarantee liabilities (similarly hereinafter), the Guarantor and other Guarantors indicated hereby absolutely and unconditionally guarantee to the Agency Bank and the Lending Banks that the Borrower shall make payments in full, promptly and on a timely basis when any part of and/or all the principal, interest, Default Interest, compensation, fees to satisfy creditor's claim and other amounts fall due whether pursuant to the provisions, as a result of accelerated repayment or otherwise in accordance with the stipulations under the Loan Agreement, and any and/or all of any other relevantdocuments and agreements; the Guarantor understands and acknowledges that in accordance with the Security Law, (1) the Lending Banks may request the Borrower to perform its liabilities or request the Guarantor to assume its guarantee liabilities within the limit of the Guarantee in the event that Borrower under the Guarantee with joint liabilities has not performed its liabilities before the deadline for performance of the liabilities; i.e.,upon the Borrower's failure to pay the due and payable sum under the Loan Agreement and the occurrence of events and circumstances of default, the Agency Bank may first request payment from the Guarantors who assume joint liabilities for debts together with the Borrower and need not first request payment from the Borrower; (2) in the event that two or more than two Guarantors assume joint guarantee liabilities, the Lending Banks may request any one of them to assume the entire guarantee liabilities. All Guarantors shall assume the obligation to guarantee the satisfaction of the entire creditor's claim.
2. Upon occurrence of Event of Default in the payment of partial or entire guaranteed obligation on the part of the Borrower, or upon occurrence of Event of Default or Anticipatory Event of Default, the Guarantors, as surety assuming joint guarantee liabilities, shall immediately pay the entire amount of the due and payable guaranteed liabilities of the Borrower (whether as a result of acceleration or otherwise) to the Agency Bank in favor of the Lending Banks in accordance with instructions of the Agency Bank, stipulations under the Loan Agreement and in the manner required thereby. The Guarantors shall not advance any claim, set-off, counterclaim or defense to the Agency Bank or any Lending Bank regarding the partial or entire payment.
3. Upon occurrence of Event of Default or Anticipatory Event of Default hereof, if no corrections have been made within the correction period of twenty eight (28) working days stipulated under Article 14.4 of the Loan Agreement, the Lending Banks shall be vested the power to deliver Notice of Claims accompanied with certificates regarding the Borrower's non-payment of any of the due and payable amount to the Guarantors, who, upon receipt of the above Notice of Claims, shall perform its guarantee obligation in accordance with the amount indicated in the Notice of Claims. Notwithstanding the foregoing, should the loan principal and/or interest under the Loan Agreement not be repaid and/or paid, the Lending Banks shall be vested the power to deliver Notice of Claims accompanied with certificates regarding the Borrower's non-payment of
such principal and/or interest to the Guarantors, who, upon receipt of the above Notice, shall perform its guarantee obligation in accordance with the amount indicated in the Notice of Claims.
4. The obligations of the Guarantors shall be absolute and unconditional and shall not be limited or affected by any circumstances, including (but not limited to) (1) the Borrower's failure to perform or comply with the Loan Agreement or any stipulations under any such documents or agreements; (2) transfer by the Borrower for the benefit of the Creditor (not limited to the Creditor's interest under this Guarantee), request to nominate a Recipient, Trustee or Liquidator for the Borrower or any of its assets, upon declaration of liquidation or filing of the request of liquidation on the part of the Borrower, or any other measures taken for the above purposes; (3) changes in the Borrower's name, scope of business, registered capital or organization documents; or (4) any other circumstances that may constitute a relief of obligations that shall be assumed by a guarantor or surety.
5. The Lending Banks may neglect or restrain the enforcement of the Guarantee, the Loan Agreement or of the payment under any other relevant guarantees, documents or agreements, however, such negligence or restraint shall not affect or mitigate the Guarantors' obligations under the Guarantee herein. Guarantors shall not request the Agency Bank to make enforcement of the Loan Agreement or any other guarantees as a prerequisite of the enforcement of the Guarantee herein. The Failure to enforce the Loan Agreement or any other guarantees shall not affect or mitigate the Guarantee herein or defend against the Guarantee herein for such reasons.
6. The Guarantors undertakes that they shall remain the wholly owned subsidiaries directly or indirectly owned by China Mobile (Hong Kong) Limited in China within the term of the Loan Agreement.
7. Debts, responsibilities or liabilities guaranteed by the Guarantee herein may at any moment be renewed, extended, amended, compromised, exempted or abandoned by the Agency Bank or Lending Banks upon request of the Borrower, and such conducts shall not impair or affect the Guarantors' liabilities under the Guarantee herein; and the guarantee liabilities of the Guarantors under the Guarantee herein shall also apply to the above renewal, extension, amendment or compromise by the Agency Bank and Lending Banks.
8. The Guarantee is a continuous guarantee, which covers any debts under the guaranteed liabilities. However, before the Agency Bank is vested the power to receive any debts under the guarantee liabilities, it shall have no obligation to exhaust its right of recourse against the Borrower, nor shall it have any obligation to exhaust its right of recourse the Agency Bank or certain Lending Banks may have against any Guarantor or any guarantee. This Guarantee shall be irrevocable and with full force before the full performance of the guaranteed obligations and the full payment of any indebted amount under the guarantee. The Guarantors shall waive the defense arising from any time limit that might affect the obligations hereunder or the enforcement hereof.
9. Prior to the full payment and/or repayment of the principal, interest and/or other amounts under the Loan Agreement, the Guarantor shall not have the right of subrogation obtained as a result of its performance of any of the guarantee liabilities hereunder. Notwithstanding the foregoing, in the event that the Guarantor receives any sums as a result of its entitlement to such right of subrogation while one of the guaranteed obligations has not been performed, the Guarantor shall agree to pay all such sums to the Agency Bank to offset the amount over due under stipulations of the Loan Agreement.
10. The Guarantors agree to pay all fees and charges related to the enforcement of this Guarantee.
11. The Guaranteed obligations hereunder shall be obligations guaranteed in the form of Renminbi and paid by the Guarantors in accordance with the Guarantee in Renminbi. In any circumstances, Renminbi shall be the currency used in the account and payment.
12. Any Notice or Request delivered to the Guarantors shall be in writing, and (1) delivered by special messenger; (2) sent by reputable courier service, or (3) transmitted by telex or facsimile. The address of the Guarantor:am of the Company: Guangdong Mobile Communication Company Limited., Address: Quanqiutong Hotel, No. 208 Yuexiunan RD, Guangzhou, Postal Code: 510100, Contact: Tan Biying, Telephone
Number: 020-8389 9909, Fax: 020-8389 9929, E-mail:
tan_by@gmcc.net. The date of Notice or Request referred to herein shall be (1) the day of the receipt thereof if by delivery by special messenger; (2) the next day following the delivery to the courier service company if delivered by a creditable courier service; or (3) the fourth day following the delivery to the postal service if delivered by post-paid registered mail; (4) the delivery date with confirmation of acceptance if delivered by telex or facsimile. For the purpose hereof, the Guarantor may change its address by a written notice to the Agency Bank.
13. This Guarantee shall be equally binding upon the Guarantor, its successor and the transferees and may be enforced by the Agency Bank, the Lending Banks, its successors and transferees. The Guarantor shall have no right to assign or to otherwise transfer the obligations hereunder. The Lending Bank may transfer part or all of its rights and interest hereunder to another Lending Bank at any time, in which case the Guarantor shall be promptly informed of such a transfer upon completion of the transfer; in the event that the Lending Bank needs to transfer its rights and interest hereunder to a bank or financial institution other than the Lending Banks, the Lending Bank shall obtain the consent of the Guarantors first (which consent shall not be unreasonably withheld). The Guarantors' Obligations hereunder shall not be Limited or affected in anyway by the above assignment or transfer. Any of the above assignment and transfer shall come into effect and be binding on the Guarantors upon the date of such assignment or transfer.
14. The Guarantors hereby represent and warrant that:
a) the Guarantors are established and validly existing under the Laws of China, with its registered address as above;
b) the Guarantors have full legal rights, powers and authority to conduct their existing operations, possess their assets, assume this Guarantee and other obligations stipulated hereunder, execute and deliver this Guarantee and to perform and comply with the terms and conditions hereunder;
c) the Guarantors have taken all appropriate and necessary corporate and legal actions to authorize the execution and delivery of this Guarantee and to perform and abide by the stipulations and terms hereunder;
d) except for the relevant documents already obtained and submitted to the Agency Bank and the Lending Banks, the execution, delivery, effectiveness, performance, enforcement, the validity as evidence in legal proceedings of this Guarantee and the Guarantors' obligations hereunder do not require further consent from any other governmental departments or agency or any other shareholders or creditors, or notification thereto, or registration or filing therewith, or other actions to be taken;
e) This Guarantee constitutes the legal and valid obligations binding on the Guarantors and can be enforced in accordance with its stipulations. The execution, delivery, performance of terms and conditions hereunder, the payment of all the due and payable amount in the currency stipulated hereunder on the date indicated herein do not (1) infringe or violate any stipulations of any applicable laws of China and other government regulations (with legal validity or not); (2) violate any government guidelines and policies (with no legal validity) applicable to the Guarantors; (3) conflict with the business license of the Guarantors; (4) conflict with any agreements, debentures, mortgages or other documents other than this Guarantee to which the Guarantor is a Party or the Guarantor or its assets is bound, and will not bring about consequences of violation of any of the stipulations thereof nor create any mortgage, lien, pledge, security interests or preferential arrangement; (5) constitute Event of Default under any agreement nor constitute Event of Default due to delivery of Notice or elapse of time or both;
f) under any agreement to which the Guarantor is a Party or the Guarantor or its assets is bound, no Event of Default has occurred on the part of the Guarantor which affects the Guarantor's ability to pay the full amount payable hereunder;
g) this Guarantee constitutes the Guarantors' direct, unconditional and comprehensive obligations. With respect to the priority order of the Guarantor's payment of other loans, liabilities, guarantee or obligations and all other aspect the Guarantors' obligations hereunder at least have and will have the priority equal to the guaranteed loans, liabilities or obligations and other guarantee;
h) there are no material or possible debts that have potential adverse impact on the Guarantor's performance of its guarantee obligations hereunder which has not been disclosed to the Agency Bank or the Lending Banks by the Guarantor;
i) there are no pending or threatening lawsuit, arbitration or other proceedings against the Guarantors with the tribunal of arbitration, the court, governmental agencies or administrative agencies which may affect the financial status or operation of the Guarantors, or impair the Guarantors' ability to pay all or part of the payable amount in accordance with this Guarantee, or affect the validity or enforcement of this Guarantee in anyway;
j) the Guarantors undertake their business and operations in accordance with all applicable laws, rules and regulations of China.
15. The Guarantors further warrant that:
a) the Guarantors shall maintain their accounting system in accordance with the accounting principles stipulated under the laws of China;
b) the Guarantors shall deliver an audited annual financial statement to the Agency Bank within 120 days after every fiscal year and deliver an unaudited semi-annual financial statement to the Agency Bank within 90 days after the first half of every fiscal year;
c) after the execution of this Guarantee, the Guarantors respectively or along with the Borrower shall appoint one of the top six international accounting firms to prepare semi-annual consolidated financial statements of the Guarantors in accordance with the accounting standards of China and deliver them to the Lending Banks through the Agency Bank. In the event that the parent company of the Guarantors, namely China Mobile (Hong Kong) Limited shall arrange and prepare audited semi-annual financial statements in accordance with laws of Hong Kong rules of Hong Kong Stock Exchange, the semi-annual consolidated financial statements of the Guarantors hereunder shall be audited financial statements; otherwise, the international accounting firm ranked among the top six international accounting firms shall prepare unaudited semi-annual consolidated financial statements of the Guarantors and provide the Agency Bank with a letter, indicating that the unaudited semi-annual consolidated financial statements of the Guarantors prepared by the firm (1) is in accordance with the accounting standards of China; (2) the preparation method is reasonable and correct. Such semi-annual consolidated financial statements shall at the same time be attached with a letter produced by the Guarantors indicating the truthfulness of the data presented in the financial statements. Expense incurred in the preparation of the financial statements shall be borne by the Guarantors and/or the Borrower;
d) the Guarantors respectively or along with the Borrower shall appoint one of the top six international accounting firms to prepare semi-annual consolidated financial statements for the six
Guarantors hereunder and deliver them, through the Agency Bank, to the Lending Banks. The Guarantors and/or Borrower shall bear the relevant fees and charges;
e) the Guarantors shall notify the Agency Bank immediately with regard to the following issues:
i) lawsuit, arbitration or claims in any other forms regarding any creditor's claim with the total amount exceeding Renminbi three hundred million (RMB 300,000,000) or with the equivalent amount in other currencies;
ii) merger with other companies or business institutions;
iii) sales, transfer or other means of disposal of assets or business of more than Renminbi one billion (RMB 1,000,000,000);
f) the Guarantors shall abide by applicable laws, rules and regulation, authorities or agreements, perform relevant obligations and pay any due and payable tax;
g) in the event that the aggregate balance of debt or contingent liabilities of the Guarantors is less than one hundred and twenty percent (120%) of the total shareholders' equity, the Guarantors shall notify the Agency Bank on a timely basis of their material or possible debts incurred, assumed or newly-established with the amount of a single item exceeding Renminbi one billion (RMB1,000,000,000) or debt with equivalent value and immediately provide the Agency Bank with text of the agreement regarding the material debt or contingent liabilities; in the event that the
aggregated balance of the debt or contingent liabilities of the uarantors exceeds one hundred and twenty percent (120%) of the total shareholders' equity, the Guarantors shall not incur, assume or establish any additional debt or contingent liabilities without the Lending Banks' prior consent. To this end, the Guarantors shall notify the Agency Bank in writing of the event that the Guarantors may incur, assume or establish additional debts or contingent liabilities with attachment of a draft of the agreement regarding the relevant debts and contingent liabilities. The Agency Bank shall notify the Guarantors within ten (10) Bank Business Days after receipt of the above written Notice if the Agency Bank agrees upon the above debts or contingent liabilities. The Agency Bank's failure to notify the Guarantors within the above time limit shall be deemed as consent;
h) the Guarantors will not take any action or procedure for the purpose of dissolution, liquidation or termination of the business without the Lending Banks' prior consent;
i) No other debt or contingent liabilities with higher rank of priority over the debts and contingent liabilities hereunder in respect of the order of payment will be created.
16. The validity, presumption and interpretation of this Guarantee and all the rights, obligations and liabilities arising out of this Guarantee shall be governed by and interpreted according to the laws of China. Any legal actions or proceedings taken against the Guarantors or any of their assets in connection with this Guarantee shall be submitted to the competent tribunal of economic adjudication of the people's court in Beijing.
17. In the event that any payment under this Guarantee is required to be made on a Non-Bank Business Day, such payment shall be postponed to the next Bank Business Day or any other date provided under the Loan Agreement.
18. The Term of the Guarantee herein shall begin from the date of the execution of the Syndicated Loan Agreement and end on the first anniversary of the expiry of the Term of the Loan stipulated under the Syndicated Loan Agreement; in the event that the loan is extended, the term of the Guarantee shall end on the first anniversary of the expiry of renewed term of the Loan.
On this basis, the Guarantors have executed this Guarantee in favor of the Agency Bank and the Lending Banks, which shall come into effect upon execution of the Letter of Guarantee by the Guarantors and the stamp of their official seals.
GUARANTOR: GUANGDONG MOBILE COMMUNICATION COMPANY LIMITED
(OFFICIAL SEAL)
AUTHORIZED REPRESENTATIVE: /s/ LI GANG
TITLE: CHAIRMAN & GENERAL MANAGER
