Exhibit 4.2
English Translation of Chinese Original
RISK OPERATION SERVICE BUSINESS ASSETS TRANSFER AGREEMENT
By and between
CHINA NATIONAL PETROLEUM CORPORATION
And
PETROCHINA COMPANY LIMITED
August 23, 2007
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS..................................................... 3
ARTICLE 2 DELIVERY OF ASSETS.............................................. 5
ARTICLE 3 TRANSFER OF ASSETS.............................................. 5
ARTICLE 4 CLOSING......................................................... 5
ARTICLE 5 CLOSING CONDITIONS.............................................. 6
ARTICLE 6 POST-EXECUTION OBLIGATIONS OF PARTY............................. 7
ARTICLE 7 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARTY A............ 7
ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF PARTY B....................... 8
ARTICLE 9 EMPLOYEES....................................................... 8
ARTICLE 10 ACCESS TO INFORMATION........................................... 8
ARTICLE 11 FORCE MAJEURE................................................... 8
ARTICLE 12 COMMUNICATIONS.................................................. 9
ARTICLE 13 GOVERNING LAW AND DISPUTE RESOLUTION............................ 9
ARTICLE 14 OTHER PROVISIONS................................................ 10
EXHIBIT 1 FURTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARTY A.... 11
EXHIBIT 2 SCOPE OF THE RISK OPERATION SERVICE BUSINESS ASSETS............. 12
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RISK OPERATION SERVICE BUSINESS ASSETS TRANSFER AGREEMENT
This Risk Operation Service Business Assets Transfer Agreement (this
"Agreement") is entered into this 23rd day of August, 2007 in Beijing by and
between CHINA NATIONAL PETROLEUM CORPORATION ("Party A"), with its enterprise
legal person business license number being 1000001001043 and registered address
being at Liupukang, Xicheng District, Beijing, and PETROCHINA COMPANY LIMITED
("Party B"), with its enterprise legal person business license number being
1000001003252 and registered address being at 16 Andelu, Dongcheng District,
Beijing.
Whereas,
(i) Party B is a joint stock company incorporated on November 5, 1999
under the laws of the People's Republic of China (the "PRC") , and its
H shares and ADSs are currently listed and traded on the Stock
Exchange of Hong Kong Limited and on the New York Stock Exchange, Inc.
respectively. Party A holds 88.21% of the share capital of Party B and
therefore is the controlling shareholder of Party B; and
(ii) Party A agrees to transfer to Party B, and Party B agrees to purchase
from Party A, the assets (including liabilities) of Party A's risk
operation service business, subject to the terms and conditions of
this Agreement.
Party A and Party B hereby reach agreement as follows:
ARTICLE 1 DEFINITIONS
1.1 For purposes of this Agreement, unless the context otherwise
specifies, terms in this Agreement and the exhibits hereto shall have
the meanings set forth below:
"Agreement" or refers to this Risk Operation Service Business Assets
this "Agreement" Transfer Agreement dated August 23, 2007 by and between the
parties hereto;
"Party A" refers to China National Petroleum Corporation and its
subsidiaries, branches and other affiliated entities;
unless otherwise required by the context, the term "Party
A" shall include all the assets and business of Party A;
"Party B" refers to PetroChina Company Limited and its subsidiaries,
branches and other affiliated entities; unless otherwise
required by the context, the term "Party B" shall include
all the assets and business of Party B;
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"Risk Operation refers to the full-range risk operation services discussed
Service Business" hereunder provided to Party B's development and production
operation in the hard-to-exploit blocks, at Party A's
expense and risk, by such second-level entities of Xinjiang
Petroleum Administration Bureau as less-profitable oilfield
development companies, cooperative development and oil
extraction operation areas, and the Oil and Gas Cooperative
Development Company of Tuha Petroleum Exploration and
Development Headquarters;
"Risk Operation refers to the assets to be transferred hereunder, which are
Service Business generated by the Risk Operation Service Business of such
Assets" second-level entities of Xinjiang Petroleum Administration
Bureau as less-profitable oilfield development companies,
cooperative development and oil extraction operation areas,
and the Oil and Gas Cooperative Development Company of Tuha
Petroleum Exploration and Development Headquarters,
including the assets as set forth in Exhibit 2 hereto;
"Closing" has the meaning set forth in Article 4 hereof;
"Closing Date" the later of August 23, 2007, or the date on which all the
conditions specified in Article 5 below have been
satisfied;
"Base Date" refers to December 31, 2006, the date on which the assets
appraisal is conducted for the purposes of the transfer
contemplated hereunder;
"Audit Reports" refers to the Special Audit Report on Oil and Gas
Cooperative Development Company of Tuha Oil Exploration and
Development Headquarters (Zhong Xxxx Xxx [2007] Pu Zi No.
04212) and the Special Audit Report on the Risk Operation
Service Business of Xinjiang Petroleum Administration
Bureau (Zhong Xxxx Xxx [2007] Pu Zi No. 04213) in each
case, dated June 20, 2007 and issued by Zhongtianyun
Accountants Limited for the purposes of the transfer
contemplated hereunder; and
"Appraisal Report" refers to the Assets Appraisal Report (Zhong Qi Hua Ping
Bao Zi(2007) No. 195-1 and No. 195-2) dated June 20, 2007
issued by China Enterprise Appraisal Co., Ltd.
1.2 Unless otherwise specified herein, for the purposes of this Agreement,
(a) All references herein to a party shall include the successors
thereof;
(b) All references herein to Articles or Schedule shall refer to
Articles or Schedules of this Agreement;
(c) This Agreement shall be construed to refer to this Agreement as
extended, amended, modified or supplemented from time to time;
(d) Headings used herein are for convenience only, and shall not in
any way affect the meaning or performance of this Agreement; and
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(e) Any subsidiary or affiliated entity of Party A shall not include
Party B or any of its subsidiaries or affiliated entities.
ARTICLE 2 DELIVERY OF ASSETS
2.1 Subject to the terms and conditions of this Agreement, Party A shall
deliver to Party B, and Party B shall take delivery from Party A of,
the Risk Operation Service Business Assets and any and all the
existing and future rights attached thereto, in reliance on Party A's
relevant representations, warranties and covenants contained herein.
2.2 The Risk Operation Service Business Assets are described in greater
detail in Exhibit 2 hereto.
ARTICLE 3 TRANSFER OF ASSETS
The parties hereto agree that the consideration for the Risk Operation
Service Business Assets shall be RMB 1,652,279,200, as determined based on the
Appraisal Report dated 31 December, 2006 prepared by China Enterprise Appraisal
Co., Ltd. In the event the net assets generated by the Risk Operation Service
Business for the period from 1 January 2007 to 31 August 2007 as shown in the
management accounts for that period is higher than the value of the net assets
of the Risk Operation Service Business as at 31 December 2006, Party B shall pay
such difference to Party A in cash.
ARTICLE 4 CLOSING
4.1 Date of Closing
The closing of the assets transfer contemplated hereunder (the
"Closing") shall occur on the later of August 23, 2007 or the date on
which all the conditions set forth in Article 5 herein below are
satisfied (either the "Closing Date").
4.2 At the Closing, Party A shall:
4.2.1 deliver to Party B:
(i) the Risk Operation Service Business Assets and any and all
the certificates, deeds, operating licenses, title documents
and other instruments that evidence any and all the title
and operating rights to and in the Risk Operation Service
Business Assets are vested with Party B, including but not
limited to, land use certificates, building title
certificates, accounting books and records, property
insurance policies and receipts for insurance premium
payment;
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(ii) any and all the third party consents necessary for Party A's
transfer to Party B of the Risk Operation Service Business
Assets, including but not limited to, consents from relevant
creditors and consents from relevant governmental
authorities; and
(iii) any and all the effective contracts, books, certificates,
records and other instruments (including financial records)
possessed or controlled by Party A in connection with the
Risk Operation Service Business Assets, and
4.2.2 allow Party B to take possession of the Risk Operation Service
Business Assets.
4.3 Party B shall obtain the Risk Operation Service Business Assets as
from the Closing Date (inclusive). As from the Closing Date, Party B
shall become the sole owner of the Risk Operation Service Business
Assets and have all the operating rights in and to the Risk Operation
Service Business Assets.
4.4 Unless otherwise specified herein, any and all the profits, interests,
creditor's rights, debts and other rights and obligations generated by
the Risk Operation Service Business Assets prior to the Closing Date
shall be exercised and performed by Party A.
4.5 In case Party A fails to fully comply with Section 4.2 above, Party B
may elect to consummate the Closing to the extent practicable without
any prejudice to any other remedies and rights available to it under
this Agreement and otherwise.
ARTICLE 5 CLOSING CONDITIONS
5.1 The Closing shall be subject to the satisfaction of all the following
preconditions:
(a) Party B has completed its due diligence with respect to the
status of the Risk Operation Service Business Assets;
(b) Party A has obtained from its creditors and any other relevant
third parties any and all the necessary consents for Party A's
transfer of the Risk Operation Service Business Assets to Party
B;
(c) there has been no material adverse change to the operation or
technical performance of the Risk Operation Service Business; and
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(d) As at the Closing Date, Party A's representations, warranties and
covenants contained herein shall remain true, accurate, complete
and effective.
5.2 The parties hereto shall make all reasonable efforts to ensure that
all the conditions set forth in Section 5.1 above will have been
satisfied by August 23, 2007. Where any condition set forth in Section
5.1 fails to be satisfied by August 23, 2007 for any reason on the
part of Party A, Party B shall have the right to terminate this
Agreement at its discretion.
5.3 Each of the parties hereto agrees that where any regulatory authority
in the jurisdiction in which its shares are listed and relevant PRC
governmental authorities raise certain conditions in order to approve
the transfer of the Risk Operation Service Business Assets as
contemplated hereunder, the parties will negotiate corresponding and
appropriate amendments to this Agreement and other relevant Closing
conditions. Where no agreement fails to be reached through such
negotiations and the performance of this Agreement will result in
either Party A or Party B violating any PRC law and/or relevant
listing rules, either Party A or Party B, as the case may be, shall
have the right to terminate this Agreement at its discretion.
ARTICLE 6 POST-EXECUTION OBLIGATIONS OF PARTY
6.1 Party A undertakes that it will use its best efforts to provide Party
B with any and all materials and assistance in connection with the
operation and maintenance of any Risk Operation Service Business
reasonably requested by Party B.
6.2 Without the consent of Party B, Party A may not make use of or
disclose or release to any third party any information relating to any
Risk Operation Service Business Assets except where the information is
otherwise available in the public domain or where disclosure is
required by the orders of a court having competent jurisdiction or the
relevant regulatory authorities.
ARTICLE 7 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARTY A
7.1 Party A hereby makes the representations, warranties and covenants in
accordance with the terms set forth under Exhibit 1 ("Warranties") to
Party B, and acknowledges that the execution by Party B of this
Agreement is based on the reliance of Party B on such Warranties.
7.2 Each Warranty of Party A set forth in Exhibit 1 shall be severable and
independent, and none of other provisions in this Agreement or the
exhibits hereto may limit such Warranties.
7.3 Party A hereby further undertakes to indemnify Party B in all for and
against all losses or liabilities, including but not limited to, the
decrease of the value of
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any Risk Operation Service Business Assets, arising from breaches of
any Warranties by Party. In the event of any breach by Party A of
Article 1 or 2 of Exhibit 1 hereto, Party B shall have the right to
terminate this Agreement.
7.4 Party A shall promptly inform Party B in writing of any violations of
the Warranties or any matters not consistent with the Warranties it
becomes aware of before or after the Closing.
ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF PARTY B
Party B hereby represents and warrants to Party A that from the date of
this Agreement to the Closing Date:
8.1 Party B is a company limited by shares duly organized, validly
existing and in good standing under the laws of the PRC and has
statutory corporate rights.
8.2 Party B has all necessary power and authority to enter into and
perform this Agreement.
8.3 The execution and performance of this Agreement by Party B does not
violate its articles of association or any applicable laws or
regulations.
8.4 This Agreement constitutes a valid and binding obligation of Party B.
ARTICLE 9 EMPLOYEES
Party B may conduct its employment management in its own discretion for the
purpose of continuing operation of the Risk Operation Service Business Assets,
including employing the former employees engaged by Party A for the Risk
Operation Service Business Assets.
ARTICLE 10 ACCESS TO INFORMATION
From the date of this Agreement, Party A shall afford Party B and any
persons authorized by Party B and shall cause such person to be afforded access
to all materials regarding the Risk Operation Service Business Assets, and all
books, title instruments, contracts, records and any other documents regarding
the Risk Operation Service Business Assets, and the executive officers and
employees of Party A shall promptly furnish such materials and explanations with
respect thereto to any such persons.
ARTICLE 11 FORCE MAJEURE
If a party has been prevented from performing all or part of its
obligations provided in this Agreement because of an event of Force Majeure,
including earthquake, typhoon, flood, fire, war and any governmental
interference, or change of circumstances, it shall immediately notify the other
Party in writing, and shall provide details of the event of Force Majeure or
change of circumstances, as well as valid evidence supporting its inability to
perform all or part of its obligations hereunder or the reasons for the delayed
performance, within seven (7) days following the occurrence of such an event.
The parties shall negotiate to terminate this Agreement, partially release or
delay the performance of the affected obligations, according to the influence of
such an event on the performance of this Agreement.
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ARTICLE 12 COMMUNICATIONS
Notices or other communications required to be given by any party pursuant
to this Agreement shall be written in Chinese and sent by personal delivery or
in registered mail or facsimile to the address/fax number of the other party set
forth below. The dates on which notices shall be deemed to have been effectively
given shall be determined as follows:
(i) Notices given by personal delivery shall be deemed effectively given
on the date of personal delivery;
(ii) Notices given in a registered mail shall be deemed effectively given
on the seventh day after the date on which they were mailed (as
indicated by the postmark), excluding public holidays;
(iii) Notices given by facsimile shall be deemed effectively given upon the
completion of transmission. The party sending notices shall provide
the electronic answerbacks produced by the facsimile machine it has
received for the notices it sends to the other party in order to prove
the complete transmission of such notices to the other party.
If to Party A:
China National Xxxxxxxxx Xxxxxxxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxxx 000000
Fax: 000-0000 0000
If to Party B:
PetroChina Company Limited
00 Xxxx Xxxx, Xxxxxxxxx Xxxxxxxx
Xxxxxxx 000000
Fax: 000-0000 0000
ARTICLE 13 GOVERNING LAW AND DISPUTE RESOLUTION
13.1 This Agreement shall be governed by and construed in accordance with
the laws of the PRC.
13.2 Any dispute arising from, out of or in connection with this Agreement
shall be settled through friendly consultations between the parties.
If the dispute cannot be settled through consultations, either party
may refer such dispute to the Beijing Arbitration Commission. Such
dispute shall be finally settled by arbitration in accordance with the
then effective rules of arbitration of the Beijing Arbitration
Commission. The arbitral award is final and binding upon
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both parties.
ARTICLE 14 OTHER PROVISIONS
14.1 The parties shall be solely responsible for their own costs and
expenses arising from the transfer of the Risk Operation Service
Business Assets hereunder according to the applicable laws.
14.2 Upon the Closing of the transfer of the Risk Operation Service
Business Assets, except with respect to the surviving company, Party A
shall finish all required change or cancellation formalities with the
competent administration of industry and commerce and tax authorities.
14.3 The invalidity, illegality or unenforceability in any respect of any
term or other provision of this Agreement may not affect or prejudice
the legality, validity and enforceability of all other terms and
provisions of this Agreement.
14.4 This Agreement together with any documents referred to herein shall
constitute an entire agreement between the parties hereto. The parties
clearly represent that any amendment to this Agreement shall be
invalid unless in writing.
14.6 This Agreement shall have come into effect upon the execution and
affixing seals by the representatives of each party.
Party A
CHINA NATIONAL PETROLEUM CORPORATION
Authorized representative: Wen Qingshan (signature and seal of Party A)
Party B:
PETROCHINA COMPANY LIMITED
Authorized representative: Xxxx Xxxxxxxx (signature and seal of Party B)
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EXHIBIT 1 Further Representations, Warranties and Covenants of Party A
1. CORPORATE MATTERS
1.1 Party A is wholly state-owned company duly organized and validly existing
under the laws of the PRC and has full and legal rights to own its assets
and operate its business.
1.2 All the copies of the business license, articles of association and other
documents of Party A provided to Party B are accurate and complete, and
conform with the original copies of such documents.
1.3 Party A has all necessary power and authority to execute this Agreement and
perform its obligations hereunder.
1.4 This Agreement and any other documents to be executed by Party A pursuant
to this Agreement shall constitute the valid and binding obligations of
Party A, which are enforceable in accordance with the relevant terms.
2. APPROVALS
2.1 The transfer of the Risk Operation Service Business Assets by Party A to
Party B shall be conducted in accordance with the PRC law.
2.2 Upon the Closing Date, all governmental approvals required for the transfer
of the Risk Operation Service Business Assets, including but not limited
to, the required approval for the change of land use rights certificates
and title certificates, shall have been obtained, and Party A does not
receive any notice that such approvals have been cancelled.
2.3 Party A has been granted all necessary authorization for the execution and
performance of this Agreement.
2.4 The execution and performance of this Agreement does not violate any
applicable laws or regulations.
3. OWNERSHIP AND CONDITIONS OF ASSETS
3.1 Except as otherwise indicated, none of the Risk Operation Service Business
Assets is subject to any encumbrance of any form. In the event of any legal
proceedings in respect of financial guarantees or any other disputes
arising prior to the Closing Date, such proceedings or disputes shall be
assumed by the appropriate unlisted companies, i.e. Xinjiang Petroleum
Administration Bureau or Tuha Petroleum Exploration & Development
Headquarters. Details regarding the Risk Operation Service Business Assets
set forth in Exhibit 2 are true, complete and accurate in all respects.
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EXHIBIT 2 Scope of the Risk Operation Service Business Assets
The Risk Operation Service Business Assets cover the principal business of such
second-level entities of Xinjiang Petroleum Administration Bureau as
less-profitable oilfield development companies, cooperative development and oil
extraction operation areas, and the Oil and Gas Cooperative Development Company
of Tuha Petroleum Exploration and Development Headquarters, including but not
limited to, assets relating to the Risk Operation Business and the assets,
liabilities and interests associated therewith, which in particular, include the
following assets:
1. such assets as the buildings and other structures, cash, bank deposits and
accounts, inventories, receivables, machinery and equipment and ancillary
devices and facilities owned by Party A or any entity forming a part of the
Risk Operation Service Business;
2. the rights and obligations under the contracts and agreements (including
any amendments and supplements thereto) executed by Party A in respect of
the Risk Operation Service Business Assets, including title to buildings
and guarantees with respect to such contracts and agreements;
3. if transferrable in accordance with applicable laws, all the rights under
any and all the permits, licenses, approval certificates, certificates,
power of attorney, and any other similar documents possessed or owned by
Party A or any entity forming a part of the Risk Operation Service
Business;
4. claims, set-off rights or any other similar rights of Party A or any entity
forming a part of the Risk Operation Business Assets, in each case,
relating to or arising from the Risk Operation Service Business Assets; and
5. business records, accounting records, operating records, operating data,
operating statistical data, manuals, maintenance handbooks, training
handbooks and relevant technical records, technical documentation,
technical data, technical drawings, technical handbooks, technical books,
project research and development records and any other know-how, whether
saved in written, electronic or any other media.
Any other assets set forth in the Appraisal Report. The parties hereto agree
that where they have any disagreement on the understanding of the Risk Operation
Service Business Assets set forth in this Schedule, the contents of the
Appraisal Report shall prevail.
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