EX-4.24






Exhibit 4.24




English Translation of Chinese Original




Equity Transfer Agreement




By and between




China Petroleum Pipeline Bureau




And




PetroChina Kunlun Gas Company Limited




May 15, 2009




 









 





Equity Transfer Agreement




     This Equity Transfer Agreement (this “Agreement”) is entered into this 15th
day of May, 2009 in Beijing by and between China Petroleum Pipeline Bureau (The
“Transferor”), with its business license number being 130000100001893, registered address
being at 87 Guangyang Street, Langfang City, Hebei Province and its legal representative being Zhao
Yujian, and PetroChina Kunlun Gas Company Limited (The “Transferee”), with its business
license number being 110000003132822, registered address being at Dugezhuang Village East, Renhe
Area, Shunyi District, Beijing and its legal representative being Xiang Pingsheng.



     Whereas,




	 	(i)	 	The Transferor is an enterprise the title of which is vested with the whole people
and which was incorporated on April 16, 1973 and validly subsisting under the PRC laws;
	 
	 	(ii)	 	The Transferee is a company limited duly incorporated under the laws of the PRC on
July 27, 2001; and
	 
	 	(iii)	 	The equity exchanges hereunder have been listed on the Equity Exchange Institution
on April 2, 2009. During the period of listing, there was only one interested
transferee, i.e. Kunlun Gas. The Transferor agrees to transfer, and The Transferee
agrees to take delivery of, the Target Equity in the Target Company.





     In accordance with the Company Law of the People’s Republic of China, the Contract Law of the
People’s Republic of China, and other applicable laws and regulations, the Transferor and the
Transferee, after negotiations, hereby reach agreement as follows on the acquisition of the Target
Equity (as defined hereunder) by the Transferee from the Transferor, for mutual observance:



Article 1 Definitions





	 	1.1	 	For the purposes of this Agreement, unless the context otherwise specifies, terms
in this Agreement shall have the meanings set forth below:





	 	 	 
	“Pipeline Bureau”

	 	refers to China Petroleum Pipeline Bureau;
	 
	 	 
	“Kunlun Gas”

	 	refers to PetroChina Kunlun Gas Company Limited;
	 
	 	 
	“Pipeline
Investments Limited
(Target Company)”

	 	refers to China Petroleum Pipeline
Urban Gas Investments Limited;
	 
	 	 
	“Target Equity”

	 	refers to all the targets contemplated to be transferred under
Article 2 of this Agreement;






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	“The Transfer”

	 	refers to the transfer of the Target Equity by the Transferor to the
Transferee hereunder.
	 
	 	 
	“Valuation Report”

	 	refers to the valuation reports
Zhong Qi Hua Ping Bao Zi (2009) No. 29
issued by China Enterprise Appraisal Co., Ltd. on the assets and
liabilities in connection with the Target Equity as of the Valuation
Date for the purpose of the Transfer contemplated hereunder;
	 
	 	 
	“Open Tender Price”

	 	refers to the open tender price as determined in the Valuation Report;
	 
	 	 
	“Valuation Date”

	 	refers to August 31, 2008;
	 
	 	 
	“Equity Exchange
Institution”

	 	refers to the China Beijing Equity Exchange Institution;
	 
	 	 
	“Completion”

	 	refers to the transfer of the Target Equity in accordance with
Article 5 hereof;
	 
	 	 
	“Completion Date”

	 	refers to the date as determined by the Parties through negotiations
after all the conditions precedent specified in Article 4 hereof have
been satisfied;
	 
	 	 
	“PRC” or “China”

	 	the People’s Republic of China and, for the purpose of this
Agreement, Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan are not included.






Article 2 Target Equity




     The Target Equity refers to 100% equity interest in Pipeline Investments Limited as held by
the Transferor.



Article 3 Consideration for Transfer of Equity




     Based on the results of the open tender, the Transferor will transfer the subject of the
Transfer to the Transferee hereunder at RMB 671,868,000.00 (“Open Tender Prices”),
respectively.



Article 4 Conditions Precedent for Delivery of the Target Equity





	 	 	 	The Completion of the Transfer hereunder shall be conducted on the Completion Date
determined by the parties hereto after all the following conditions of Completion
have been satisfied:
	 
	 	4.1	 	This Agreement has been duly signed by the legal representatives of the Transferor
and the Transferee or their respective authorized representative;




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	 	4.2	 	All necessary consents or approvals in connection with this Agreement and the
Target Equity have been obtained, including without limitation:






	 	(a)	 	The Transferor has obtained approval from its internal
competent authority on the Transfer of the Target Equity;
	 
	 	(b)	 	The Transferee has obtained approval from its internal
competent authorities for its taking delivery of the Equity from the
Transferor;
	 
	 	(c)	 	All necessary consents have obtained by the Transferors from
the creditors and other relevant third parties in respect of the handover of
the Target Equity;
	 
	 	(d)	 	The Valuation Report on which the Transfer consideration is
based has been endorsed by the Transferor and the Transferee, and the filing
procedures have been completed in respect of such valuation.






	 	4.3	 	Open tender and/or bidding process in respect of the Transfer hereunder have been
completed at the Equity Exchange Institution in accordance with the applicable laws and
regulations.
	 
	 	4.4	 	As at the Completion Date, the Transferor’s representations, warranties and
covenants contained herein shall remain true and accurate.





     The parties hereto shall do their utmost to cooperate with each other in a friendly manner
with a view to the satisfaction of the all the conditions precedent set forth above as soon as
practicable, and make all reasonable efforts to procure the completion of the acquisition
contemplated hereunder on or before December 31, 2009.



Article 5 Delivery of the Target Equity





	 	5.1	 	The Transferee shall pay the consideration to the Transfer in full and in Renminbi
to the bank account designated by the Transfer in a lump sum.
	 
	 	5.2	 	The Transferor shall, on the Completion Date, deliver to the Transferee a
contribution certification or a shareholders’ list issued by the Target Company, and
cause and assist with Completion Date to complete the registration for the amendments to
the registration of the Target Equity with the competent industrial and commercial
authority.
	 
	 	5.3	 	The Transferor shall, on the Completion Date, deliver to the Transferee or the
Target Company any and all materials regarding the Target Company in its possession,
including without limitation, the assets list, financial statements or files in
connection with the Target Company.




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	 	5.4	 	As from the Completion Date, the Transferee shall obtain the Target Equity and all
the derivative interest arising therefrom in accordance with the applicable P.R.C. laws
and regulations, and be entitled to and assume the corresponding rights and obligations
specified in the applicable laws, regulations and the articles of association of the
related companies.





Article 6 Representations, Warranties and Covenants of the Transferor





	 	6.1	 	The Transferor is an enterprise the title of which is vested with the whole people
and which was incorporated and validly subsisting under the PRC laws. The Transferor
owns the Target Equity and has the right to transfer the Target Equity in accordance with
this Agreement.
	 
	 	6.2	 	The Transferor guarantees that it has not established, directly or indirectly, any
pledge, third party interest or other restrictions upon the Target Equity.
	 
	 	6.3	 	The execution and performance of this Agreement by the Transferor do not violate
any contracts or agreements which are legally binding upon it.
	 
	 	6.4	 	The execution and performance of this Agreement by the Transferor do not violate
any applicable laws or regulations, or the Transferor’s articles of association or other
constitutional documents.
	 
	 	6.5	 	The Transferor undertakes to actively cooperate actively, and procure its
Affiliated Entities to cooperate with the Transferee to complete any and all legal or
administrative procedures in connection with the Transfer hereunder, including without
limitation, amendments to the registration with the competent industrial and commercial
authorities and amendments.
	 
	 	6.6	 	The Transferor hereby makes the following representations, warranties and covenants
in connection with the Target Company as set out in Article 2.1 hereof:





          (a) The Target Company are incorporated and validly subsisting under the PRC laws and has
independent corporate capacity;




          (b) The Target Company are not in violation of any prevailing PRC laws, regulations and
regulatory documents, and have not received any decision on administrative penalties or judgment or
ruling from any court or arbitral body, which may have material effect on its production and
operation;




          (c) The Target Company are not exposed to any current or potential material litigations,
claims, arbitration, administrative proceedings or other legal proceedings and do not have any
contingent liabilities in any other form. The Target Company have paid in full all the taxes due
on or prior to the execution of this Agreement, and guarantees to pay in full all the taxes due as
from the execution of this Agreement to the Completion of the transaction hereunder;




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          (d) All the financial and operating information in connection with the execution of this
Agreement furnished by the Transferor and the Target Company are true, accurate and complete;




          (e) The Transferor has paid the contribution it subscribed for in connection with the Target
Company.




Article 7 Representations, Warranties and Covenants of the Transferee





	 	7.1	 	The Transferee is a company limited by shares duly organized, validly existing
and in good standing under the laws of the PRC.
	 
	 	7.2	 	The execution and performance of this Agreement by the Transferee do not violate
any contracts or agreements which are legally binding upon the Transferee.
	 
	 	7.3	 	The execution and performance of this Agreement by the Transferee do not violate
any applicable laws or regulations, or the Transferee’s articles of association or other
constitutional documents.





Article 8 Taxation




     The taxation fees (including the expenses incurred in connection with the related equity
exchanges) covered in the Transfer of Equity shall be respectively assumed by the parties hereto in
accordance with the applicable laws and regulations.



Article 9 Event of Default





	 	9.1	 	After this Agreement takes effect, if either party hereto fails to fulfill the
other obligations hereunder in accordance with the provisions hereunder, or any of its
representations or warranties is proved to be false, such party shall be deemed to be in
default. The defaulting party shall keep the non-defaulting party indemnified for any
and all losses the latter suffered as a result of the above defaults.
	 
	 	9.2	 	After this Agreement takes effect, if the Transferor fails to transfer the Target
Equity in accordance with the provisions hereunder, the Transferee shall have the right
to cancel this Agreement. In addition, the Transferor shall be liable for keeping the
Transferee indemnified for the expenses actually incurred and the losses suffered by the
Transferee as a result of the above failure of Transfer, including without limitation,
any and all related expenses incurred in connection with the Transferee’s taking delivery
of the Target Equity.





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Article 10 Confidentiality




     Both parties hereto shall treat any and all details regarding this Agreement and the agreed
Equity Transfer, the relationship between the parties hereto and the documents provided as
confidential information (the “Confidential Information”). Without the prior written
consent of the other party, neither party hereto shall disclose the Confidential Information to any
third party other than the signatories hereof; provided however that, the disclosure as required by
the related intermediaries, regulatory bodies and under the listing requirements of the place of
listing where the Transferee is domiciled for the purpose of this Agreement shall not be subject to
such restrictions. This article of Confidentiality shall remain in effect even if this Agreement
has been completely performed or terminated for any other reasons.



Article 11 Effectiveness, Amendments, Dissolution, Termination and Transfer of This Agreement




     11.1 Effectiveness



     This Agreement shall come into effect upon the execution by the authorized representatives of
the parties hereto on the date set forth at the beginning of this Agreement, and the receipt by the
parties hereto of any and all necessary internal authorizations and approvals for the execution and
performance hereof.



     11.2 Amendments and Dissolution



     After its execution, neither party hereto shall amend or dissolve this Agreement at its own
discretion without the written consent of the other party.



     11.3 Termination



     Upon occurrence of any of the following events, this Agreement shall be terminated prior to
Completion, and the Transferee shall have the right to terminate this Agreement unilaterally
without assuming any liabilities of default:



          (a) The parties hereto agree to terminate this Agreement after conducting consultations;




          (b) The Transferee found any issue which has adverse effect upon the Target Equity or the
Transferee itself;




          (c) Omission, misleading, incompleteness or inaccuracy is found in the representations,
warranties and undertakings of the Transferor.




     11.4 Transfer



     Without the written consent of the other party, neither party hereto shall transfer any of its
rights and/or obligations hereunder to any third parties.



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Article 12 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.



Article 13 Notices




     13.1 Notices required to be given by any party hereto in accordance with this Agreement shall
be in a written form and sent by express delivery, facsimile, electronic mail or telegraph. Any
such notice shall be sent to the other party in accordance with its address, and shall contain
sufficient statements and/or details indicating the major issues in connection with this Agreement.



     The contact information of the parties hereto is as follows:



     The Transferor:


China Petroleum Pipeline Bureau



Address: 87 Guangyang Street, Langfang City, Hebei Province



Contact:



Tel:




     The Transferee:


PetroChina Kunlun Gas Company Limited



Address:



Contact:



Tel:




     13.2 Notices given by way of facsimile, electronic mail or telegraph shall be deemed
effectively given on the date of dispatch; unless the other party furnishes proof to the contrary
evidencing that it has not received any such notice as a matter of fact.



     13.3 Notices given by way of registered mails shall be deemed effectively given three (3)
business days following the dispatch; unless the other party furnishes the proof to the contrary
evidencing that it has not received any such notice as a matter of fact.



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     13.4 If there are changes in the contact information of either party hereto, it shall give the
other party a written notice three (3) days in advance.



Article 14 Governing Law and Dispute Resolution





	 	14.1	 	The execution, effectiveness, performance, interpretation and implementation as
well as any and all issues in connection with this Agreement shall be governed by the
laws of the PRC.
	 
	 	14.2	 	Any dispute arising from, out of or in connection with this Agreement shall be
settled through friendly consultations between the parties.





Article 15 Additional Provisions





	 	15.1	 	Maintenance of Normal Operation and Management





As from the execution of this Agreement to the Completion Date, the parties hereto
agree to maintenance the normal operation and management of the Target Equity. The
Transferor guarantees that the Target Company will not make any substantial adjustments
to or dispose its own personnel issues and Equity, nor will it make any adjustments to
or dispose the target non-equity Equity or the related personnel issues in violation of
the purpose of this Agreement. In the event of any material changes beyond the normal
operational activities, the Transferor shall forthwith notify the Transferee in writing
of such changes.




	 	15.2	 	Decision-making and Handover of Operation and Management





Following the Completion Date, the Transferee shall have the right to recommend candidates
of members of the board of directors and the supervisors’ committee, and to participate
in decision-making, operation and management of the Target Company. The Transferor
shall do its utmost to provide any and all assistance and handover the relevant
materials and documents in its possession.




	 	15.3	 	Disposal Plan regarding the Creditor’s rights and Debts.





Following the Completion of Transfer hereunder, the creditor’s rights, debts and contingent
liabilities of the Target Company shall continue to be assumed by such Target Company.


This Agreement shall be executed in fourteen (14) copies, each of which shall have the same legal
effect. Each party hereto is to hold four (4) copies and the other copies shall be submitted to
the Equity Exchange Institution or the competent authorities for approval or filing purposes.




9









 




Signature page of the Equity Transfer Agreement by and between China Petroleum Pipeline Bureau and
PetroChina Kunlun Gas Company Limited




The Transferor




China Petroleum Pipeline Bureau (company seal)




Signed by Legal Representatives or Authorized Representative:                                         




The Transferee:




PetroChina Kunlun Gas Company Limited (company seal)




Signed by Legal Representatives or Authorized Representative:                                         




10









 






English Translation of Chinese Original




Supplementation




To




The Equity Transfer Agreement




By and between




China Petroleum Pipeline Bureau




And




PetroChina Kunlun Gas Company Limited




May 15, 2009




 









 





Supplementation to




The Equity Transfer Agreement




     This Supplementation to the Equity Transfer Agreement (this “Supplementation
Agreement”) is entered into this 15th day of May, 2009 in Beijing by and between
China Petroleum Pipeline Bureau (The “Transferor”), with its business license number being
130000100001893, registered address being at 87 Guangyang Street, Langfang City, Hebei Province and
its legal representative being Zhao Yujian, and PetroChina Kunlun Gas Company Limited (The
“Transferee”), with its business license number being 110000003132822, registered address
being at Dugezhuang Village East, Renhe Area, Shunyi District, Beijing and its legal
representative being Xiang Pingsheng.



     Whereas, the parties hereto have entered into an Equity Transfer Agreement by and between
China Petroleum Pipeline Bureau and PetroChina Kunlun Gas Company Limited (the “Equity Transfer
Agreement”) dated May 15, 2009, according to which the Transferor agrees to transfer to the
Transferee the 100% equity interest in China Petroleum Pipeline Urban Gas Investments Limited
(“Target Equity”).



     The Transferor and the Transferee, after friendly negotiations, hereby reach agreement as
follows on making supplementations to the Equity Transfer Agreement:



Article 1




     According to the Equity Transfer Agreement, the Transferor will transfer the Target Equity to
the Transferee at a consideration of RMB 671,868,000.00 (the “Open Tender Price”). The
Open Tender Price was established on the basis of the Valuation Report issued by China Enterprise
Appraisal Co., Ltd. on the assets and liabilities in connection with the Target Equity as of the
Valuation Date (August 31, 2008) for the purpose of the Transfer contemplated hereunder. With
respect to the assumption of the profits and losses following the Valuation Date, the parties
hereto engaged Beijing Tianyuan Certified Auditors & Accountants Co., Ltd. to conduct a
supplemented audit on the profits and losses of the Target Companies during the period from the
Valuation Date to the Audit Reference Date (April 30, 2009). The parties hereto agreed and
confirmed that the net profits and losses accrued from the Valuation Date to the Audit Reference
Date corresponding to the Open Tender Prices shall be assumed by the Transferor.



     It was confirmed after the supplemented audit that, the difference between the audited net
assets value as of the Audit Reference Date and that as of the Valuation Date was RMB
12,303,671.94.



     The total consideration which is to be paid for the acquisition of the Target Equity is RMB
684,171,671.94.



Article 2




     The Transferor agrees to pay the difference in the audited net assets value in a lump



- 12 -









 







sum in full to the bank account designated by the Transferee on the Completion Date as agreed
under the Equity Transfer Agreement.



Article 3




     In the event of any inconsistency between this Supplementation Agreement and the Equity
Transfer Agreement, this Supplementation Agreement shall prevail. Other issues not agreed upon
hereunder shall be governed by the Equity Transfer Agreement.



Article 4




     Any amendments and interpretation to this Agreement shall not take effect unless the parties
hereto have reached a supplementation agreement in writing following their consultations with each
other.



Article 5




     This Supplementation Agreement shall be executed in eight (8) copies, each of which shall have
the same legal effect. Each party hereto is to hold four (4) copies.



Article 6




     This Supplementation Agreement shall take effect upon its execution by the authorized
representatives of the parties hereto on the date first written above.



 - 13 - 









 




Signature page of the Supplementation to the Equity Transfer Agreement



The Transferor



China Petroleum Pipeline Bureau (company seal)



Signed by Legal Representatives or Authorized Representative:                                         



The Transferee:



PetroChina Kunlun Gas Company Limited (company seal)



Signed by Legal Representatives or Authorized Representative:                                         




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English Translation of Chinese Original




Form
of Equity Transfer Agreement




By and between




China Huayou Group Corporation




And




PetroChina Kunlun Gas Company Limited




May 15, 2009




 15 









 





Equity Transfer Agreement




     This Equity Transfer Agreement (this “Agreement”) is entered into this 15th
day of May, 2009 in Beijing by and between China Huayou Group Corporation (The
“Transferor”), with its business license number being 10000000000237, registered address
being at 6 Liupukang Street, Xicheng District, Beijing and its legal representative being Wang
Wencang, and PetroChina Kunlun Gas Company Limited (The “Transferee”), with its business
license number being 110000003132822, registered address being at Dugezhuang Village East, Renhe
Area, Shunyi District, Beijing and its legal representative being Xiang Pingsheng.



     Whereas,




	 	(i)	 	The Transferor is an enterprise the title of which is vested with the whole people
and which was incorporated on December 10, 1998 and validly subsisting under the PRC
laws;
	 
	 	(ii)	 	The Transferee is a company limited duly incorporated under the laws of the PRC on
July 27, 2001; and
	 
	 	(iii)	 	The equity exchanges hereunder have been listed on the Equity Exchange Institution
on April 2, 2009. During the period of listing, there was only one interested
transferee, i.e. LKunlun Gas. The Transferor agrees to transfer, and The Transferee
agrees to take delivery of, the Target Equity in the Target Company.





     In accordance with the Company Law of the People’s Republic of China, the Contract Law of the
People’s Republic of China, and other applicable laws and regulations, the Transferor and the
Transferee, after negotiations, hereby reach agreement as follows on the acquisition of the Target
Equity (as defined hereunder) by the Transferee from the Transferor, for mutual observance:



Article 1 Definitions





	 	1.1	 	For the purposes of this Agreement, unless the context otherwise specifies, terms
in this Agreement shall have the meanings set forth below:





	 	 	 
	“Huayou Group”

	 	refers to China Huayou Group Corporation;
	 
	 	 
	“Kunlun Gas”

	 	refers to PetroChina Kunlun Gas Company Limited;
	 
	 	 
	“Target Equity”

	 	refers to all the targets contemplated to be transferred under
Article 2 of this Agreement;






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	“Target Companies”

	 	refers to Yongqing Huayou Gas Limited (),
Zhuozhou Huayou Gas Limited (), Bazhou Huayou Gas
Limited (), Changde Huayou Gas Limited
(), Hunan Huayou Gas Distribution Limited
(), Hainan Huayou Ganghua Gas
Limited () and Zoucheng Huayou Gas Limited
();
	 
	 	 
	“The Transfer”

	 	refers to the transfer of the Target Equity by the Transferor to the
Transferee hereunder.
	 
	 	 
	“Valuation Report”

	 	refers to the valuation reports Zhong Qi Hua Ping Bao Zi (2009) No.
031-02, 031-03, 031-04, 031-05, 031-06, 031-07 and 031-08 issued by
China Enterprise Appraisal Co., Ltd. on the assets and liabilities in
connection with the Target Equity as of the Valuation Date for the
purpose of the Transfer contemplated hereunder;
	 
	 	 
	“Open Tender Price”

	 	refers to the open tender price as determined in the Valuation Report;
	 
	 	 
	“Valuation Date”

	 	refers to August 31, 2008;
	 
	 	 
	“Equity Exchange
Institution”

	 	refers to the China Beijing Equity Exchange Institution;
	 
	 	 
	“Completion”

	 	refers to the transfer of the Target Equity in accordance with
Article 5 hereof;
	 
	 	 
	“Completion Date”

	 	refers to the date as determined by the Parties through negotiations
after all the conditions precedent specified in Article 4 hereof have
been satisfied;
	 
	 	 
	“PRC” or “China”

	 	the People’s Republic of China and, for the purpose of this
Agreement, Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan are not included.






Article 2 Target Equity




     The Target Equity refers to 63.11% equity interest in Yongqing Huayou Gas Limited, 89.99%
equity interest in Zhuozhou Huayou Gas Limited, 51% equity interest in Bazhou Huayou Gas Limited,
51% equity interest in Changde Huayou Gas Limited, 43.55% equity interest in Hunan Huayou Gas
Distribution Limited, 51% equity interest in Hainan Huayou Ganghua Gas Limited and 51% equity
interest in Zhoucheng Huayou Gas Limited.



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Article 3 Consideration for Transfer of Equity




     Based on the results of the open tender, the Transferor will transfer the subject of the
Transfer to the Transferee hereunder at RMB 15,087,700.00 for Yongqing Huayou Gas Limited, RMB
21,029,500.00 for Zhuozhou Huayou Gas Limited, RMB 133,499,600.00 for Bazhou Huayou Gas Limited,
RMB 138,230,500.00 for Changde Huayou Gas Limited, RMB 66,094,200.00 for Hunan Huayou Gas
Distribution Limited, RMB 26,245,700.00 for Hainan Huayou Ganghua Gas Limited and RMB 8,567,600.00
for Zoucheng Huayou Gas Limited (“Open Tender Prices”), respectively.



Article 4 Conditions Precedent for Delivery of the Target Equity





	 	 	 	The Completion of the Transfer hereunder shall be conducted on the Completion Date
determined by the parties hereto after all the following conditions of Completion
have been satisfied:
	 
	 	4.1	 	This Agreement has been duly signed by the legal representatives of the Transferor
and the Transferee or their respective authorized representative;
	 
	 	4.2	 	All necessary consents or approvals in connection with this Agreement and the
Target Equity have been obtained, including without limitation:






	 	(a)	 	The Transferor has obtained approval from its internal
competent authority on the Transfer of the Target Equity, and has obtained
commitment on the waiver of the pre-emptive rights in connection with the
associated equity from other shareholders (if any);
	 
	 	(b)	 	The Transferee has obtained approval from its internal
competent authorities for its taking delivery of the Equity from the
Transferor;
	 
	 	(c)	 	All necessary consents have obtained by the Transferors from
the creditors and other relevant third parties in respect of the handover of
the Target Equity;
	 
	 	(d)	 	The Valuation Report on which the Transfer consideration is
based has been endorsed by the Transferor and the Transferee, and the filing
procedures have been completed in respect of such valuation.






	 	4.3	 	Open tender and/or bidding process in respect of the Transfer hereunder have been
completed at the Equity Exchange Institution in accordance with the applicable laws and
regulations.
	 
	 	4.4	 	As at the Completion Date, the Transferor’s representations, warranties and
covenants contained herein shall remain true and accurate.





     The parties hereto shall do their utmost to cooperate with each other in a friendly manner
with a view to the satisfaction of the all the conditions precedent set forth above as



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soon as practicable, and make all reasonable efforts to procure the completion of the
acquisition contemplated hereunder on or before December 31, 2009.



Article 5 Delivery of the Target Equity





	 	5.1	 	The Transferee shall pay the consideration to the Transfer in full and in Renminbi
to the bank account designated by the Transfer in a lump sum.
	 
	 	5.2	 	The Transferor shall, on the Completion Date, deliver to the Transferee a
contribution certification or a shareholders’ list issued by the Target Companies, and
cause and assist with Completion Date to complete the registration for the amendments to
the registration of the Target Equity with the competent industrial and commercial
authority.
	 
	 	5.3	 	The Transferor shall, on the Completion Date, deliver to the Transferee or the
Target Companies any and all materials regarding the Target Companies in its possession,
including without limitation, the assets list, financial statements or files in
connection with the Target Companies.
	 
	 	5.4	 	As from the Completion Date, the Transferee shall obtain the Target Equity and all
the derivative interest arising therefrom in accordance with the applicable P.R.C. laws
and regulations, and be entitled to and assume the corresponding rights and obligations
specified in the applicable laws, regulations and the articles of association of the
related companies.





Article 6 Representations, Warranties and Covenants of the Transferor





	 	6.1	 	The Transferor is an enterprise the title of which is vested with the whole people
and which was incorporated and validly subsisting under the PRC laws. The Transferor
owns the Target Equity and has the right to transfer the Target Equity in accordance with
this Agreement.
	 
	 	6.2	 	The Transferor guarantees that it has not established, directly or indirectly, any
pledge, third party interest or other restrictions upon the Target Equity.
	 
	 	6.3	 	The execution and performance of this Agreement by the Transferor do not violate
any contracts or agreements which are legally binding upon it.
	 
	 	6.4	 	The execution and performance of this Agreement by the Transferor do not violate
any applicable laws or regulations, or the Transferor’s articles of association or other
constitutional documents.
	 
	 	6.5	 	The Transferor undertakes to actively cooperate actively, and procure its
Affiliated Entities to cooperate with the Transferee to complete any and all legal or
administrative procedures in connection with the Transfer hereunder,




 19 









 






	 	 	 	including without limitation, amendments to the registration with the competent
industrial and commercial authorities and amendments.
	 
	 	6.6	 	The Transferor hereby makes the following representations, warranties and covenants
in connection with the Target Companies as set out in Article 2.1 hereof:





          (a) The Target Companies are incorporated and validly subsisting under the PRC laws and has
independent corporate capacity;




          (b) The Target Companies are not in violation of any prevailing P.R.C. laws, regulations and
regulatory documents, and have not received any decision on administrative penalties or judgment or
ruling from any court or arbitral body, which may have material effect on its production and
operation;




          (c) The Target Companies are not exposed to any current or potential material litigations,
claims, arbitration, administrative proceedings or other legal proceedings and do not have any
contingent liabilities in any other form. The Target Companies have paid in full all the taxes due
on or prior to the execution of this Agreement, and guarantees to pay in full all the taxes due as
from the execution of this Agreement to the Completion of the transaction hereunder;




          (d) All the financial and operating information in connection with the execution of this
Agreement furnished by the Transferor and the Target Companies are true, accurate and complete;




          (e) The Transferor has paid the contribution it subscribed for in connection with the Target
Companies.




Article 7 Representations, Warranties and Covenants of the Transferee





	 	7.1	 	The Transferee is a company limited by shares duly organized, validly existing
and in good standing under the laws of the PRC.
	 
	 	7.2	 	The execution and performance of this Agreement by the Transferee do not violate
any contracts or agreements which are legally binding upon the Transferee.
	 
	 	7.4	 	The execution and performance of this Agreement by the Transferee do not violate
any applicable laws or regulations, or the Transferee’s articles of association or other
constitutional documents.





Article 8 Taxation




     The taxation fees (including the expenses incurred in connection with the related equity
exchanges) covered in the Transfer of Equity shall be respectively assumed by the parties hereto in
accordance with the applicable laws and regulations.



 20 









 





Article 9 Event of Default





	 	9.1	 	After this Agreement takes effect, if either party hereto fails to fulfill the
other obligations hereunder in accordance with the provisions hereunder, or any of its
representations or warranties is proved to be false, such party shall be deemed to be in
default. The defaulting party shall keep the non-defaulting party indemnified for any
and all losses the latter suffered as a result of the above defaults.
	 
	 	9.2	 	After this Agreement takes effect, if the Transferor fails to transfer the Target
Equity in accordance with the provisions hereunder, the Transferee shall have the right
to cancel this Agreement. In addition, the Transferor shall be liable for keeping the
Transferee indemnified for the expenses actually incurred and the losses suffered by the
Transferee as a result of the above failure of Transfer, including without limitation,
any and all related expenses incurred in connection with the Transferee’s taking delivery
of the Target Equity.





Article 10 Confidentiality




     Both parties hereto shall treat any and all details regarding this Agreement and the agreed
Equity Transfer, the relationship between the parties hereto and the documents provided as
confidential information (the “Confidential Information”). Without the prior written
consent of the other party, neither party hereto shall disclose the Confidential Information to any
third party other than the signatories hereof; provided however that, the disclosure as required by
the related intermediaries, regulatory bodies and under the listing requirements of the place of
listing where the Transferee is domiciled for the purpose of this Agreement shall not be subject to
such restrictions. This article of Confidentiality shall remain in effect even if this Agreement
has been completely performed or terminated for any other reasons.



Article 11 Effectiveness, Amendments, Dissolution, Termination and Transfer of This Agreement




     11.1 Effectiveness



     This Agreement shall come into effect upon the execution by the authorized representatives of
the parties hereto on the date set forth at the beginning of this Agreement, and the receipt by the
parties hereto of any and all necessary internal authorizations and approvals for the execution and
performance hereof.



     11.2 Amendments and Dissolution



     After its execution, neither party hereto shall amend or dissolve this Agreement at its own
discretion without the written consent of the other party.



     11.3 Termination



 21 









 





     Upon occurrence of any of the following events, this Agreement shall be terminated prior to
Completion, and the Transferee shall have the right to terminate this Agreement unilaterally
without assuming any liabilities of default:



          (a) The parties hereto agree to terminate this Agreement after conducting consultations;




          (b) The Transferee found any issue which has adverse effect upon the Target Equity or the
Transferee itself;




          (c) Omission, misleading, incompleteness or inaccuracy is found in the representations,
warranties and undertakings of the Transferor.




     11.4 Transfer



     Without the written consent of the other party, neither party hereto shall transfer any of its
rights and/or obligations hereunder to any third parties.



Article 12 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.



Article 13 Notices




     13.1 Notices required to be given by any party hereto in accordance with this Agreement shall
be in a written form and sent by express delivery, facsimile, electronic mail or telegraph. Any
such notice shall be sent to the other party in accordance with its address, and shall contain
sufficient statements and/or details indicating the major issues in connection with this Agreement.



     The contact information of the parties hereto is as follows:



     The Transferor:


China Huayou Group Corporation



Address:



Contact:



Tel:




 22 









 





     The Transferee:


                                                            



Address:



Contact:



Tel:




     13.2 Notices given by way of facsimile, electronic mail or telegraph shall be deemed
effectively given on the date of dispatch; unless the other party furnishes proof to the contrary
evidencing that it has not received any such notice as a matter of fact.



     13.3 Notices given by way of registered mails shall be deemed effectively given [ ] business
days following the dispatch; unless the other party furnishes the proof to the contrary evidencing
that it has not received any such notice as a matter of fact.



     13.4 If there are changes in the contact information of either party hereto, it shall give the
other party a written notice [ ] days in advance.



Article 14 Governing Law and Dispute Resolution





	 	14.1	 	The execution, effectiveness, performance, interpretation and implementation as
well as any and all issues in connection with this Agreement shall be governed by the
laws of the PRC.
	 
	 	14.2	 	Any dispute arising from, out of or in connection with this Agreement shall be
settled through friendly consultations between the parties.





Article 15 Additional Provisions





	 	15.1	 	Maintenance of Normal Operation and Management





As from the execution of this Agreement to the Completion Date, the parties hereto
agree to maintenance the normal operation and management of the Target Equity. The
Transferor guarantees that the Target Companies will not make any substantial
adjustments to or dispose its own personnel issues and Equity, nor will it make any
adjustments to or dispose the target non-equity Equity or the related personnel issues
in violation of the purpose of this Agreement. In the event of any material changes
beyond the normal operational activities, the Transferor shall forthwith notify the
Transferee in writing of such changes.




	 	15.2	 	Decision-making and Handover of Operation and Management





Following the Completion Date, the Transferee shall have the right to recommend candidates
of members of the board of directors and the supervisors’ committee,


 23 









 






and to participate in decision-making, operation and management of the Target
Companies. The Transferor shall do its utmost to provide any and all assistance and
handover the relevant materials and documents in its possession.




	 	15.3	 	Disposal Plan regarding the Creditor’s rights and Debts.





Following the Completion of Transfer hereunder, the creditor’s rights, debts and contingent
liabilities of the Target Companies shall continue to be assumed by such Target
Companies.


This Agreement shall be executed in fourteen (14) copies, each of which shall have the same legal
effect. Each party hereto is to hold four (4) copies and the other copies shall be submitted to
the Equity Exchange Institution or the competent authorities for approval or filing purposes.




 24 









 




Signature page of the Equity Transfer Agreement by and between China Huayou Group Corporation and
PetroChina Kunlun Gas Company Limited



The Transferor



China Huayou Group Corporation (company seal)



Signed by Legal Representatives or Authorized Representative:                                         



The Transferee:



PetroChina Kunlun Gas Company Limited (company seal)



Signed by Legal Representatives or Authorized Representative:                                         





 25 











 








English Translation of Chinese Original




Supplementation




To




The Equity Transfer Agreement




By and between




China Huayou Group Corporation




And




PetroChina Kunlun Gas Company Limited




May 15, 2009





26









 








Supplementation to




The Equity Transfer Agreement




     This Supplementation to the Equity Transfer Agreement (this “Supplementation
Agreement”) is entered into this 15th day of May, 2009 in Beijing by and between
China Huayou Group Corporation (The “Transferor”), with its business license number being
10000000000237, registered address being at 6 Liupukang Street, Xicheng District, Beijing and its
legal representative being Wang Wencang, and PetroChina Kunlun Gas Company Limited (The
“Transferee”), with its business license number being 110000003132822, registered address
being at Dugezhuang Village East, Renhe Area, Shunyi District, Beijing and its legal
representative being Xiang Pingsheng.



     Whereas, the parties hereto have entered into an Equity Transfer Agreement by and between
Huayou Group Corporation and PetroChina Kunlun Gas Company Limited (the “Equity Transfer
Agreement”) dated May 15, 2009, according to which the Transferor agrees to transfer to the
Transferee the target equity as follows (the “Target Equity”):



     63.11% equity interest in Yongqing Huayou Gas Limited (), 89.99% equity
interest in Zhuozhou Huayou Gas Limited (), 51% equity interest in Bazhou
Huayou Gas Limited (), 51% equity interest in Changde Huayou Gas Limited
(), 43.55% equity interest in Hunan Huayou Gas Distribution Limited
(), 51% equity interest in Hainan Huayou Ganghua Gas Limited
() and 51% equity interest in Zoucheng Huayou Gas Limited
().



     The Transferor and the Transferee, after friendly negotiations, hereby reach agreement as
follows on making supplementations to the Equity Transfer Agreement:



Article 1




     According to the Equity Transfer Agreement, the Transferor will transfer the Target Equity to
the Transferee at the following consideration: RMB 15,087,700.00 for Yongqing Huayou Gas Limited,
RMB 21,029,500.00 for Zhuozhou Huayou Gas Limited, RMB 133,499,600.00 for Bazhou Huayou Gas
Limited, RMB 138,230,500.00 for Changde Huayou Gas Limited, RMB 66,094,200.00 for Hunan Huayou Gas
Distribution Limited, RMB 26,245,700.00 for Hainan Huayou Ganghua Gas Limited and RMB 8,567,600.00
for Zoucheng Huayou Gas Limited (the “Open Tender Prices”), respectively. The Open Tender
Prices were established on the basis of the Valuation Report issued by China Enterprise Appraisal
Co., Ltd. on the assets and liabilities in connection with the Target Equity as of the Valuation
Date (August 31, 2008) for the purpose of the Transfer contemplated hereunder. With respect to the
assumption of the profits and losses following the Valuation Date, the parties hereto engaged
Beijing Tianyuan Certified Auditors & Accountants Co., Ltd. to



27









 







conduct a supplemented audit on the profits and losses of the Target Companies during the
period from the Valuation Date to the Audit Reference Date (April 30, 2009). The parties hereto
agreed and confirmed that the net profits and losses accrued from the Valuation Date to the Audit
Reference Date corresponding to the Open Tender Prices shall be assumed by the Transferor.



          It was confirmed after the supplemented audit that, the differences between the audited net
assets value as of the Audit Reference Date and that as of the Valuation Date for each Target
Company (as defined in the Equity Transfer Agreement) were as follows: RMB 1,338,457.08 for
Yongqing Huayou Gas Limited, RMB 2,180,183.19 for Zhuozhou Huayou Gas Limited, RMB -9,659,278.74
for Bazhou Huayou Gas Limited, RMB 13,831,377.27 for Changde Huayou Gas Limited, RMB -9,072,944.91
for Hunan Huayou Gas Distribution Limited, RMB -3,468,451.05 for Hainan Huayou Ganghua Gas Limited
and RMB 5,445,647.26 for Zoucheng Huayou Gas Limited.




          The dividends which are due to be paid by Bazhou Huayou Gas Limited to Huayou Group shall be
implemented in accordance with the board resolutions passed at the seventh meeting of the first
session of the board of directors.




          The total consideration which are to be paid for the acquisition of the Target Equity are as
follows: RMB 16,426,157.08 for Yongqing Huayou Gas Limited, RMB 23,209,683.19 for Zhuozhou Huayou
Gas Limited, RMB 123,840,321.26 for Bazhou Huayou Gas Limited, RMB 152,061,877.27 for Changde
Huayou Gas Limited, RMB 57,021,255.09 for Hunan Huayou Gas Distribution Limited, RMB 22,777,248.95
for Hainan Huayou Ganghua Gas Limited and RMB 14,013,247.26 for Zoucheng Huayou Gas Limited.




Article 2




     The Transferor agrees to pay the decreased net assets amount in terms of net assets as
established during the supplemented audit in a lump sum in full to the bank account designated by
the Transferee within 5 business days after this Supplementation Agreement takes effect.



Article 3




     In the event of any inconsistency between this Supplementation Agreement and the Equity
Transfer Agreement, this Supplementation Agreement shall prevail. Other issues not agreed upon
hereunder shall be governed by the Equity Transfer Agreement.



Article 4




     Any amendments and interpretation to this Agreement shall not take effect unless the parties
hereto have reached a supplementation agreement in writing following their consultations with each
other.



Article 5




     This Supplementation Agreement shall be executed in ten (10) copies, each of which shall have
the same legal effect. Each party hereto is to hold five (5) copies.



Article 6




     This Supplementation Agreement shall take effect upon its execution by the authorized



28









 







representatives of the parties hereto on the date first written above.




29









 







Signature page of the Supplementation Agreement by and between China Huayou Group Corporation and
PetroChina Kunlun Gas Company Limited




The Transferor




China Huayou Group Corporation (company seal)



Signed by Legal Representatives or Authorized Representative:                                         



The Transferee:




PetroChina Kunlun Gas Company Limited (company seal)



Signed by Legal Representatives or Authorized Representative:                                         




30









 





English Translation of Chinese Original




Assets Transfer Agreement




By and between




China Huayou Group Corporation




And




PetroChina Kunlun Gas Limited




May 15, 2009





 









 








Assets Transfer Agreement




     This Assets Transfer Agreement is entered into this 15th day of May, 2009 in Beijing by and
between China Huayou Group Corporation (the “Transferor”), with its business license number being
10000000000237, registered address being at 6 Liupukang Street, Xicheng District, Beijing, and
legal representative being Wang Wencang, and PetroChina Kunlun Gas Limited (the “Transferee”), with
its business license number being 110000003132822, registered address being at Dugezhuang Village
East, Renhe Section, Shunyi District, Beijing and legal representative being Xiang Pingsheng.



     Whereas,




	 	(i)	 	the Transferor is an enterprise owned by the whole people incorporated on December
10, 1998;
	 
	 	(ii)	 	the Transferee is a limited liability company established under the laws of the PRC
on July 27, 2001; and
	 
	 	(iii)	 	the Transferor agrees to transfer to the Transferee, and the Transferee agrees to
acquire from the Transferor, the Target Assets legally owned by the Transferor, subject
to the terms and conditions of this Agreement.





     In accordance with the Contract Law of the People’s Republic of China, the Company Law of the
People’s Republic of China and other applicable laws and regulations, the Transferor and the
Transferee, after friendly negotiations, hereby reach agreement as follows on the acquisition of
the Target Assets by the Transferee from the Transferor, for mutual observance:



Article 1 Definitions




	 	 	 
	“Huayou Group”

	 	refers to China Huayou Group Corporation;
	 
	 	 
	“Kunlun Gas”

	 	Refers to  (PetroChina Kunlun Gas Limited);
	 
	 	 
	“Target Assets”

	 	refers to all the targets in the Transfer as specified in Article 2 hereof;
	 
	 	 
	“Transfer”

	 	refers to the transfer of the Target Assets by the Transferor to the
Transferee hereunder;
	 
	 	 
	“Appraisal Report”

	 	refers to the Assets Appraisal Report (Zhong Qi Hua Ping Bao Zi (2009) No.
031-01) with respect to the assets and liabilities of the Target Assets as
at the Appraisal Reference Date issued by China Enterprise Appraisal Co.,
Ltd. for the purpose of the Transfer;






- 32 -









 






	 	 	 
	“Supplemental Audit”

	 	refers to the audit conducted by Beijing Tianyuanquan Certified Public
Accountants Ltd. for the purposes of the Transfer with respect to the
profit and loss of the target company during the period from the Appraisal
Reference Date to the Audit Reference Date;
	 
	 	 
	“Appraisal
Reference Date”

	 	refers to August 31, 2008;
	 
	 	 
	“Audit Reference
Date”

	 	refers to April 30, 2009;
	 
	 	 
	“Completion”

	 	refers to the conveyance of the Target Assets as contemplated under
Article 5 hereof;
	 
	 	 
	“Completion Date”

	 	refers to the date determined by the parties on which the Completion shall
occur after the satisfaction of all the preconditions to the Completion as
set forth in Article 4 hereof;
	 
	 	 
	“PRC” or “China”

	 	the People’s Republic of China






Article 2 Target Assets




     The Target Assets consist of the city gas business-related assets owned by the Gas Business
Unit of the Transferor and any and all the assets, liabilities and equity associated therewith, as
set forth in detail in Exhibit 1 hereto.



Article 3 Consideration for Transfer of Target Assets




     The parties hereto agree and acknowledge that the consideration for the Transfer of the Target
Assets hereunder shall be RMB 417,600.00 (the “Consideration”), as determined based on the asset
valuation results filed with the State-owned Assets Supervision and Administration Commission or an
authorized branch thereof.



Article 4 Conditions Precedent to Completion





	 	4.1	 	The Completion hereunder shall occur on the Completion Date determined by the
parties hereto after all the following conditions have been satisfied:
	 
	 	4.1.1	 	This Agreement has been duly signed by the legal representative of each of the
Transferor and the Transferee or his/her respective authorized representative;
	 
	 	4.1.2	 	All necessary consents or approvals in connection with this Agreement and the
Target Assets have been obtained, including without limitation:










- 33 -









 













	 	(a)	 	The Transferor has obtained the approval to the Transfer from
its internal governing bodies;
	 
	 	(b)	 	The Transferee has obtained the approval to the Transfer from
its internal governing bodies;
	 
	 	(c)	 	The Transferor has obtained all the required consents to the
Transfer of the city gas business assets from any and all its creditors and any
other relevant third parties;
	 
	 	(d)	 	The valuation report on which the Consideration is based has
been confirmed by the Transferor and the Transferee and have been duly filed
with the SASAC;






	 	4.1.3	 	As at the Completion Date, the Transferor’s representations, warranties and
covenants contained herein shall remain true and accurate.





     4.2. The parties hereto shall use their reasonable efforts to ensure that all the conditions
precedent set forth above will be satisfied as soon as practicable and shall use their reasonable
efforts to procure the Completion will occur on or before 31 December 2009.



Article 5 Completion





	 	5.1	 	The Transferor shall, within a reasonable period, actively procure the fulfillment
of all the Completion conditions specified in Article 4 hereof (other than Section
4.1.2(b)), give a notice to the Transferee in writing requesting Completion to be
conducted and furnish copies of the documents/evidence indicating fulfillment of the
Completion preconditions and the proposed Completion Date.
	 
	 	5.2	 	The Transferee shall issue a letter in writing to the Transferor indicating its
agreement to the Completion within five (5) business days following its receipt of the
notice referred to in Section 5.1, and furnish to the Transferor copies of the
documents/evidencing indicating fulfillment of the Completion preconditions as set forth
in Section 4.1.2(b).
	 
	 	5.3	 	At the Completion Date, the Transferor shall deliver to the Transferee:






5.3.1 city gas business assets, and any and all the certificates, deeds, operating
licenses, and title documents or instruments evidencing that all the interest in the
ownership of and operating rights to the city gas business assets shall be fully
vested in the Transferor;




5.3.2 any and all the required third party consents necessary for the delivery of
the city gas business assets, including but not limited to, consents from relevant
creditors and approvals from relevant governmental authorities.



- 34 -









 






	 	5.4	 	Within five (5) business days following the execution of this Agreement, the
Transferee shall pay the Consideration in a lump sum to the Transferor in full in RMB to
a bank account designated by the Transferee.
	 
	 	5.5	 	As from the Completion Date, the Transferee shall obtain the Target Assets and all
the derivative interest arising therefrom in accordance with the applicable PRC laws, and
shall assume the rights and obligations under applicable laws and regulations and the
articles of association of the relevant companies.





Article 6 Alteration Registration Procedures for Target Assets




     The parties hereto agree to complete the alteration registration for the Target Assets as soon
as practicable after the Completion Date. The Transferor shall be obliged to render its
cooperation in and support to the Transferee’s re-application for the issuance of the certificates
of operating qualification or any other relevant qualifications, certificates or documents in
connection with the relevant assets, and assist the Transferee to complete the registration for the
transfer of the Target Assets as soon as practicable



Article 7 Representations, Warranties and Covenants of the Transferor





	 	7.1	 	The Transferor is an enterprise owned by the whole people duly established and
validly existing under the laws of the PRC. The Transferor legally owns the Target
Assets and has the right to transfer the Target Assets to the Transferee in accordance
with this Agreement.
	 
	 	7.2	 	The Transferor hereby warrants that there does not exist any encumbrance or any
other right restriction directly or indirectly created over the Target Assets, and the
Target Assets are not subject to any material action, claim, arbitration, administrative
procedures or any other contingent liabilities in any other form, whether known or
threatened.
	 
	 	7.3	 	The execution and performance of this Agreement by the Transferor do not violate
any contracts or agreements which are legally binding upon it.
	 
	 	7.4	 	The execution and performance of this Agreement by the Transferor do not violate
any applicable laws or regulations, or the Transferor’s articles of association or other
constitutional documents.
	 
	 	7.5	 	The Transferor hereby warrants that after the Audit Reference Date it will not
dispose of or adjust the Target Assets in a manner not consistent with the purpose of
this Agreement. The Transferor shall promptly notify the Transferee in writing of any
material change to the Target Assets other than in the ordinary course of business.
	 
	 	7.6	 	The Transferor undertakes to actively cooperate actively, and procure its Gas
Business Unit to cooperate with the Transferee to complete any and all legal or
administrative procedures in connection with the Transfer hereunder,





- 35 -









 





	 	 	 	including without limitation, the procedures for assets title transfer registration
or alteration registration.





Article 8 Representations, Warranties and Covenants of the Transferee





	 	8.1	 	The Transferee is a limited liability company duly established and validly
existing under PRC laws.
	 
	 	8.2	 	The execution and performance of this Agreement by the Transferee do not violate
any contracts or agreements which are legally binding upon the Transferee.
	 
	 	8.3	 	The execution and performance of this Agreement by the Transferee do not violate
applicable laws or regulations or its articles of association or any other constitutional
documents.





Article 9 Taxation




     Any and all the taxes and charges imposed in connection with the Transfer shall be solely paid
by the party incurring the same in accordance with applicable laws.



Article 10 Event of Default





	 	11.1	 	After this Agreement takes effect, if either party hereto fails to fulfill the
other obligations hereunder in accordance with the provisions hereunder, or any of its
representations or warranties is proved to be false, such party shall be deemed to be in
default. The defaulting party shall indemnify the non-defaulting party against any and
all the losses suffered by the non-defaulting party as a result of the above defaults.
	 
	 	11.2	 	After this Agreement takes effect, if the Transferor fails to transfer the Target
Assets in accordance with the provisions hereunder, the Transferee shall have the right
to cancel this Agreement. In such case, the Transferor shall indemnify the Transferee
against any and all the losses actually suffered by the Transferee, including without
limitation, any and all related expenses incurred by the Transferee in connection with
the transfer of the Target Assets.





Article 12 Confidentiality




     Both parties hereto shall treat any and all details regarding this Agreement and the agreed
assets Transfer, the relationship between the parties hereto and the documents provided as
confidential information (the “Confidential Information”). Without the prior written
consent of the other party, neither party hereto may disclose the Confidential Information to any
third party, except for any disclosure made to the relevant professional advisors or regulatory
authorities or required by the rules of the stock exchange on which the Transferee is listed. This
Article shall survive the expiration or any termination of this Agreement.



Article 12 Effectiveness, Amendment, Cancellation, Termination and Assignment





	 	12.1	 	Effectiveness




- 36 -









 











     This Agreement shall come into effect upon the execution by the authorized representatives of
both parties hereto on the date first written above.



     12.2 Amendment and Cancellation



     After execution, this Agreement may not be amended or cancelled by either party hereto without
written consent of the other party.



     12.3 Termination



     This Agreement may be terminated prior to Completion, if



          (a) the parties hereto reach an agreement on the termination of this Agreement; or




          (b) the Transferee discovers any issue that has an adverse effect on the Target Assets or the
Transferee itself, or any omission, or misleading, incomplete or inaccurate statement in any of the
representations, warranties or covenants of the Transferor, in such case, the Transferee is
entitled to terminate this Agreement at its sole discretion without any liabilities for breach of
contract.




     12.4 Assignment



     Without written consent of the other party, either party hereto may not assign any of its
rights or obligations hereunder to any third party.



Article 13 Force Majeure




     If either party is rendered unable to perform this Agreement in whole or in part as a result
of the occurrence of an event of force majeure, including an earthquake, typhoon, flood, fire, war
and any governmental interference, or a change of circumstances, it shall immediately notify the
other party hereto 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 this Agreement in
whole or in part or the reasons for the delayed performance, within seven (7) days following the
occurrence of such event. The parties shall negotiate whether to terminate this Agreement,
partially release or delay the performance of the affected obligations, according to the degree of
the impact of such event on the performance of this Agreement.



Article 14 Notices




     14.1 Notices required to be given by either party hereto under this Agreement shall be in
written form and given by fax, email, personal delivery or mail. Any such notice shall be sent to
the other party at its contact address, and shall contain sufficient statements and/or details
indicating its subject matter relating to this Agreement.



     The contact information of the parties hereto is as follows:



     The Transferor:



- 37 -









 






China Huayou Group Corporation




Address: 21/F, Celebrity Plaza, 101 Anli Road, Chaoyang District Beijing




Attention: Li Junfeng




Tel: 010-84836864




Fax: 010-84836852


The Transferee:





PetroChina Kunlun Gas Limited




Address: 5/F, Tower C, Grand Place, 5 Huizhong Road, Olympic Sports Center, Chaoyang
District, Beijing




Attention: Hu Yuxiang




Tel: 010-51238263




Fax: 010-51238255



     14.2 Notices given by fax, email or personal delivery shall be deemed effectively given on the
date of dispatch; unless the other party furnishes proof to the contrary evidencing that it has not
received any such notice as a matter of fact.



     14.3 Notices given by registered mail shall be deemed effectively given five (5) business days
following the dispatch; unless the other party furnishes the proof to the contrary evidencing that
it has not received any such notice as a matter of fact.



     14.4 If there are changes in the contact information of either party hereto, it shall give the
other party a written notice five (5) business days in advance.



Article 15 Governing Law and Dispute Resolution





	 	15.1	 	The execution, effectiveness, performance, interpretation and enforcement of this
Agreement as well as any and all issues in connection with this Agreement shall be
governed by the laws of the PRC.
	 
	 	15.2	 	Any dispute arising from, out of or in connection with this Agreement shall be
settled through friendly consultations between the parties hereto.





          This Agreement shall be executed in ten (10) counterparts with equal legal force, with each
party to hold five (5).





- 38 -









 







Signature page of the Assets Transfer Agreement by and between China Huayou Group Corporation and
PetroChina Kunlun Gas Limited




The Transferor




China Huayou Group Corporation (company seal)



Signed by Legal Representatives or Authorized Representative:                                         




The Transferee:




PetroChina Kunlun Gas Company Limited (company seal)



Signed by Legal Representatives or Authorized Representative:                                         





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Exhibit 1




Scope of City Gas Business-Related Assets



     The city gas business-related assets to be transferred hereunder consist of the city gas
business-related assets owned by the Gas Business Unit of the Transferor and any and all the
assets, liabilities and equity associated therewith, which specially include



As at August 31, 2008




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Net Value	 
	 	 	 	 	 	 	Date of	 	(in RMB	 
	Description	 	Specifications	 	Quantity	 	Acquisition	 	yuan)	 
	Car
	 	Jetta FV7160	 	1	 	Jan. 2006	 	 	85367.8	 
	Car
	 	Audi A6L2.4AT	 	1	 	Feb. 2003	 	 	93190.82	 
	Notepad computer
	 	SonyPCG-6C3P	 	2	 	Aug. 2004	 	 	537.60	 
	Projector
	 	sony VPL-X71	 	1	 	May 2005	 	 	4972.73	 
	Notepad computer
	 	SONY PCG-6C3P	 	1	 	May 2005	 	 	3389.41	 
	Desktop (Lenovo)
	 	Lenovo E6000	 	2	 	May 2005	 	 	5242.69	 
	DV duplicator, scanner
	 	HPScanjet8200	 	1	 	May 2005	 	 	1808.46	 
	Desktop
	 	HP DC7600	 	4	 	Jun. 2006	 	 	18983.92	 
	Notepad computer
	 	Lenovo 100A	 	1	 	Jun. 2006	 	 	6195.04	 
	HP Pavilion
	 	HP G3218CX	 	2	 	Dec. 2007	 	 	10398.76	 
	Color printer
	 	HP 4700DN	 	1	 	May 2008	 	 	21564.58	 
	Black and white printer
	 	HP 5200	 	1	 	May 2008	 	 	8821.87	 
	Fax machine
	 	Cannon L388	 	1	 	Dec. 2003	 	 	75.23	 
	Digital camera
	 	sonyT1	 	1	 	Aug. 2004	 	 	934.04	 
	Photocopier
	 	e-Studio358	 	1	 	Aug. 2004	 	 	6325.06	 







 40