11:52 CHINA EAST AIR<00670> - Announcement (9) To accommodate the anticipated expansion in the Enlarged Group's daily and business operations following completion of the Proposed Acquisition, and to promote enhanced compliance with the applicable requirements under Chapter 14A of the Listing Rules, the Company (for itself and on behalf of other members of the Enlarged Group) has entered into various agreements with certain members of the CEA Holding Group in respect of the Continuing Connected Transactions and certain other transactions. Such agreements are made to further regulate the expected continuing business relationships between the Enlarged Group, on the one hand, and the CEA Holding Group, on the other. These agreements are as follows: Agreements Counterparties and connected person relationship - Property Leasing Agreement CEA Holding, CEA Northwest and CEA Yunnan - Financial Services Agreement * (Eastern Air Group Finance Company Limited) (the "Finance Company"), which is interested as to approximately 46.25% by, and thus an associate of, CEA Holding - Import and Export Agency Agreement *(Eastern Aviation Import & Export Company) (the "Import & Export Company"), which is interested as to 55% by, and thus an associate of, CEA Holding - Maintenance Services Agreement * Shanghai Eastern Aviation Equipment Manufacturing Corporation) (the "Maintenance Company"), which is a wholly-owned subsidiary, and thus an associate, of CEA Holding - Catering Services Agreements A number of subsidiaries or associates of CEA Holding (collectively, the "Catering Companies") - Sales Agency Services Agreements A number of subsidiaries or associates of CEA Holding (collectively, the "Sales Companies") - Advertising Services Agreement *(Shanghai Eastern Aviation Advertising Company Limited) (the "Advertising Company"), which is interested as to 55% by, and thus an associate of, CEA Holding These agreements and the Continuing Connected Transactions are expected to constitute, or may in the on-going performance become, non-exempt continuing connected transactions of the Company under Chapter 14A of the Listing Rules, and such transactions, together with the associated annual caps, will be subject to approval by the Independent Shareholders at the AGM. Details of the Continuing Connected Transactions and the associated annual caps, and certain principal terms of the relevant agreements, are set out below as required under the Listing Rules. Certain charges for the services under the agreements are determined based on tariffs, if available and applicable, set by the relevant PRC or industry regulatory authorities. Those transactions where the charges are not set by reference to prescribed regulatory tariffs are determined based on commercial negotiations between the parties, in each case on an arm's length basis. The terms of these transactions are, as currently anticipated, no less favourable than the terms as may be available to the Enlarged Group from independent third parties. In compliance with the relevant requirements under the Listing Rules, the Company has set maximum annual consideration or values, or annual caps, in respect of each of the Continuing Connected Transactions. These annual caps are, to the extent appropriate, determined by reference to factors including previous transactions and figures when available and readily ascertainable. Nonetheless, since the Group's business and financial positions were adversely affected by the outbreak of atypical pneumonia (severe acute respiratory syndrome, or SARS) in 2003, the relevant historical figures for the financial year of 2003 may therefore to a certain extent be compromised, and might not necessarily be indicative of the position had the Group's operations not been affected by SARS. The various existing agreements between the Company and the relevant members of the CEA Holding Group in respect of the provision of goods and services between the Group and the CEA Holding Group will each be terminated at the time when the relevant agreement in respect of the corresponding Continuing Connected Transaction becomes effective in accordance with its terms.