China Automation : (033) Shareholdersíª and Bondholdersíª Agreement

Execution Copy

DATED 14 June 2019

ASCENDENT AUTOMATION (CAYMAN) LIMITED

ASCENDENT HEALTHCARE (CAYMAN) LIMITED

ARACO INVESTMENT LIMITED

BRIGHTEX ENTERPRISES LIMITED

XUAN RUI GUO

and

CHINA AUTOMATION GROUP LIMITED

SHAREHOLDERS' AND BONDHOLDERS' AGREEMENT

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	CONTENTS
1	INTERPRETATION.................................................................................................................	3
2	CORPORATE GOVERNANCE ............................................................................................	10
3	MEETINGS OF SHAREHOLDERS......................................................................................	13
4	RESTRICTION ON TRANSFER OF CAG SHARES...........................................................	14
5	PRE-EMPTIVE RIGHT AND ANTI-DILUTION.................................................................	20
6	REPRESENTATIONS AND WARRANTIES.......................................................................	22
7	GUARANTEE ........................................................................................................................	23
8	AMENDMENTS TO THE CB TERMS.................................................................................	23
9	TERM AND TERMINATION ...............................................................................................	26
10	NOTICES................................................................................................................................	26
11	COSTS AND EXPENSES......................................................................................................	27
12	GENERAL PROVISIONS .....................................................................................................	27
13	ANNOUNCEMENTS.............................................................................................................	29
14	CONFIDENTIALITY.............................................................................................................	29
15	CONSTITUTION AND SUPREMACY ................................................................................	30
16	LANGUAGE ..........................................................................................................................	30
17	COUNTERPARTS .................................................................................................................	31
18	GOVERNING LAW AND ARBITRATION .........................................................................	31
Schedule 1 FORM OF AMENDED AND RESTATED ARTICLES..................................................	33
Schedule 2 RESERVED MATTERS...................................................................................................	34
Schedule 3 DEED OF ADHERENCE .................................................................................................	35

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THIS SHAREHOLDERS' AND BONDHOLDERS' AGREEMENT (THIS "AGREEMENT") is made on June 14 , 2019

BETWEEN:

1. Ascendent Automation (Cayman) Limited, an exempted company incorporated with limited liability in the Cayman Islands, whose registered office is at c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1- 9008, Cayman Islands ("AACL");
2. Ascendent Healthcare (Cayman) Limited, an exempted company incorporated with limited liability in the Cayman Islands, whose registered office is at Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands ("ACP Healthcare" and together with AACL, the "ACP Holders" and each, an "ACP Holder");
3. Araco Investment Limited, a BVI business company incorporated in the British Virgin Islands, whose registered office is at Morgan & Morgan Building, Pasea Estate, Road Town, Tortola, British Virgin Islands with BVI Company Number:1907170 ("Araco");
4. Brightex Enterprises Limited, a BVI business company incorporated in the British Virgin Islands, whose registered office is at Morgan & Morgan Building, P.O. Box 958, Pasea Estate, Road Town, Tortola, British Virgin Islands with BVI Company Number 1904314 ("Brightex Enterprises");
5. Xuan Rui Guo (宣瑞國), an individual holding the passport of the People's Republic of China (No: E05163617), whose address is 20A Building 1, Fenglin Lvzhou, Datun Road, Chaoyang District, Beijing, the PRC ("Mr. Xuan" and together with Araco and Brightex Enterprises, the "Management Holders" and each, a "Management Holder"); and
6. China Automation Group Limited, an exempted company incorporated in the Cayman Islands with its registered office at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands, and its issued CAG Shares are listed on the Main Board of the HKSE (Stock Code: 569) ("CAG"),

each a "Party" and together the "Parties".

WHEREAS:

1. As of the date of this Agreement, CAG has an authorised share capital of HK$30,000,000 divided into 3,000,000,000 ordinary shares of a par value of HK$0.01 per share, of which 1,026,263,729 CAG Shares (as defined below) are in issue and are fully paid or credited as fully paid.
2. As of the date of this Agreement: (i) AACL holds 248,235,132 Shares and has the right to exchange the Loan (as defined below) into CAG Shares held by Araco pursuant to the Facility Agreement; (ii) ACP Healthcare holds convertible bonds (the "Convertible Bonds") in the principal amount of RMB675,588,000 issued by CAG on 30 March 2017, which are convertible into CAG Shares pursuant to the terms and conditions of the Convertible Bonds (the "CB Terms"); (iii) Araco holds 515,696,164 CAG Shares; and (iv) Mr. Xuan holds 1,000,000 CAG Shares in his own name.

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1. Brightex Enterprises and ACCL as joint offerors propose to privatize CAG by way of a scheme of arrangement under section 86 of the Companies Law and to withdraw the listing of CAG Shares from the HKSE (the "Scheme") pursuant to a consortium agreement entered into by and among AACL, Araco and Brightex Enterprises dated on or about 14 June 2019 (the "Consortium Agreement").
2. AACL, Araco and Brightex Enterprises entered into a shareholders' agreement dated as of 24 April 2019 (the "Pre-DelistingSHA") to regulate certain corporate governance rights relating to CAG before the Delisting Date (as defined below).
3. The Parties have agreed to enter into this Agreement to regulate certain corporate governance rights relating to CAG effective from and after the Delisting Date.

IT IS AGREED as follows:

1 INTERPRETATION In this Agreement:

"AACL" has the meaning given to it in the Preamble;

"Acceptance Notice" has the meaning given to it in Clause 4.5(d).

"ACP Director" or "ACP Directors" has the meaning given to it in Clause 2.2(a); "ACP Healthcare" has the meaning given to it in the Preamble;

"ACP Holder" or "ACP Holders" has the meaning given to it in the Preamble; "ACP Tag Along Right" has the meaning given to it in Clause 4.6(a);

"Ascendent Fund I" means Ascendent Capital Partners I, L.P. an exempted limited liability partnership formed and existing under the laws of the Cayman Islands, whose office registered address is c/o Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue, George Town, Grand Cayman KYI-9005, Cayman Islands;

"Ascendent Fund II" means Ascendent Capital Partners II, L.P. an exempted limited liability partnership formed and existing under the laws of the Cayman Islands, whose office registered address is c/o Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue, George Town, Grand Cayman KYI-9005, Cayman Islands;

"Affiliate" means:

1. in relation to an individual, that individual's relatives (whether close or distant, including any spouse, child (including adopted child and step-child), parent or sibling of that individual), any person which is Controlled by that individual and/or that individual's relatives (whether close or distant and whether acting singly or together) ("Controlled Entity") and any Affiliate of a Controlled Entity;
2. in relation to any other person, any other person that (directly or indirectly) Controls, is Controlled by or is under common Control with such person; and

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1. In the case of any ACP Holder, the term "Affiliate" also includes (i) any direct or indirect shareholder of such ACP Holder, (ii) any of such shareholder's general partners or limited partners, and (iii) the fund manager managing such shareholder (and general partners, limited partners and officers thereof);

"Amended and Restated Articles" means the amended and restated memorandum and articles of association of CAG in the form set out in Schedule 1;

"Araco" has the meaning given to it in the Preamble;

"Articles" means, at any time, the memorandum and articles of association (or other constitutional documents of CAG at that time (including the Amended and Restated Articles, if applicable which shall be adopted following the delisting of CAG on the Main Board of the HKSE));

"Authorisation" means any license, permit, consent, authorisation, permission, clearance, warrant, confirmation, certificate, order, exemption or approval of any Authority or any other person;

"Authority" means any competent governmental, administrative, supervisory, regulatory, judicial, determinative, disciplinary, enforcement or tax raising body, authority, agency, board, department, court or tribunal of any jurisdiction (including any relevant securities exchange) and whether supranational, national, regional or local;

"Board" means the board of Directors of CAG;

"Brightex Enterprises" has the meaning given to it in the Preamble;

"Business" means the business and operations of the CAG Group;

"Business Day" means a day on which banks are generally open for business in Hong Kong (other than a Saturday, Sunday or a public holiday or a day on which a tropical cyclone warning No. 8 or above or a "black rainstorm warning signal" is hoisted or remains hoisted in Hong Kong at any time between 9:00 am and 5:00 pm);

"CAG" has the meaning given to it in the Preamble;

"CAG Group" means CAG and its subsidiaries from time to time, and "member of the CAG Group" shall be construed accordingly;

"CAG Share(s)" means ordinary shares of HK$0.01 each in the capital of CAG or shares of any class or classes resulting from any subdivision, consolidation or re-classification of those shares;

"CAG Shareholder" means a holder of CAG Shares or any options, warrants, notes, bonds, loans or other securities that are convertible, exercisable or exchangeable into CAG Shares (including the Convertible Bonds and the Loan);

"Cancellation Price" has the meaning given to it in the Consortium Agreement;

"CB Terms" has the meaning given to it in the Recitals; 4

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