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and Chinese, and to request your Excellency's Ministry to forward them to the British Legation to be placed on record there."
I have the honour accordingly to forward to your Excellency herewith the English and Chinese texts of the Agreement received from the Ministry of War that you may cause them to be placed on record.
1 shall be grateful for the favour of a reply.
Enclosure 2 in No. 1.
I avail, etc.
Agreement: Chinese National Wireless Telegraph Company.
THIS agreement, made on this 24th day of May, 1919, or the 24th day of the 5th month of the eighth year of the Republic of China, at l'eking, China, by and between the Government of the Republic of China, represented by the Ministry of War of the one part, hereinafter referred to as "the Government," and Marconi's Wireless Telegraph Company Limited), a limited liability company, organised under the Company Laws of England, and having its registered office at Marconi House, Strand, London, of the second part, hereinafter referred to as "the Marconi Company."
Witnesseth that:
Whereas in clause 12 of an agreement between the parties hereto, bearing date the 27th day of August, 1918, or the 27th day of the 8th month of the 7th year of the Republic of China, it was provided as follows :--
"In consideration of the above the Government promises that in the event the Government decides to establish a repair shop or factory for the maintenance of wireless installations in China, or for the manufacture of wireless apparatus, the Government will first
with a view of arranging joint operation of discussion with the open
company such factory by the Government and the company."
Now, therefore, the parties hereto having, in pursuance of the above provision, duly discussed arrangements for joint operation, it is, in consideration of the mutual benefits to be derived there from, hereby understood and agreed as follows :—
1. A joint stock limited liability company, under the terms and conditions hereinafter contained, is hereby constituted of which this agreement as and when communicated to His Britannic Majesty's Minister at Peking through the Ministry of Foreign Affairs, shall form the special charter. The terms and conditions of this agreement as such special charter may not be hereafter varied save by the mutual consent of the parties hereto, expressed with the same formality as attends the execution and communication of these presents.
2.a.) The said company shall be known as "the Chinese National Wireless
the Chinese Company "). Telegraph Company" (hereinafter referred to as
period of twenty years and at (b.) After this agreement has been in force for a any time thereafter, if the Government wishes, it will have the right to exercise either one of the two following options:-
First, the Government will have the right to purchase at a fair and reasonable price under conditions then existing all the shares of the Marconi Company, its patent rights, its designs, drawings, &c., in the Chinese Company, thereby becoming the sole proprietor of the Chinese company.
Second, the Government will have the right to liquidate its shares in the Chinese Company, but when the price offered by the Marconi Company is equal to that offered by any others, then the Marconi Company will have the first option to purchase.
In either case the Government must give one year's notice in writing, specifying which of the two above options it wishes to exercise, at the conclusion of which this agreement shall be terminated.
(c.) The liability of its shareholders shall be limited to the amount of their subscriptions.
(d) The object of the said Chinese Company shall be to manufacture wireless telegraph and telephone apparatus, materials and supplies, to deal in such apparatus,
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material and supplies, and to repair and maintain wireless installations now existing and hereafter established, but nothing in this agreement confere any right upon the Chinese Company to operate commercial wireless stations in China.
3. The Marconi Company hereby grants to the Chinese Company the right to the esu in China, so long as it is a party to the terms and conditions of this agreement, of all the Marconi Company's patents, rights, designs, drawings, and secret processes, past present and future, for wireless telegraphy and relephony.
agrees
4.(a.) In consideration of the grant set forth in clause 3 above, the Government that the net divisible profits of the Chinese Company shall be divided into three equal parts: the Government and the Marconi Company each receiving one part as shareholders, and the remaining one-third is to be paid to the Marconi Company. However, should the Government exercise its right to purchase the entire Chinese Company as rovided for in clause (b), the latter payment will thereupon be automatically discontinued also,
(b.) If hereafter at any time, before the Government has exercised its right to purchase the entire company as provided for in clause 2 (b), the Government should desire to abolish the payment of the one-third of the net divisible profits to the Marconi Company in consideration of the grant of patent and other rights us provided in the section next preceding, the Government may do so by paying a lump sum to the Marconi Company in an amount to be determined by agreement between the Government and the Marconi Company, which amount shall not exceed 300,000l. Should the Government avail itself of this right, thereafter all uet divisible profits made by the Chinese Company shall be equally divided between the Government and the Marconi Company.
5.-(a.) The capital of the Chinese Company shall be 700,000, divided into 700,000 shares of 11. each.
(b) Immediately on the signing of this agreement, capital, amounting to 200,0007., shall be paid up one-half, viz., 100,000Z., by the Government and one-half, viz., 100,0001, by the Marconi Company.
(c) Further subscriptions for shares shall be in instalments as and when required and in the same proportions as above mentioned, such increases to be determined by resolution of the board of directors hereinafter provided for; but any increase in capital shall only take place in the event of the business of the Chinese Company justifying
such increase.
6. The Government, recognising that the Chinese Company's success depends upon mutual co-operation, hereby agrees that, if the goods supplied by the Chinese Company are not lower in quality nor higher in price to those offered by other companies, the Government will purchase exclusively from the Chinese Company all its present and future requirements in wireless telegraph and telephone apparatus, material and supplies, and further, if the Government suffers no loss by giving such work to the Chinese Company, the Chinese Company shall be exclusively entrusted with the repair and maintenance of all wireless telegraph and telephone apparatus and equipment in China. 7. The instalments due from the Government in respect of the shares allotted to them shall be advanced by the Marconi Company on behalf of the Government, against, and in consideration of which advances, as and when made, the Government shall issue to the Marconi Company negotiable Treasury notes in sterling amounts equal to the respective advances, the said Treasury notes to bear interest at the rate of 8 centum per annum, payable, in sterling, semi-annually and maturing ten years from their respective dates, and of such denominations, within the sum represented as the Marconi Company may desire. Should the Government wish to repay the amount advanced by the Marconi Company before maturity, it may discuss the matter with the Marconi Company.
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8. Pending full payment of all Treasury notes issued under the terms of this agreement, all the interest of the Government in the investment and the profits of the undertaking shall stand pledged to the Marconi Company as security for such payment. The Government, however, shall at all times receive its proportion of the profits of the Chinese Company, always provided that interest and redemption on the Treasury notes above referred to is duly paid as such payments become due.
9. The supreme control of the Chinese Company shall be vested in a board of directors, consisting of three appointees of the Government and three appointees of the Marconi Company, provided, however, that, so long as the Government is indebted t the Marconi Company in respect of any of the Treasury notes issued against advanced o share subscription account, as provided in clause 7 above, one of the three appointees f
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