Exhibit 4.17
DATED 31 October 2004
BETWEEN
CHINA PETROLEUM CORPORATION
AND
CHINA PETROLEUM & CHEMICAL CORPORATION
----------------------------------
2004 AGREEMENT ON
ADJUSTMENTS TO
RELATED PARTY TRANSACTIONS
----------------------------------
THIS AGREEMENT is made on the 31st day of October 2004 in Beijing:
BETWEEN
China Petrochemical Group (hereinafter referred to as "Party A"), a
state-owned enterprise established and legally subsisting under the
laws of the People's Republic of China (the "PRC"), fully
representing its related subsidiaries ;
China Petroleum & Chemical Corporation (hereinafter referred to as "Party
B"), a corporation established and legally subsisting under the laws
of the PRC, fully representing its related subsidiaries.
Party A and Party B are collectively referred to herein as the "Parties" and
individually as a "Party".
WHEREAS:
D. Party B is a listed company listed on stock exchanges of Shanghai, Hong
Kong, New York and London; Party A is the controlling shareholder of
Party B. The Parties had entered into a series of agreements on connected
transactions on 3 June 2000 and subsequently entered into a series of
adjustment or supplemental agreements (collectively referred to as the
"Existing Connected Transaction Agreements"). Provisions in relation to
the conditions of the connected transactions for the mutual supply of
products, production and engineering construction (including the public
utilities projects) services, lease of the land use rights and lease of
properties, etc. made between the Parties (including the respective
subsidiaries of the Parties) are set out in the Agreements on Connected
Transactions.
E. Party B proposes to enter into an asset aquisition agreement with Party A
for the aquisition of the core assets and businesses of ethylene,
synthetic fibre monomer and polymer owned by China Petrochemical
Corporation Tianjin Company, the assets and businesses of synthetic fibre
monomer and polymer owned by SINOPEC Luoyang Petrochemical Engineering
Corporation (including a 55% equity interests of Luoyang Petrochemical
Polypropylene Co., Ltd.), the entire asset and businesses of the Power
Assets Business Department of SINOPEC Guangzhou Petrochemical Engineering
Corporation, the oil refining plants of SINOPEC Maoming Refining &
Chemical Co., Ltd. and a 93.51% equity interests of SINOPEC Zhongyuan
Company which are owned by Party A.
F. Party B proposes to enter into an asset aquisition agreement with Party A
for the aquisition of the following equity interests and assets directly
or indirectly owned by Party A: 81% equity interests of Hunan Jianchang
Petrochemical Co., Ltd., 50% equity interests of Beijing Aoda
Petrochemical Technology Development Center, 60% equity interests of
Shanghia Leader Catalyst Co., Ltd. and the major assets of SINOPEC
Changling Company Catalyst Plant, SINOPEC Qilu Petrochemical Co. Catalyst
Plant, Ltd. Petrochemical Co., Ltd., SINOPEC Technology Development
Company, Head Office of China Petrochemical Corporation Shanghai
Petrochemical Research Institute, the experimentation factory of SINOPEC
Shanghai Research Institute of Petrochemical Technology and SINOPEC
Nanjing Catalyst Co., Ltd.
G. Party B proposes to enter into an asset aquisition agreement with Party A
for the aquisition of the 1,023 gas stations and 54 oil depots of Party A
and its subsidiaries.
H. Party B proposes to enter into an asset sales agreement with Party A for
the sale of the downhole operation assets and businesses owned by eight
oilfield subsidiaries or branch companies of Party B and its subsidiaries
to Party A, namely SINOPEC Shengli Oilfield Co., Ltd., SINOPEC Central
China Company, SINOPEC Henan Oilfield Company, SINOPEC Jianghan Oilfield
1
Company, SINOPEC Jiangsu Oilfield Company, SINOPEC North China
Company, SINOPEC East China Company and SINOPEC Southwest China
Company.
I. The aforementioned assets aquisition and sale agreements are collectively
referred to as the "Sale and Acquisition Agreements".
J. Upon the completion of the sale and acquisition transaction mentioned
above, new connected transactions (the "Additional New Connected
Transactions") in relation to the lease of the land use rights and the
properties will arise between Party A and Party B (including the
respective subsidiaries of the Parties), the Parties will make certain
adjustments to the existing connected transactions between them.
The Parties hereby agree on the following adjustments to connected
transactions:
1. Party A agrees to increase the land leased to Party B by a total of
8,888,498.51 square meters according to the Land Use Rights Leasing Agreement
after the completion of the sale and acquisition transaction; Party B agrees
to increase the rental payable to Party A by RMB 110,356,761.10 per year.
Party A agrees to increase the area of the properties leased to Party B by a
total of 15,114 square meters pursuant to the Properties Leasing Agreement
after the completion of the sale and acquisition transaction whereas Party B
agrees to increase the rental payble to Party A by RMB 1,350,000.00 per year.
The Parties agree that apart from the provision on effective date and the
appendixes, the remaining clauses of the Land Use Rights Leasing Agreement,
the Properties Leasing Agreement and their adjustment and supplemental
agreements will be applicable to matters in relation to the lease of land and
properties mentioned above. The lease of the land use rights and properties
aforementioned will commence on the effective date of this Agreement.
2. The consideration for the lease of land use rights and properties is
determined based on the leased area according to the normal commercial
practice and through fair and reasonable negotiations of the Parties and based
on the prices not exceeding the market price. With reference to the existing
rentals for lease of land use rights and properties under the Existing
Connected Transactions Agreements, the locations, areas and the usage of the
related land and buildings, the consideration determined is reasonable,
justified without prejudice to the interests of Party B and the minority
shareholders.
3. The Parties agree that the agreements entered into between the Parties
(including the respective subsidiaries of the Parties) or the provisions
contained therein which are applicable to the Additional New Connected
Transactions under this Agreement will be automatically terminated following
this Agreement coming into effect.
4. The Parties agree that upon completion of the sale and acquisition
transaction, all the continuing connected transactions will be operated in
line with the market practice so that win-win and market-oriented pricing
principles as well as principles of fairness, reasonableness and justice will
be upheld and the interests of the minority shareholders will not be
prejudiced.
5. The subsidiaries of Party A and Party B as stated in this Agreement include
all the respective subsidiaries, branches and other units as well as any
companies or entities which hold 30% or above interests or voting rights or
have control over the board of directors or are under direct or indirect
control of the aforementioned entities.
6. This Agreement will come into effect upon its execution by the
representatives of the Parties and completion of the related sales and
acquisations.
2
IN WITNESS WHEREOF, this Agreement has been duly executed by the properly
appointed representatives of the Parties on the day and year first written
above.
For and on behalf of :
China Petrochemical Corporation (Sealed)
By: /s/ Xxxx Xxxxxxx
--------------------------------------------------
Name: Xxxx Xxxxxxx
------------------------------------------------
Legal Representative or Authorized Representative:___
For and on behalf of:
China Petroleum & Chemical Corporation (Sealed)
By: /s/ Xxxx Xxxxxx
--------------------------------------------------
Name: /s/ Xxxx Xxxxxx
------------------------------------------------
Legal Representative or Authorized Representative:___
3
