EX-4.17.3 5 tm2039442d3_ex4-173.htm EXHIBIT 4.17.3

Exhibit 4.17.3

China Oil & Gas Pipeline Network Corporation

AND

Sinomart KTS Development Limited

Agreement on Cash Payment to Purchase 100%

Equity in Sinopec Yu Ji Company

July 2020

Table of contents
1.	Target Assets	2
2.	Transaction consideration and payment method	2
3.	Profit and loss during the Transition Period	3
4.	Conditions precedent	3
5.	Closing and handover	4
6.	Arrangement on handover	5
7.	Representations and warranties of the Seller	6
8.	Representations and warranties of the Purchaser	7
9.	Liabilities for breach of the Agreement	8
10.	Third-party claims and administrative penalties	8
11.	Announcement	8
12.	Confidentiality	9
13.	No assignment	10
14.	Further assurance	10
15.	Taxes and expenses	10
16.	Notice	11
17.	Conflict with other agreements	11
18.	Waiver, rights and remedies	11
19.	Texts	12
20.	Effective date and amendment	12
21.	Invalidity	12
22.	Jurisdiction and arbitration	12
23.	Force majeure	13

This agreement (“Agreement”) is entered into by and between the following parties in Beijing of People’s Republic of China (“PRC”) on July 21, 2020.

The Purchaser:

Name: China Oil & Gas Pipeline Network Corporation (“PipeChina”)

Legal Representative: ZHANG Wei

Registered Address: Room 08-10, 6/F Block A, 5 Dongtucheng Road, Chaoyang District, Beijing

The Seller:

Name: Sinomart KTS Development Limited

Legal Representative: YE Zhijun

Registered Address: 34/F, Citicorp Centre, 18 Whitfield Rd, Causeway Bay, Hong Kong

Each defined term in the Agreement shall have the meaning ascribed to it as set forth in the Appendix 1 to the Agreement.

WHEREAS:

(A)

As of the date hereof, the registered capital of the Purchaser is RMB20 billion, and its scope of business includes pipeline transportation; storage services; equipment import; technology import and export; technology research; informatization research and application; technology consulting, technology services, technology transfer, technology promotion. 100% of registered capital in Purchaser is held by the State Council.

(B)

As of the date hereof, the Seller is a limited liability company duly incorporated and validly existing under the laws of Hong Kong, and a wholly-owned subsidiary of Sinopec Kantons Holdings Limited (a Hong Kong listed company), and holds 100% of equity interests in Sinopec Yu Ji Pipeline Company Limited (the “Target”).

(C)	As of the date hereof, the Target is a limited liability company established and validly existing under the laws of the PRC with a registered capital of RMB1,000,000,000, 100% equity interests of which is held by the Seller.

(D)	Following the principle of voluntariness, and subject to and pursuant to the terms and conditions herein, the Purchaser intends to purchase, and the Seller intends to sell to the Purchaser, 100% equity interests of the Target held by the Seller (the “Transaction”).

The Seller and the Purchaser shall be referred to hereinafter each as a “Party,” and collectively, the “Parties.”

NOW, THEREFORE, in consideration of the purpose of this Transaction, based on friendly negotiation and to achieve mutual benefits, the Parties have reached the arrangement as the following:

1.	Target Assets

1.1	The target asset of the Transaction is 100% equity interests in the Target, other than the Excluded Assets set forth under Article 1.2 of this Agreement (the “Target Assets”).

1.2

As contemplated in the Transaction, certain assets owned by the Target (including without limitation the Qingfeng Line of Yulin-Jinan Pipeline, Office Building Properties, and ancillary facilities of Henan Management Office, collectively hereinafter the “Excluded Assets”) are not included in the scope of the appraisal for 100% equity interests in the Target and, as of the date hereof, the Target has entered into an agreement with certain Third Party in relation to the sale of the Excluded Assets (the “Excluded Assets Sale Agreement”), pursuant to which the Target will receive consideration of RMB179,139,100 for the sale of the Excluded Assets (the “Sale Price of the Excluded Assets”) prior to the Closing of the Transaction.

2.	Transaction consideration and payment method

2.1	According to the Valuation Report, the appraised value of the Target Assets with respect to the Transaction is RMB3,220,388,400.

2.2

After negotiation, the Parties agreed that the Transaction Consideration to be paid by Purchaser for the purchase of the Target Assets under this Transaction is RMB3,220,388,400, provided, that the final consideration to be paid for the Target Assets shall be its appraised value with the approval/filing procedures performed in accordance with PRC laws and regulations.

2.3	The Parties hereby agree that the Purchaser shall to pay the Transaction Consideration to the Seller in cash to purchase 100% of equity interests in the Target.

2.4

The Parties hereby agree that, for the Transaction Consideration, the Purchaser shall pay 90% of the aggregate Transaction Consideration under the Transaction by October 23, 2020 (inclusive), as well as the interest thereof as calculated at the rate of demand deposits of the bank for the same period from October 1, 2020 until the payment receipt date. The Purchaser shall pay the remaining 10% of Transaction Consideration within 15 Business Days from the issuance of the Closing Audit report as set forth in Article 3.2, as well as the interest thereof as calculated at the rate of the demand deposits of the bank for the same period from October 1, 2020 until the payment receipt date. If, due to reasons with respect to the governmental review and approval, the Purchaser has not completed the payment by the deadline above, the deadline for payment shall be postponed accordingly, but under no circumstances shall such postponement exceed 5 Business Days.

2.5	Unless otherwise notified in writing, the Transaction Consideration payable under the Transaction shall be paid by the Purchaser pursuant to Article 2.4 hereunder to Seller’s designated bank account (details as set out in Appendix 4).

3.	Profit and loss during the Transition Period

3.1	The Transition Period shall refer to the period from the Valuation Date (exclusive) to the Closing Date (inclusive) under this Agreement.

3.2

The Parties hereby agree that, within 60 Days from the Closing Date, the Parties shall perform an audit on the Target and have an auditor’s report issued (“Closing Audit”) to determine the profit and loss of the Target during the Transition Period (for the avoidance of doubt, such profit and loss shall include the profit and loss of the Target Assets during the Transition Period, the Sale Price of the Excluded Assets and profit and loss incurred from the sale of Excluded Assets). Such Closing Audit shall be completed by an accounting firm with securities and futures business qualifications jointly appointed by the Parties, the audit fees for which shall be borne by the Parties at a 50-50 split.

Such profit and loss mentioned above shall be enjoyed and borne by the Seller, with each amount to be determined by the Closing Audit report and to be paid in cash. The payment shall be made within 15 Business Days after the issuance date of the Closing Audit report pursuant to Article 3.2 of this Agreement.

4.	Conditions precedent

4.1	The Closing is conditioned upon the following Conditions Precedent being satisfied or waived by applicable parties/governmental authorities (if applicable):

(1)

The representations, covenants and warranties made by the Parties on the Execution Date shall have remained true, accurate and complete, without misleading statements, misrepresentations and material omissions in all material respects as of the Closing Date;

(2)

The Seller and its sole shareholder Sinopec Kantons Holdings Limited shall have approved the Transaction in accordance with their constitutional document, respectively, and has been approved by the relevant regulatory authorities (including but not limited to the Hong Kong Stock Exchange) in accordance with relevant regulations, such as the Hong Kong Listing Rules;

(3)

The Purchaser shall have approved the Transaction in accordance with its constitutional document;

(4)

Declaration of concentration of business operators in respect of the Transaction shall have been filled and approved;

(5)

The Valuation Report on the Target Assets under this Agreement shall have been approved or filed in accordance with the PRC laws and regulations;

(6)

All other applicable approvals, permits, filings and registrations from or with the relevant authorities with respect to the Transaction shall have been obtained or completed.

For the Conditions Precedent above, the Seller is responsible for condition (2), the Purchaser is responsible for condition (3), and both Parties are responsible for conditions (1), (4) (5) and (6). For the avoidance of doubt, the Condition Precedent to be solely handled by one Party can only be waived by the other Party, provided that conditions (2), (3), (4), (5) and (6) cannot be waived.

4.2

The Parties hereby agree to cause all the Conditions Precedent as set forth under Article 4.1 to be satisfied as soon as practicable prior to the Closing Date. If the satisfaction of any Conditions Precedent applicable to one Party needs the assistance from the other Party, the other Party shall provide such assistance. The Parties shall remain in communication on the matters in relation to each Condition Precedent, and coordinate and solve the problems encountered during this process in a timely manner. After the Execution Date, neither Party shall engage in any conduct with the purpose to prevent or restrict the satisfaction of each Condition Precedent set forth under Article 4.1.

5.	Closing and handover

5.1	The Parties hereby confirm and agree that, the ownership of, and the obligations, responsibilities and risks in relation to, the Target Asset shall be transferred from the Seller to the Purchaser at 24:00 on September 30, 2020 (the “Closing Date”).

5.2

Transfer of Target Assets and relevant responsibilities on the Closing Date. Upon 24:00 on the Closing Date, the Target Assets and the businesses and employees in relation thereto shall be deemed received and lawfully owned by the Purchaser on an “as-is” basis, and the obligations, responsibilities and risks in relation to the Target Assets shall be assumed by the Purchaser. Unless otherwise stipulated hereunder, after the Closing Date (excluding the Closing Date), the obligations, responsibilities and risks in relation to the Target Assets shall no longer be assumed by the Seller.

Within three years after the Closing Date, for any Major Loss(es) incurred by the Purchaser as a result of Third-Party Claims or administrative penalties arising from any violation of the law by the Seller prior to the Closing Date in the operation and management of the Target Assets/Target Companies or any major defect of the Target Assets (except for those have been disclosed to the Purchaser and reflected in the financial accounts, audit reports and Valuation Reports of the Seller and the Target Companies), the Parties shall amicably negotiate a solution in good faith.

5.3

The Parties shall work together to assist the Target to complete the change of the registration with Administration for Market Regulation with respect to the Target Assets within no later than 30 Days from the Closing Date, including but not limited to the completion of procedures of registration of change of shareholders, filing of amendment to articles of association, change of directors, supervisors and senior management and filing with Administration for Market Regulation, change of company’s name (excluding words like “Sinopec”) and other Administration for Market Regulation registration/filing procedures. The Handover obligation under this Agreement shall be deemed to have been completed by Target’s obtaining of a new business license (the “Handover”).

5.4

The Parties hereby agree that the transfer of the employees and other personnel in relation to the Target Assets shall be completed following the general principle of “personnel go with assets (business),” and in accordance with the management memorandum with respect to the transfer of personnel to be entered into as appropriate.

5.5

If the Target Assets have the trademark or logo of the Seller, the use of such Target Assets by the Purchaser after receiving the Target Assets and before such trademark or logo is removed shall not be deemed as infringement to the Seller’s relevant Intellectual Property Rights or goodwill. The Seller shall remove any and all related trademark and logo within six months after the Closing Date. Starting from the Closing Date, any and all legal liabilities arising from the Target Assets (including but not limited to any liability for tort and breach of contract) shall be borne by the Purchaser even if the Target Assets have the trademark or logo of the Seller.

6.	Arrangement on handover

6.1

The Parties hereby agree to cooperate with each other and use their reasonable efforts to prepare, provide and submit all the necessary documents in a timely manner so as to complete all the necessary applications, notices, requests, filings and other documents, and to obtain as soon as practicable all the licenses, consents, approvals and authorizations necessary or applicable to the Closing of this Transaction from all the Third Parties and governmental authorities. For the avoidance of doubt, the Purchaser shall lead and take responsibility for organizing the declaration of concentration of business operators for this Transaction, and the Seller shall cooperate as necessary.

6.2

The Seller undertakes to, during the transition period, provide the Purchaser with all the necessary assistance for the inventory and handover of the Target Assets and personnel, allow the Purchaser’s Representatives, upon reasonable notice, to enter into the entities (and its premises) that manage or operate the Target Assets, and provide necessary information, materials and assistance to the Purchaser.

6.3

In order to secure the smooth handover and operations of the Target Assets and personnel, the proper operations of the business dependent on the Target Assets, and to maintain the quality of the service, so as to avoid Material Adverse Effects on the orderly operation of the Parties’ business, the Seller hereby agrees that, prior to the completion of the handover of the Target Assets, the Target Assets shall be operated in a manner following the Seller’s ordinary course of business, and the Seller shall use commercially reasonable efforts to secure the proper operation of all key assets and prevent any Material Adverse Effects on the Target Assets. If the Seller has knowledge of any incident that may lead to any Material Adverse Effects on the Target Assets, it shall promptly notify the Purchaser and negotiate with the Purchaser within 10 Days upon the occurrence of such incident.

6.4

As of the Execution Date, the Seller is undertaking internal reorganisation of the certain assets, Liabilities and personnel outside the Target Assets. The Parties agree that the Seller shall use reasonable best efforts to complete such internal reorganisation prior to the Closing Date and handover the Target Assets to the Purchaser pursuant to the terms hereof.

6.5	In order to secure the smooth operation and transition of the Target Assets and personnel in relation thereto, the Parties hereby agree to perform their responsibilities respectively to facilitate a smooth Handover.

7.	Representations and warranties of the Seller

7.1	As of the Execution Date and the Closing Date, and immediately prior to the Handover of the Target Assets, the Seller makes the following representations and warranties to the Purchaser that, subject to the disclosure otherwise made hereunder:

(1)

it is a company with limited liability with full civil capacity in accordance with Hong Kong law, with rights, power and legal capacity to enter into this Agreement and perform all the obligations and responsibilities under this Agreement. The execution and performance of the Agreement by the Seller will not conflict with, or violate:

the provisions of its internal constitutional documents and other relevant documents, or any applicable laws, regulations or rules;

ii.

orders, judgments and decrees issued by any court, governmental authorities and regulatory authorities prior to the execution of this Agreement;

iii.

any necessary procedures required by applicable laws and/or binding agreements and documents, except for those not having a Material Adverse Effect on the Purchaser’s operation of the Target Assets.

(2)

it has obtained the necessary licenses, authorizations and approvals for the execution and performance of this Agreement in accordance with the current laws and regulations, and will take all practicable measures to obtain such licenses, authorizations and approvals essential for the performance of the Agreement but not yet obtained.

(3)

all the representations and warranties set forth in Appendix 3.

(4)

the Seller will complete the Closing and Handover as soon as possible in accordance with the terms and conditions hereunder.

(5)

if certain unforeseeable condition occurs to the Seller after the Execution Date but prior to the Closing Date, which will cause any aspects of any representations, warranties and covenants that is material to the financial or operational condition of the Target Assets to become untrue, inaccurate or misleading, the Seller shall give a written notice to the Purchaser within 15 Days after it becomes aware of the above-mentioned changes.

(6)

prior to the completion of the Handover, except for the internal reorganisation in relation to certain assets, Liabilities and personnel outside the scope of Target Assets to be made by the Seller pursuant to Article 6.4 of this Agreement, or the normal provision of depreciation and amortization, depletion, recovery of accounts receivable, settlement of due liabilities, Transferring Construction in Progress into Fixed Assets and other ordinary disposal situations in the process of production and operation, the Seller undertakes that it will not make decisions to implement the following conducts: making material adjustment to the Target Assets, setting up external guarantees on Target Assets, make material business change in relation to Target Assets or adjust principal business, making material adjustment to accounting principles related to the Target Assets (except as required by laws and regulations) and other conducts that will cause Material Adverse Change to the ordinary operation of the Target Assets.

8.	Representations and warranties of the Purchaser

8.1	As of the Execution Date and the Closing Date, and immediately prior to the Handover of the Target Assets, the Purchaser makes the following representations and warranties:

(1)

it is a limited liability company with full civil capacity in accordance with PRC law, with right, power and legal capacity to enter into this Agreement and perform all the obligations and responsibilities under this Agreement. The execution and performance of this Agreement will not conflict with, or violate

the provisions of its internal constitutional documents and other relevant documents, or any applicable laws, regulations or rules;

ii.

orders, judgment and decrees issued by courts, governmental authorities and regulatory authorities before the execution of the Agreement;

iii.

any necessary procedures required by applicable laws and/or binding agreements and documents prior to the Closing Date.

(2)

it has obtained the necessary licenses, authorizations and approvals for the execution and performance of this Agreement in accordance with the current laws and regulations, and will take all practicable measures to obtain licenses, authorizations and approvals essential to the performance of the Agreement but not yet obtained.

(3)

the Purchaser will pay Transaction Consideration subject to the terms and conditions of this Agreement and complete the Closing and Handover as soon as possible.

(4)

it shall complete the Handover as soon as possible pursuant to the terms hereunder.

(5)

if certain unforeseeable condition occurs to the Purchaser after the Execution Date but prior to the Closing Date, which will cause any mater aspect of any representations, warranties and undertakings to become untrue, inaccurate or misleading, the Purchaser shall give a written notice to the Seller within 15 Days after it becomes aware of the above-mentioned changes.

9.	Liabilities for breach of the Agreement

9.1

If any representations and/or warranties made by any Party hereunder contains, in any material aspects, intentional misrepresentations, omission or misleading statements, or is in breach of any covenants made therein, or if any Party is in breach of any agreements or other terms hereunder, such Party shall be deemed to have breached this Agreement, and be responsible to indemnify direct damages incurred by the non-defaulting Party.

9.2

If the Seller refuses to complete the Administration for Market Regulation registration process within the agreed time limit pursuant to the terms of this Agreement, the Seller shall pay an overdue penalty amounting to 0.05% of the Transaction Consideration for the assets failed to be handed over as agreed per day, except for the cases where the delayed handover of the Target Assets is not due to the Seller’s faults (including but not limited to Force Majeure or any reasons due to the Purchaser), provided, that the liabilities to be borne by the Seller as a result of failure to complete handover for any given Target Asset(s) under this article shall not, in aggregate, exceed 1% of the appraised value of Target Assets.

9.3	If the Purchaser fails to pay the Transaction Consideration pursuant to the terms of this Agreement, the Purchaser shall pay an overdue penalty amounting to 0.05% of the overdue consideration to the Seller per day.

10.

Third-party claims and administrative penalties

10.1

Any controversy, dispute and administrative penalty (if any) occurs after the Closing Date that arises from the reasons and facts in relation to the Target Assets/Target before the Closing Date shall be resolved in accordance with the principles under Article 5.2 of the Agreement. If a Party is aware of any litigation, arbitration or controversy raised by a Third Party, it shall promptly notify the other Party and make all reasonable efforts to avoid and mitigate losses.

11.

Announcement

11.1

Without prior consent of the other Party (which shall not be unreasonably withheld or delayed), neither Party (and any of their respective Affiliates) shall publish any announcement or issue any circular regarding the existence of the Agreement (or any other transaction document) or its subject matters.

11.2

If the laws or a stock exchange with appropriate jurisdiction or any regulatory or other supervisory institutions or authorities require (regardless of the validity of such requirements) the issuance of any notice, announcement or circular, the restrictions under Article 11.1, Article 12.1 and Article 12.5 shall not be applied.

12.

Confidentiality

12.1

The information provided by the Party of the Agreement who owns the information (the “Provider”) to the other Party (the “Recipient”) in accordance with this Agreement, including but not limited to any material related to the Target Assets or terms and relevant negotiations under this Agreement and other transaction agreements (hereinafter collectively as “Confidential Information”), shall only be used by the Recipient and its personnel for the purpose of this Agreement. Except as otherwise provided in this Agreement, for any Confidential Information provided by the Provider, the Recipient and its personnel who are aware of the Confidential Information shall not directly or indirectly provide, disclose or otherwise transfer to any Third Party, or permit Third Party to use, or provide any opinion or suggestion to any Third Party using, the Confidential Information without written consent of the Provider. In this Article, the “Third Party” refers to any natural person, legal person or other organizations other than the Parties to the Agreement, other than the Affiliates of the Parties.

12.2

Confidential Information provided or disclosed by the Provider to the Recipient shall only be disclosed by the Recipient to certain of its designated employees for the purpose of the performance of this Agreement, and such disclosure shall be made only within the scope required for such performance, provided, that the Recipient shall not disclose any Confidential Information to such employees without taking all reasonable precautions, which includes but not limited to notifying the confidential nature of the information to be disclosed to such employees and have such employees make confidential commitments as at least strict as the confidential obligations of the Agreement, so as to prevent such employees from using Confidential Information for personal interests or making any unauthorized disclosures to any Third Parties. Any violation of the confidentiality obligations by the Recipient’s employees shall be deemed as the violation of the confidential obligations by the Recipient.

12.3

Where the Recipient’s lawyers, accountants, contractors and consultants need to know the Confidential Information to provide professional assistance, the Recipient may disclose Confidential Information to such parties, provided that it shall require the above-mentioned parties to enter into confidential agreements or to perform confidential obligations in accordance with relevant professional ethical standards.

12.4

If the securities regulatory rules of the place(s) where the Company’s shares are listed, or relevant governmental or regulatory authorities require the Recipient to disclose any Confidential Information, the Recipient may disclose within the scope required by such securities regulatory rules or governmental or regulatory authorities without being subject to liabilities hereunder, provided, that the Recipient shall immediately notify the information to be disclosed to the Provider in writing so that the Provider may take necessary protective measures, and such notification shall be made to the extent possible before the information is disclosed. The Provider shall cooperate to provide to the Recipient the materials and information needed for the purpose of publishing announcements or circulars.

12.5	The term of the confidential obligations under this Article is three years.

12.6	The confidential obligations under this Article do not apply to the following information:

(1)

Information that is publicly available when disclosed by one Party, or becomes publicly available after the disclosure (other than due to the negligence of the Recipient or its employees, lawyers, accountants, contractors, consultants or other personnel);

(2)

Information was, as proved by written evidence, already known by the Recipient upon the disclosure by the Provider, which did not come directly or indirectly from the Provider;

(3)

Information was, as proved by written evidence, already disclosed by a Third Party to the Recipient, which does not have confidential obligations and is entitled to make the disclosure.

12.7

When the Agreement is rescinded or terminated, the Recipient shall immediately cease using and shall not permit any Third Party to use the Confidential Information provided by the Provider, and, upon the Provider’s written request, shall delete or destroy the Confidential Information provided by the Provider or return to the Provider, without retaining any information in any form.

13.

No assignment

13.1

Except as contemplated hereunder or with written consent by the Parties, no one shall transfer, assign or otherwise dispose all or part of its rights under this Agreement, nor shall it grant, establish or dispose any rights, interests or obligations therein. Any transfer in conflict with Article 13 is invalid.

14.

Further assurance

14.1	The Parties shall each sign (or urge to sign) other documents as required by relevant laws and regulations or deemed necessary to execute the Agreement or make the Agreement valid.

15.

Taxes and expenses

15.1	Subject to Article 15.2, unless otherwise stipulated in the Agreement (or any other Transaction Documents), each Party shall be responsible for its own costs, expenses and other payments incurred in relation to the Transaction.

15.2

The Parties shall both bear and pay all taxes arising under the Agreement or any other Transaction Documents in accordance with laws and regulations and relevant national rules or decisions and all fees collected by governmental authorities, regulatory institutions and stock exchanges. Considering the Seller is a Hong Kong company and subject to foreign exchange control in respect of the payment of domestic taxes, the Purchaser agrees to withhold and pay on behalf of the Seller applicable domestic taxes and fees payable by the Seller, which withholding taxes and fees could be deducted by the Purchaser from the consideration of the Transaction in one lump sum. Upon confirmation by the Seller, the Purchaser, as the Seller’s withholding agent, shall declare or file with the competent tax authorities under the State Administration of Taxation of the PRC (including necessary negotiations or discussions with the tax authorities) all domestic taxes and fees arising from the Transaction and pay the taxes and fees in accordance with the arrangements herein, for which the Seller shall provide assistance and cooperation. The costs and expenses incurred by the Purchaser for the withholding and payment matters under this Article (including without limitation engaging tax intermediaries to handle the relevant tax payments) shall be borne by the Seller.

15.3	With respect to the Transaction, unless otherwise required by laws and regulations and/or agreed by the Parties, all expenses incurred due to the transfer of the Target Assets shall be reasonably arranged and resolved through negotiation by and between the Parties.

16.

Notice

16.1

Any notice related to this Agreement shall be written in Chinese, and delivered via designated courier, fax, email or express delivery by a courier company recognized by both Parties. The notice is effective upon receipt and is deemed to have been received at the following time: (a) if via designated courier or express delivery, on the third day after it is delivered to the recipient or sent out by the courier company; (b) if via fax, at the time the sender sends the notice with the notice showing that it has been delivered; or (c) if via email, when the relevant email reaches that recipient’s email address. In each case, if it is delivered out of the business hours, the notice shall be deemed to be received at the beginning of the business hours on the next business day.

16.2	For the purposes of Article 16.1, contact information such as the addresses and fax numbers of the Parties are set forth in Appendix 2.

17.

Conflict with other agreements

17.1

The Agreement and its appendices are the legal document of the Transaction. If any oral discussion and written agreements reached by the Parties before the signing of the Agreement are inconsistent with the Agreement, the content of the Agreement shall prevail, unless the Parties expressly agreed otherwise.

18.

Waiver, rights and remedies

18.1

Unless otherwise expressly provided in the Agreement, no waiver, failure or delay by any Party in exercising any right, power or remedy hereunder or under any other Transaction Documents shall be deemed as a waiver thereof, nor shall preclude any future exercise of such right, power or remedy and no single or partial exercise of any such right, power or remedy shall preclude any other or future exercise thereof.

19.

Texts

19.1	This Agreement is prepared in Chinese. The Agreement is made in eight originals with each Party holding three copies, and the remaining copies reserved for approvals and/or filings by the governmental authorities. The aforementioned texts of the Agreement have the same legal effect.

20.

Effective date and amendment

20.1

This Agreement shall be established upon the execution by the legal representatives or authorized representatives of the Parties and the affixation of the official chops of both Parties, and shall enter into force once the internal corporate governance procedures of each Party respectively has been completed (including the shareholder’s approval for the Purchaser and the EGM of Sinopec Kantons Holdings Limited).

20.2

Upon the date of establishment of this Agreement, Articles 11 (Announcement), 12 (Confidentiality), 13 (No assignment), 15 (Taxes and expenses), 16 (Notice), 17 (Conflict with other agreements), 18 (Waiver, rights and remedies), 20 (Effective date and amendment), 21 (Invalidity), 22 (Jurisdiction and arbitration) and Appendix 1 (Definition and interpretation) shall be legally binding upon the Parties.

20.3	Upon the execution of this Agreement, any amendment to this Agreement (or any other Transaction Document) shall be made in writing, and effective upon the execution by the legal representatives or authorized representatives of the Parties and the affixation of the official chops of both Parties.

21.

Invalidity

21.1

The provisions of this Agreement and other Transaction Documents are severable. If any such provision is deemed to be or become invalid or unenforceable in any respect in accordance with laws and regulations, it shall be ineffective in that respect, and the Parties shall make reasonable efforts to replace such provision with a valid and enforceable alternative provision whose effect is as close as possible to the intended.

22.

Jurisdiction and arbitration

22.1	This Agreement is governed by, and shall be interpreted in accordance, with the PRC laws and regulations.

22.2

The Parties shall use good faith to resolve any dispute, controversy or claim (“Dispute”) arising from, or in connection with the interpretation or performance of this Agreement through amicable negotiation, during which the Parties may consult the regulatory authority. If a settlement cannot be reached through negotiation within sixty Days after one Party has brought the matter to the other Party, the Parties may refer such matter to arbitration.

22.3

The Dispute shall be submitted to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with its rules in force at the time of arbitration. The Dispute shall be decided by three arbitrators. Each Party shall appoint one arbitrator, and the third arbitrator shall be appointed by the other two arbitrators, provided that if the other two arbitrators cannot decide on the choice of the third arbitrator, such arbitrator shall be appointed by CIETAC.

22.4	The arbitration proceedings shall be presided over by CIETAC as the presiding authority and shall be conducted in Chinese. The arbitration proceedings shall be held in Beijing.

22.5	The arbitration award made in accordance with the above arbitration procedures shall be final and binding upon the Parties, and shall be enforceable in accordance with its provisions.

22.6

The arbitration fees shall be borne by the losing party. The Parties agree that if it is necessary for one Party to enforce the arbitral award through legal proceedings of any type, the Party subject to enforcement shall pay all reasonable fees and expenses as well as legal fees in connection with the enforcement of the arbitral award.

22.7	During the dispute resolution, the Parties shall continue to implement this Agreement in all other aspects except for the matter in dispute.

23.

Force majeure

23.1

In the event of a Force Majeure event that either Party is in whole or in part unable to perform its obligations under this Agreement due to the influence of such event, it shall be exempted from the liabilities in whole or in part according to the circumstances affected by Force Majeure. The performance of the obligations by the Parties under this Agreement may be suspended during the delay period caused by Force Majeure, and shall be automatically extended for a period equal to the delay period. The Party suffering from Force Majeure shall notify the other Party in writing as soon as possible and provide valid proof documents certifying the occurrence and time of Force Majeure within 15 Days. The Party suffering from Force Majeure shall take all reasonable measures to mitigate the consequences of Force Majeure as soon as possible. In the event of a Force Majeure event, the Parties shall negotiate immediately in order to find a fair solution and make their best effort to mitigate the consequences caused by Force Majeure.

(The remainder is intentionally left blank. Appendices and signature pages to follow)

The Parties have executed the “Agreement on Cash Payment to Purchaser 100% Equity in Sinopec Yu Ji Company” on the date indicated at the beginning of the document as a proof.

/s/ China Oil & Gas Pipeline Network Corporation (Official Seals)

(Signed by Legal Representative or Authorized Representative)

The Parties have executed the “Agreement on Cash Payment to Purchaser 100% Equity in Sinopec Yu Ji Company” on the date indicated at the beginning of the document as a proof.

/s/ Sinomart KTS Development Limited (Official Seals)

(Signed by Legal Representative or Authorized Representative)

Appendix 1: Definition and Interpretation

1. Definition. The following defined terms shall have corresponding meanings ascribed to it as set forth below in the table.

Agreement	means this Agreement on Cash Payment to Purchase 100% Equity in Sinopec Yu Ji Company
Purchaser/PipeChina	means China Oil & Gas Pipeline Network Corporation
Seller	means Sinomart KTS Development Limited
Target Assets	has the meaning set forth in Article 1.
Target	Sinopec Yu Ji Pipeline Co., Ltd.
Transaction	means, as contemplated hereunder, the proposed sale by the Seller of the 100% equity interests in the Target owned by the Seller, and the proposed acquisition and takeover by the Purchaser of such Target Assets subject to the terms and on the conditions hereunder.
Transaction Consideration	has the meaning set forth in Article 2.
Valuation Date	means the valuation date set forth in the Valuation Report, i.e., December 31, 2019
Valuation Report	means the Report with Respect to the purchase by China Oil & Gas Pipeline Network Corporation of Gas Pipeline Assets owned by Sinopec Yu Ji Pipeline Company Limited owned by Sinopec Marketing Co., Limited through Payment of Cash numbered “Zhong Lian Ping Bao Zi [2020]899,” issued by China United Assets Appraisal Group Co., Ltd.
Execution Date	means the date when the legal representative or authorized representative of the Parties execute this Agreement and affix the official chops of the Parties.
Closing	means the closing of the transfer of Target Assets as set forth in Article 5.
Closing Date	means September 30, 2020.
Excluded Assets	has the meaning set forth in Article 1.2.
Excluded Assets Sale Agreement	has the meaning set forth in Article 1.2.
Sale Price of Excluded Assets	has the meaning set forth in Article 1.2.
Transition Period	has the meaning set forth in Article 3.1.
Closing Audit	has the meaning set forth in Article 3.2.
Office Building Properties	means the office building located at Floor 1 Control Center, 77 Tianchen Road, Lixia District, Jinan City, Shandong Province, China, and the corresponding land use right, with an aggregate area of 15,891 square meters of land, 8,381.29 square meters of the building (area entitled to use of 8,474 square meters and proprietary area of 8,474 square meters)

Henan Management Office	means the management office located at 10 Xindong Road, Industry Development District, Puyang City, Henan.
Yulin-Jinan Pipeline	means gas pipeline connecting Yulin, Shaanxi and Jinan Shandong (via Shaanxi, Shanxi, Henan and Shandong) and relevant facilities.
Qingfeng Line of Yulin-Jinan Pipeline	means gas pipeline located in Puyang, Henan, connecting Nanle station and Liutun booster station (via Qingfeng station) with a length of 35.07 kilometer and relevant facilities.
Handover	has the meaning set forth in Article 5.3.
Transaction Documents	means this Agreement and all appendix thereto, any supplemental agreements entered by and between Parties from time to time, and the Valuation Report.
Conditions Precedent	means Conditions Precedent set forth in Article 4.1, and a “Condition Precedent” means any one of such Conditions Precedent.
Third Party	means any entity or individual other than the Parties hereunder.
Third-Party Claim	means taking legal responsibility and indemnification for controversies, disputes, lawsuits or arbitrations arising from the Target Assets.
Representative(s)	means, with respect to a Party and/or its Affiliates, its and/or its Affiliate’s director, senior management, employee, agent, counsel, accountant and consultant.
Provider	has the meaning set forth in Article 12.1.
Recipient	has the meaning set forth in Article 12.1.
Transferring Construction in Progress into Fixed Assets	means, after the completion of the construction in progress, and upon the final acceptance of the construction, the construction in progress is put into use and be recorded as fixed assets on the book(s) of the Seller.
Affiliates	means, with respect to any Party, any entity controlled by such Party, controlling such Party or under common control with such Party.
Liability/Liabilities	means all current or future, actual, potential or debitive, liability, obligation and debts in all nature, incurred as a result of agreements, operations of law or other reason, and incurred jointly or separately either as a debtor or a guarantor.
Material Adverse Change/Material Adverse Effect	means incident(s) that, individually results in an actual or reasonable foreseeable loss of no less than RMB100 million to the assets sold to the Purchaser and business in relation thereto, or in aggregate result in an actual or reasonable foreseeable loss of no less than RMB500 million to the assets sold by the Seller to the Purchaser and business in relation thereto.

Major Loss(es)	means, accumulative and actual losses of more than 5% of the consideration to the Target Assets and relevant business.
Disputes	has the meaning set forth in Article 22.2.
CIETAC	has the meaning set forth in Article 22.3.
Intellectual Property Rights	means patents, trademarks, service marks, company logos, trade names, domain names, design rights, copyrights (including but not limited to computer software copyrights) and database rights, semiconductor circuit rights, utility models, design rights, invention rights, proprietary technology rights, and other intellectual property rights (regardless of whether it has been registered or not) and all rights or forms of protection that have equivalent or similar utility anywhere in the world, and the term “registration” includes registration and application for registration.
Tax	shall include (a) taxes levied on total or net income, profits and gains, and (b) all other taxes, levies, tariffs, import taxes, charges and withholding taxes (if applicable) of any nature, including any consumption tax, value-added tax and its additional taxes, corporate income tax, personal income tax (if applicable), real estate tax, land value-added tax, deed tax, farmland occupation tax, urban land use tax, environmental protection tax, stamp duty, etc., or withholding of any nature (including any related fines, penalties, late fees or interest).
Confidential Information	means, with respect to the Purchaser, any material received or owned by PipeChina (or its representatives) that is relating to the Seller or Target Assets, or any material received or owned prior to the Closing that relates to Target Assets, and with respect to the Seller, any material received or owned by the Seller (or its representatives) that is relating to the Purchaser or Target Assets, or any material received or owned prior to and after the Closing that relates to the Target Assets, or any material that relates to the terms of this Agreement or other transaction documents.
Force Majeure	means unforeseeable, unavoidable and insurmountable objective conditions, including natural disasters such as earthquakes, typhoons, floods, and heavy rains (subject to the information issued by the local government or functional management departments such as meteorology), fires, wars, epidemic (including COVID-19 pandemic), any government actions, any changes and promulgation of laws, etc., that directly affects the performance of this Agreement (or cause the performance of this Agreement deviates from the terms thereunder).

Hong Kong Stock Exchange	means the Stock Exchange of Hong Kong Limited.
Listing Rules	means the listing rules of the Hong Kong Stock Exchange.
PRC/China	means the People’s Republic of China (for the sole purpose of this Agreement, excluding the applicable laws of Hong Kong Special Administrative Region of China, Macao Special Administrative Region of China and Taiwan).
RMB	means the legal currency of China.
Day(s)	means, unless otherwise specified, calendar days, provided that in any circumstances, if the last day of a given period hereunder is a holiday, then the last day of such period shall be the next day immediately following such holiday. Unless otherwise specified, “prior to a certain day” shall mean a period ending on such day, while “after a certain day” shall mean a period starting from the next day of such day.
Business Day(s)	means any day other than a Saturday, Sunday or a national holiday determined by the PRC government.

2. Interpretation. Unless otherwise specified, under this Agreement:

(1)

a “person” shall mean any individual, business name, organization, company (whether legal person or not), government (including but not limited to central and local governments and their constituent departments), any joint venture, association, partnership enterprises, institutions, work councils or employee representative organizations (regardless of whether they have independent legal personality or not);

(2)

an “Article” shall be an article hereunder;

(3)

headings are set for the ease of references only and shall not affect the interpretation of this Agreement;

(4)

in order to facilitate the payment in RMBs, any other amounts denominated in foreign currencies shall be converted into RMBs at the exchange rate on such date;

(5)

words introduced by terms like “including,” “includes” or “especially” or other similar terms shall be deems as explanatory only and does not limit the meaning of the words prior to such term; and

(6)

for laws and regulations, including laws, administrative regulations, administrative rules, local regulations, etc., unless otherwise expressly provided in this Agreement, any explicit reference to a regulation (including any regulation in any jurisdiction) shall include: (a) the laws and regulations as revised, merged or re-enacted before or after the Execution Date; (b) the laws and regulations that were re-promulgated (whether revised or not); and (c) any supplementary regulations (including regulations) formulated in accordance with the laws and regulations (before or after the Execution Date) that have been revised, merged or re-enacted as described in paragraph (a) or (b) above, unless any matters mentioned in paragraphs (a) to (c) appear after the date of the Execution Date, and increase or change the Purchaser’s or Seller’s responsibilities hereunder.

3. Appendix. Appendices shall be deemed as an integral part of this Agreement.

4.	Inconsistence. If any defined terms in this Appendix 1 is inconsistent with any articles or terms set forth in other Appendices, for the interpretation of such Articles or Appendices, the definition in such Articles or Appendix.

Appendix 2: Account and Contact Information

Appendix 3: Seller Representations and Warranties