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EXHIBIT 4.3
CAPITAL CONTRIBUTION AGREEMENT
This Capital Contribution
Agreement is entered into this 9th day of June, 2005
in Beijing by and
among:
CHINA NATIONAL OIL AND GAS
EXPLORATION AND DEVELOPMENT CORPORATION ("CNODC")
ADDRESS: International
Investment Building D, Fuchengmen Beidajie, Xicheng
District, Beijing
LEGAL REPRESENTATIVE: Wang
Dongjin
CENTRAL ASIA PETROLEUM
COMPANY LTD. ("CAPC")
ADDRESS: Floor 6,
Communication Building, No. 2 Andelibeijie, Dongcheng
District, Beijing
LEGAL REPRESENTATIVE: Wu
Enlai
PETROCHINA COMPANY LIMITED
("PETROCHINA")
ADDRESS: World Tower,16
Andelu, Dongcheng District, Beijing
LEGAL REPRESENTATIVE: Chen
Geng
CHINA PETROLEUM EXPLORATION
& DEVELOPMENT COMPANY LIMITED ("CPEDC")
ADDRESS: International
Investment Building D, Fuchengmen Beidajie, Xicheng
District, Beijing
LEGAL REPRESENTATIVE: Wang
Dongjin
WHEREAS:
1. CNODC, a
collectively-owned company, was established on 13 May 1987
in
Beijing by
law and validly existing, in compliance with laws of the
People's
Republic of China; it is mainly engaged in overseas oil and
gas
exploration and development.
2. CAPC, a company with
limited liabilities, was established on 10 July 1996
in Beijing
by law and validly existing, in compliance with laws of
the
People's
Republic of China; 100% of its equity is held by CNODC
indirectly.
3. PetroChina, a joint
stock company with limited liabilities, was
established on 5
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November
1999 in Beijing by law and validly existing, in compliance
with
laws of
the People's Republic of China; the shares and American
Depositary
Shares of
PetroChina are listed on the Stock Exchange of Hong Kong
Limited
and the
New York Stock Exchange.
4. CPEDC, a company with
limited liabilities, was established by CNODC and
CAPC by
law on 14 March 2005 in Beijing and validly existing, in
compliance
with laws of the People's Republic of China; CNODC and
CAPC
control
the company by 95%/5%.
5. CAPC agrees to sign
the Equity Transfer Agreement separately with CNODC,
to
transfer its 5% equity of CPEDC to CNODC.
6. CNODC agrees to
transfer the Transferred Assets (see Article 1.9 for the
definition) held by CNODC, directly or indirectly, to CPEDC Group
for free
of charge.
CPEDC agrees, when all closing conditions specified in
Article
3.1 herein
are satisfied or considered as satisfied according to
Article
3.2
herein, to make capital increase, and PetroChina also agrees
to
subscribe
for all additional registered capital due to CPEDC's
capital
increase
("this Transaction"). Upon the completion of this
Transaction,
PetroChina
will hold 50% equity of CPEDC.
NOW, THEREFORE, in
consideration of equality and mutual benefit, through
friendly negotiation, and as
per relevant laws and regulations of the People's
Republic of China, the
parties agree upon this Transaction as follows:
ARTICLE 1 DEFINITION AND INTERPRETATION
Unless specified otherwise in
this agreement, the terms and expressions herein
have the following
meanings:
1.1. THE AGREEMENT: means the Capital
Contribution Agreement and any revision
and
modification hereto duly agreed and executed by and among the
parties
hereto in
writing from time to time.
1.2. REGISTERED CAPITAL SUBSCRIPTION:
means that PetroChina subscribes for the
additional
registered capital of CPEDC for the purpose of this
Transaction, i.e. RMB 50 million, to obtain 50% equity of
CPEDC.
1.3. CLOSING: means that PetroChina
pays the consideration specified in Article
5 herein
when all closing conditions specified in Article 3.1 herein
are
satisfied or
considered as satisfied according to Article 3.2 herein.
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1.4. CLOSING DATE: means the date when
PetroChina pays the consideration
specified
in Article 5 herein when all closing conditions specified
in
Article
3.1 herein are satisfied or considered as satisfied according
to
Article
3.2 herein.
1.5. BASE DATE: means 31 December
2004.
1.6. RELATED PERIOD: means the period
from 1 January 2005 to the Closing Date
(including).
1.7. MAJOR PROCEEDINGS: means any
pending lawsuit, arbitration, administrative
appeal or
other legal processes related to Transferred Assets
arising
before the
Closing Date, involving a value of more than US$3
million
individually.
1.8. SPECIAL REGIONS: means Sudan,
Syria, Iran, Burma, and Iraq.
1.9. TRANSFERRED ASSETS: means all
assets and liabilities located in areas
other than
Special Regions, originally owned by CNODC whether directly
or
indirectly, and listed in the Appraisal Report. See Exhibit 1
for
Transferred Assets-related projects and Exhibit 2 for
Transferred
Assets-related companies.
1.10. EXAMINING AND APPROVING
AUTHORITIES: mean all foreign and domestic
governmental examining and approving authorities that are entitled
to
approve or
authorize this Transaction and other actions related
thereto.
1.11. APPRAISAL REPORT: means
the report made by China Enterprises Appraisals
for the
assets and liabilities of CPEDC and/or Transferred Assets on
Base
Date.
1.12. CPEDC GROUP: means
CPEDC and its owned companies listed in Transferred
Assets.
1.13. CNPC: means China
National Petroleum Corporation. It is the controlling
parent
company of CNODC and PetroChina.
1.14. FORCE MAJEURE: means
war, natural disaster and any other unforeseen and
inevitable
event that cannot be controlled by the parties hereto.
1.15. PREEMPTION RIGHTS:
means that once CNODC or its controlling companies sell
their
owned assets or equities in relation to oil/gas
exploration,
development, production, pipelines, refining and chemical
businesses, or
CPEDC
issues a notice to CNODC or its controlling companies requesting
for
purchase
of aforesaid assets or equities, as negotiated by the
parties,
CPEDC is
entitled to a preemption, without breaching the governing
laws
and
regulations and any relevant agreements signed by CNODC or
its
controlling companies.
ARTICLE 2 CAPITAL INCREASE
2.1 Capital Increase: CPEDC and
its existing shareholders agree upon the
capital
increase for CPEDC in accordance with the Agreement,
i.e.,
increasing
its registered capital from RMB 50,000,000 to
RMB100,000,000,
and
PetroChina
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agrees to
subscribe for RMB 50,000,000 of the registered capital of
CPEDC
at the
consideration specified in Article 5.1 herein and obtain 50%
of
CPEDC's
equity interest.
2.2 From the Closing Date,
PetroChina will hold 50% of CPEDC's equity. Within
20 working
days after the Closing Date, CPEDC shall convene the
shareholders' meeting to elect its directors and amend its articles
of
association, apply to relevant registration authorities for
registration
changes
regarding capital increase, and issue to CNODC and
PetroChina
respectively the Capital Contribution Certificate reflecting the
changed
equity
structure of CPEDC.
2.3 The parties agree that the
Articles of Association of CPEDC after
PetroChina
completes capital increase to it shall be in the form
attached
hereto as
Exhibit 4, and the parties shall cause the Shareholders'
Meeting
of CPEDC
to approve the form set forth in Exhibit 4.
ARTICLE 3 CLOSING CONDITIONS FOR THIS TRANSACTION
3.1 The closing herein shall
occur on the date agreed by the parties when all
preconditions below are satisfied or the parties agree unanimously
that
any one or
partial or all preconditions below are waived.
(1)
All procedures
(including but not limited to obtaining the approval
fromor filing with domestic and foreign examining and
approving
authorities and the consent from third party) regarding transfer
of
Transferred Assets from CNODC and/or its subsidiaries to
CPEDC
and/or its subsidiaries have been completed;
(2)
All necessary
approvals from examining and approving authorities and
consent from third party have been obtained for this
Transaction;
(3)
The Appraisal
Report for CPEDC and/or Transferred Assets have been
confirmed by CNODC and PetroChina, and all necessary formalities
for
filing have been completed;
(4)
PetroChina has
obtained the approval to this Transaction by its duly
convened extraordinary shareholders' meeting; and
(5)
The
representations and warranties given in Exhibit 3 remain
correct
and free from error, as of the Closing Date.
3.2 If the parties hereof agree,
through negotiation, to grant waiver with
respect to
the conditions set forth in (1) and (5) under Article
3.1
herein
when such conditions have not been satisfied, it shall
be
considered that all such
conditions have been satisfied, but the waiver
with
respect to item (1) shall be subject to
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the
completion of relevant procedural formalities and conform to the
laws
and
regulations.
3.3 The deliverables to be
delivered on the Closing Date are the Transferred
Assets for
which the closing conditions have been satisfied or
considered
to be
satisfied in accordance with Article 3.2.
3.4 The parties believe and will
make all reasonable efforts to ensure that
the
closing will occur no later than 30 December 2005.
ARTICLE 4 CLOSING
4.1 If, before 10 December 2005,
CNODC believes that the closing conditions
specified in Article 3.1 herein
have been satisfied completely, it shall
issue a
written notice to PetroChina for requesting the closing
and
provide
the copies of documents/evidences demonstrating that the
closing
conditions
have been satisfied, including but not limited to:
(1)
Title
certificates for Transferred Assets (including but not
limited
to equity certificates, registration documents for changes
to
petroleum contracts);
(2)
Confirmation
documents by the third party (if necessary);
(3)
Approval/ratification documents by examining and
approving
authorities in countries/regions where the Transferred Assets
are
located (if necessary);
(4)
Approval/ratification/filing documents by examining and
approving
authorities in the PRC;
(5)
Legal opinions
on the validity of this Transaction and Transferred
Assets issued by Chinese lawyers of CNODC to PetroChina.
4.2 If PetroChina believes that
all closing conditions have been satisfied, it
shall,
within ten (10) days as of its receipt of the above notice
from
CNODC,
reply to CNODC in writing which shall specify the Closing
Date;
provided
that the closing date shall not be later than 30 December
2005.
4.3 If, on or before 10 December
2005, CNODC believes that the closing
conditions
specified in Article 3.1 herein have not been satisfied
completely, it shall issue a written notice to PetroChina, stating
such
fact.
PetroChina shall, within ten (10) working days upon its receipt
of
such
written notice, notify CNODC in writing as to whether
such
unsatisfied conditions will be waived and confirm whether the
closing
conditions
should be considered as satisfied in accordance with
Article
3.2
hereinabove. If it is confirmed that the closing conditions should
be
considered
as satisfied, PetroChina shall also expressly specify
the
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closing
date in such notification; provided that the closing date
shall
not be
later than 30 December 2005.
4.4 At the Closing Date,
PetroChina shall make the lump sum payment for the
consideration specified in Article 5.1 hereinbelow, in cash, to
the
account
indicated by CPEDC.
4.5 Immediately after CPEDC has
received the consideration from Petrochina for
all of the
additional registered capital subscribed for by PetroChina,
the
parties
shall duly consider PetroChina having become the shareholder
of
CPEDC and
holding 50% of CPEDC's equity. CPEDC shall within ten (10)
days
after the
Closing Date, appoint a qualified auditor to verify the
additional
registered capital, who shall issue the capital
contribution
verification report, and CPEDC shall be also responsible for going
through
procedures
necessary for registration change at the competent
administration for industry and commerce regarding its capital
increase by
PetroChina.
ARTICLE 5 CONSIDERATION
5.1 The parties agree hereby,
that PetroChina shall pay RMB20,741,250,000.00
(or US$2.5
billion + RMB50.00 million converted on the basis of
benchmark
exchange
rate of US$ vs RMB announced by the People's Bank of China on
the
base date
) as the consideration for the additional registered capital
of
CPEDC
subscribed by it, and such consideration is based on the fact
that
all
Transferred Assets are injected into CPEDC upon the closing.
After
capital
verification, RMB 50,000,000 of aforesaid consideration will
be
entered in
the registered capital of CPEDC, and the remaining will
be
entered in
the capital surplus of CPEDC.
5.2 With respect to any items
among the Transferred Assets that have been
approved
by the governments in which such items are located and/or
agreed
by the
third party while, for which, the formalities regarding
the
transfer
to CPEDC have not been completed by the Closing Date (but
CNODC
and
PetroChina acknowledge that no legal obstacles exist in the
execution
of such
formalities) , the parties agree that the value of such items
will
not be
deducted from the consideration, instead such items will
be
delivered
along with those projects for which all the relevant
formalities
have been
completed. CNODC also undertakes to complete all the
formalities
for
transfer of such items to CPEDC as soon as possible.
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ARTICLE 6 REPRESENTATIONS AND WARRANTIES
6.1. The parties undertake to each
other that, unless specified otherwise
herein,
the representations and warranties under the Agreement are
true,
correct
and complete in all material aspects, and also covenant to
not
impair the
truth, correctness and completeness of each representations
and
warranties
by any action or omission.
6.2. The parties hereby represent and
warrant to each other as follows:
(1)
Such party is
duly established and validly existing in compliance
with the laws of the jurisdiction in which it is incorporated,
and
has obtained all governmental authorizations and approvals
required
for its business
operation;
(2)
Such party has
obtained all authorizations and approvals specified
under relevant laws, regulations and articles, and has the power
to
sign and perform the Agreement;
(3)
The execution of
the Agreement and all documents refereed to herein
by such party doesn't violate its articles of association,
any
currently effective law or its obligations under any
existing
contract or agreement to which it is a party;
(4)
such party has
never conducted any activity that impairs or would
impair the interests of any other party hereto, and will
make
efforts to prevent any third party from conducting any
such
activity.
6.3. CNODC's further representations
and warranties regarding CPEDC Group, the
projects
listed in Exhibit 1 as Transferred Assets and other
related
matters,
are attached hereto as Exhibit 3.
6.4. Any representations and warranties
herein shall be able to be interpreted
severally
and independently, and subject to any contrary
provisions
herein,
shall not be limited or restricted by any other provisions
herein
or under
other agreement between the parties or any judgment on
aforesaid
articles.
6.5. If, from the date when the
Agreement is signed to the Closing Date for
this
Transaction, any party hereto is aware of any information that
may
have a
material adverse impact on the representations and warranties
or
this
Transaction, it shall disclose such information to all the
other
parties,
and take effective actions to minimize such adverse
impact.
6.6. The representations and warranties
of any party hereto shall constitute
preconditions for the other parties to perform the Agreement and
the other
parties
will enter into the Agreement by reliance on such
representations
and
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warranties.
ARTICLE 7 RIGHTS AND OBLIGATIONS OF THE PARTIES
7.1 CNODC and CAPC shall,
severally and jointly:
(1)
prepare and
submit all legal documents that shall be prepared and
submitted by CNODC and CAPC as required by the Examining
and
Approving Authorities, in order to perform the
Agreement;
(2)
apply to the
Examining and Approving Authorities and third parties
for, and make efforts to cause them to issue/provide,
approval,
consent or permission from or filing with such authorities and
such
third parties required to perform the Agreement;
(3)
provide all
necessary documents to assist CPEDC in going through
related procedures for change of business registration in
relevant
registration authorities;
(4)
after the
conclusion of the Agreement, upon its receipt of any
notice regarding the progress of the examination and
approval
procedures with the foreign and domestic authorities required
for
the
transfer of Transferred Assets, CNODC shall notify PetroChina
in
writing of the information about such notice, as soon as
possible;
(5)
make efforts to
assist PetroChina to prepare and submit all legal
documents that shall be prepared and submitted by
PetroChina.
7.2 PetroChina shall:
(1)
pay the
consideration indicated in Article 5.1 in cash to CPEDC,
pursuant to the Agreement in a timely manner;
(2)
prepare and
submit all legal documents that shall be prepared and
submitted by it as required by the Examining and
Approving
Authorities, in order to perform the Agreement;
(3)
exert itself to
assist CPEDC, CNODC and CAPC to prepare and obtain
all legal documents required by the Examining and
Approving
Authorities;
(4)
exert itself to
assist CPEDC, CNODC and CAPC to obtain all approval,
consent, permission and filing of the government and the
third
party;
(5)
provide all
necessary documents and assist CPEDC with procedures for
change of business registration in relevant registration
authorities;
(6)
notify CNODC as
soon as possible of the fact that its shareholders'
general meeting approves the Agreement by resolution.
7.3 CPEDC shall:
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Convene
the shareholders' meeting of CPEDC as soon as possible, after
the
closing of
this Transaction, to elect its directors and amend its
Articles
of
Association, apply for change of business registration to
relevant
registration authorities, and issue to CNODC and PetroChina
respectively,
the
Capital Contribution Certificate reflecting the changed
equity
structure
of CPEDC.
7.4 After the Agreement come
into effect, PetroChina shall be entitled to
appoint
two observers to CPEDC, who shall have the right of
information
regarding
the operations of CPEDC; CNODC and CPEDC shall enable
such
observers
to exercise the aforesaid rights; at the request of such
observers,
CNODC and CPEDC shall provide them with all documents in
relation
to the operations of CPEDC.
ARTICLE 8 ARRANGEMENTS IN THE RELATED PERIOD
8.1. The parties hereby agree that, any
change of CPEDC's assets and
liabilities during the Related Period shall not impact
PetroChina's
payment of
the consideration in the amount for the registered
capital
subscribed
for by it in accordance with the Agreement. All income,
expenditure and profit generated during the Related Period shall
be
attributable to the Transferred Assets and CPEDC Group.
8.2. The parties hereby also agree
that, the parties shall, at the Closing
Date,
clear any expenses advanced and any income received on behalf
of
Transferred Assets by CNODC during the Related Period, including
but not
limited to
shareholders' loans, borrowings and capital increase,
the
current
accounts and the product sales income and profit gains,
etc.,
during the
Related Period. Within 30 days after the Closing Date,
such
expenses
and income shall be settled by CPEDC and CNODC after the
qualified
auditor reviews and CNODC, PetroChina and CPEDC confirm
such
amount.
8.3. CPEDC shall not obtain any other
assets and liabilities beyond Transferred
Assets
during the Related Period, without consent of
PetroChina.
8.4. From the Effective Date of the
Agreement to the Closing Date, unless
specified
otherwise herein or agreed by PetroChina in writing, or
as
mandatorily required by law or by examination and approval
authorities,
CNODC,
CAPC and CPEDC shall:
(1)
operate the
Transferred Assets on in the ordinary course of
business;
(2)
maintain the
Transferred Assets at conditions equivalent to that in
the Base Date, except for wear and tear;
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(3)
not transfer,
mortgage or pledge the Transferred Assets, or provide
guarantee for any other person with the Transferred
Assets;
(4)
CPEDC Group
shall not sign any agreement, such as loan agreement,
that may increase the liabilities, unless it is necessary for
normal
operation;
(5)
not make any
revision to any existing contract or agreement that is
detrimental to the Transferred Assets;
(6)
perform the
Agreement after being executed or any other documents in
relation to Transferred Assets and its business in a timely
manner;
(7)
not release
anyone from any debts owed to CPEDC Group or waive any
claim of CPEDC Group;
(8)
not make a
compromise, settlement, withdrawal or waiver of rights
in
any form with respect to any action or arbitration or any
other
legal proceedings pending, in relation to CPEDC Group;
(9)
not issue or
plan to issue any additional equity or convertible
bonds of CPEDC Group or grant any subscription right or
similar
rights to the aforesaid equity or convertible bonds,
unless
otherwise specified in any agreement/contract binding upon
CNODC
and/or CAPC and/or CPEDC.
ARTICLE 9 LIABILITY FOR BREACH OF CONTRACT
9.1 CNODC, CAPC and/or CPEDC
shall be entitled to claim on PetroChina for
compensation for any direct loss and damage incurred by them, and
any
costs and
expenses arising from any action or claim incurred by them
due
to the
nonperformance or incomplete performance by PetroChina of any
of
its
obligations under the Agreement or breach of any provision
hereof.
PetroChina
shall not recover such compensation from CPEDC after
having
paid the
same.
9.2 PetroChina shall be entitled
to claim on CNODC for compensation for any
direct
loss and damage incurred by it, and any costs and expenses
arising
from any
action or claim incurred by it due to the nonperformance
or
incomplete
performance by CNODC, CAPC and/or CPEDC of any of their
respective
obligations under the Agreement or breach of any
provision
hereof.
CNODC shall not recover such compensation from CPEDC after
having
paid the same.
9.3 Notwithstanding the
provisions in Article 9.2 above, if CPEDC fails to
fulfill or
incompletely fulfills its obligations hereunder after
the
Closing
Date, the other parties shall be entitled to claim on CPEDC
for
compensation for any direct loss and damage incurred by them, and
any
costs and
expenses arising from any
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action or
claim incurred by them due thereto.
9.4 Notwithstanding any contrary
provisions herein, if CNODC's breach of any
of its
representations and warranties set forth in Article 6
hereinabove
results in
any loss and damage to and/or cause any costs and expenses
to
PetroChina
arising from any action or claim due thereto, the amount
of
loss that
PetroChina can recover from CNODC for any individual claim
shall
be no less
than RMB4,000,000 and the accumulative amount of loss
that
PetroChina
can recover from CNODC for any individual claim shall be
no
less than RMB20,000,000; provided
that the total amount of loss that can
be
recovered by PetroChina from CNODC hereunder shall not exceed 50%
of
the
consideration for this Transaction. In case of any breach by
CNODC,
CPEDC or
CAPC of any of their respective representations or warranties
set
forth
herein, if PetroChina doesn't make any claim with respect
thereto
within
twelve (12) months as of the Closing Date, CNODC shall not
assume
any
compensation therefor.
9.5 Notwithstanding any contrary
provisions herein, if PetroChina's breach of
any of its
representations and warranties set forth in Article 6
hereinabove results in any loss and damage to and/or cause any
costs and
expenses
to CNODC and/or CAPC and/or CPEDC arising from any action
or
claim due
thereto, the amount of loss that CNODC, CAPC or CPEDC
can
recover
from PetroChina for any individual claim shall be no less
than
RMB4,000,000 and the accumulative amount of loss that CNODC, CAPC
or CPEDC
can
recover from PetroChina for any individual claim shall be no less
than
RMB20,000,000; provided that the total amount of loss that can
be
recovered
by CNODC, CAPC or CPEDC from PetroChina hereunder shall
not
exceed 50%
of the consideration for this Transaction. In case of
any
breach by
PetroChina of any of its representations or warranties set
forth
herein, if
CNODC, CAPC or CPEDC doesn't make any claim on
PetroChina
within
twelve (12) months as of the Closing Date, PetroChina shall
not
assume any
compensation therefor.
9.6 Any tolerance, grace,
preferential treatment granted by any party to any
other
party or delay of any party to exercise any of its rights
hereunder
shall not
affect, damage or limit any rights or interests that such
party
shall have
under the Agreement and any laws and regulations, nor shall
be
considered
as such party's waiver of any of its rights or interests
under
the
Agreement, nor release the other parties from any of their
obligation
under the
Agreement.
9.7 All rights under the
Agreement shall be cumulative and not prejudice any
other
right or remedy specified in laws.
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9.8 Notwithstanding the above
agreement, all of the parties agree that, none
of the
parties hereto shall assume the default responsibility if
the
Closing of
this Transaction fails to occur as a result of the failure
to
obtain
from any of the Examining and Approving Authorities any
approval/ratification for any reason, and the parties shall assume
their
respective
costs arising out of or from this Transaction.
ARTICLE 10 FORCE MAJEURE
10.1 None of the parties shall be
considered in default if it is unable to
perform
this Agreement due to the occurrence of a force majeure
event;
provided
that such party shall make all necessary remedies if
practicable
to
mitigate the loss arising from the occurrence of the force
majeure
event.
10.2 Any party who encountered the
force majeure event shall notify the other
parties
thereof in writing as soon as possible, and submit a report to
the
other
parties, stating the reasons for its inability to perform
its
obligations under the Agreement either in whole or in part and for
any
extension
to perform its obligations, within fifteen (15) days after
the
occurrence
of the force majeure event and such party shall take all
actions
practicable to mitigate the loss. If any force majeure
event
occurs,
any party shall not be responsible for any damage and
additional
expense
and loss suffered by the other parties due to the failure
to
perform or
any delay in the performance of obligations hereunder.
The
party
claiming force majeure shall take proper measures to mitigate
or
remove the
impact thereof and try to resume the performance of the
obligations hereunder affected by force majeure as soon as
practicable.
ARTICLE 11 CONFIDENTIALITY
Each party shall treat all
details about the Agreement and this Transaction, the
interrelationship among the
parties and the documents provided to each other
hereunder as confidential
materials, and without prior written approval by the
other parties, shall not
disclose any of such materials to any party other than
the parties hereto in any way
except for the purpose of this Transaction, except
for any disclosure to
relevant agents, financial institutions and regulatory
authorities for the purpose
of the Agreement.
ARTICLE 12 GOVERNING LAW
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The conclusion, effect,
interpretation and performance of and settlement of any
dispute arising from the
Agreement shall be governed by the laws of the People's
Republic of China.
ARTICLE 13 DISPUTE SETTLEMENT
13.1 Any dispute arising out of or from
the Agreement shall be settled through
friendly
negotiations between the parties, and may be referred to
arbitration if it is failed to be resolved through
negotiation.
13.2 Such dispute shall be submitted to
and resolved by China International
Economic
and Trade Arbitration Commission for arbitration in Beijing
in
accordance
with its arbitration rules.
13.3 The award of China International
Economic and Trade Arbitration Commission
shall be
final and binding upon all the parties. The arbitration
costs
shall be assumed by the losing
party.
13.4 Pending resolution of any dispute,
the parties shall continue to perform
the
Agreement other than any matter under dispute.
ARTICLE 14 NOTICE
14.1 All communications between the
parties regarding the Agreement shall be
delivered
to each party at the following addresses by mail,
facsimile,
telex or
in other written form:
China
National Oil and Gas Exploration and Development
Corporation
Central
Asia Petroleum Company Ltd.
China
Petroleum Exploration & Development Company Ltd.
To:
Zhao Ying
Tel:
010-58551820
Fax:
010-58551007
PetroChina
Company Limited
To:
He
Jia
Tel:
010-84886219
Fax:
010-84882208
14.2 In case of change of the contact
person or any other contact information
of
any
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party,
such party shall notify the other parties in writing seven (7)
days
in
advance.
ARTICLE 15 ENTIRE AGREEMENT
15.1 The Agreement constitutes the
entire and sole agreement among the parties
regarding
this Transaction, and supersedes any other prior
understandings,
arrangements and agreements among the parties regarding this
Transaction.
15.2 All of the exhibits hereto shall
constitute a valid integral part hereof
and shall
have the equal legal effect as the Agreement.
ARTICLE 16 EFFECTIVENESS OF AND AMENDMENT TO AGREEMENT
16.1 The Agreement shall be signed by
the authorized representatives of all of
the
parties on the date first written above, and shall become
effective
from the
date when all of the parties have obtained all necessary
internal
corporate
authorizations and approvals required for the execution
and
performance of the Agreement.
16.2 Any amendment and modification to
the Agreement shall not be effective
unless made in accordance
with Article 16.1 above.
ARTICLE 17 COUNTERPARTS OF THE AGREEMENT
The Agreement shall be
executed in Chinese in fifteen (15) originals, with each
party to hold two and the
remaining originals to be submitted to the competent
industrial and commercial
administrative authorities and other relevant
governmental departments.
Each original of the Agreement shall have the equal
legal effect.
ARTICLE 18 MISCELLANEOUS
18.1 CNODC hereby agrees to transfer,
the Transferred Assets owned by it either
directly
or indirectly, to CPEDC and/or its subsidiaries without
any
consideration. All of the parties will make best to cause the
closing
conditions
for all Transferred Assets to be satisfied before 10
December
2005.
18.2 Any matter not covered hereunder
shall be set forth in a supplementary
agreement
by and among the parties which shall be attached hereto as
an
exhibit.
Such supplementary agreement shall not be effective unless
made
in
accordance
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<PAGE>
with
Article 16.1 above.
18.3 After consummation of this
Transaction, CNODC will transfer all of its
equity in
CPEDC to CNPC free of consideration, according to CNPC's
arrangement. PetroChina hereby agrees upon such transfer and also
agrees
to waive
its preemption.
18.4 CNODC and CPEDC shall be
responsible for any tax and expense arising out
of or from
the transfer of Transferred Assets from CNODC and/or its
subsidiaries to CPEDC and/or its subsidiaries in accordance with
the
relevant
laws and regulations.
18.5 Except as provided in Article 18.4
above, each party shall be solely
responsible for any tax imposed on it due to its execution and
performance
of the
Agreement pursuant to the relevant laws and regulations.
18.6 After the Closing Date, CPEDC
will, at the appropriate time, convert part
of its
capital surplus resulted from CNODC's assets transfer to it
and
PetroChina's subscription for its registered capital into its
own
additional
capital stock.
18.7 Non-competition
(1)
Non-competition
After the Closing Date, CNODC and its controlling enterprises
will
not compete with CPEDC Group in the oil/gas exploration,
development, production, pipelines, refining and chemical
businesses
in any overseas region other than Special Regions.
(2)
Pre-emption
Rights
i)
After the
Closing Date, for any assets other than the
Transferred Assets in relation to oil/gas exploration,
development, production, pipelines, refining and
chemical
businesses in any overseas region other than Special
Regions,
owned by CNODC or its controlling companies, CPEDC shall
have
Preemption Rights to such assets after PetroChina becomes
its
shareholder;
ii) After the
Closing Date, subject to the consent by CNODC and
PetroChina, in case of any adjustment to the Special
Regions
which makes the countries/regions where the overseas assets
in
relation to oil/gas exploration, development,
production,
pipelines, refining and chemicals owned by CNODC or its
controlling companies are not covered by the Special
Regions
any longer, CPEDC shall have Preemption Rights to such
assets
after PetroChina becomes its shareholder.
18.8 After the Agreement becomes
effective till the Closing Date, CNODC shall
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<PAGE>
disclose
any newly obtained information about any relevant
overseas
oil/gas
exploration, development, production, pipelines, refining
and
chemical
businesses other than Special Regions, to PetroChina as soon
as
possible,
after CNODC has indicated any substantial intention for
acquisition, without any breach of CNODC's obligations under any
contract
signed by
it.
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[Signature Page]
China National Oil and Gas
Exploration and Development Corporation (seal)
Authorized representative:
Wang Dongjin
Central Asia Petroleum
Company Ltd. (seal)
Authorized representative: Wu
Enlai
PetroChina Company Limited
(seal)
Authorized representative:
Wang Guoliang
China Petroleum Exploration
& Development Company Ltd. (seal)
Authorized representative: Wu
Dongshan
16
<PAGE>
Exhibit 1:
PROJECTS
OWNED BY CPEDC GROUP AFTER CLOSING OF
