China Automation : (032) Material Contract - Shareholders' Agreement of Etern Group

SHAREHOLDERS' AGREEMENT

among

ASCENDENT HEALTHCARE (CAYMAN) LIMITED, CHINA AUTOMATION GROUP LIMITED,

and

ETERN GROUP LTD.

________________________________

Dated 26 July , 2017

_______________________________

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TABLE OF CONTENTS
	Page
SECTION 1 INTERPRETATION .............................................................................	1
SECTION 2 BUSINESS OF THE COMPANY AND OBLIGATIONS OF THE
SHAREHOLDERS ..............................................................................	5
SECTION 3 RESTRICTIONS ON TRANSFER OF SHARES ..............................	6
SECTION 4 CORPORATE GOVERNANCE ..........................................................	7
SECTION 5 GENERAL AFFAIRS OF THE GROUP ..........................................	11
SECTION 6 REPRESENTATIONS AND WARRANTIES ..................................	12
SECTION 7 CONFIDENTIALITY AND RESTRICTION ON
ANNOUNCEMENTS ........................................................................	13
SECTION 8 TERM AND TERMINATION ...........................................................	15
SECTION 9 NOTICES..............................................................................................	15
SECTION 10 MISCELLANEOUS ..........................................................................	16
SECTION 11 GOVERNING LAW ..........................................................................	18

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THE SHAREHOLDERS' AGREEMENT (this "Agreement") is made on 26th July 2017

AMONG:

1. Ascendent Healthcare (Cayman) Limited, an exempted limited liability company incorporated under the laws of the Cayman Islands and the registered address of which is Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands ("Ascendent");
2. China Automation Group Limited, an exempted limited liability company incorporated under the laws of the Cayman Islands and the registered address of which is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands ("CAG"); and
3. Etern Group Ltd., an exempted limited liability company incorporated under the laws of the British Virgin Islands and the registered address of which is at the offices of Intertrust Corporate Services (BVI) Limited, 171 Main Street, Road Town, Tortola VG1110, British Virgin Islands (the "Company").

RECITALS:

1. Ascendent is the registered and beneficial owner of 400 shares of US$1.00 par value each in the Company, representing 40% of the entire issued share capital of the Company. CAG is the registered and beneficial owner of 600 shares of US$1.00 par value each in the Company, representing 60% of the entire issued share capital of the Company.
2. The parties have agreed to enter into this Agreement to record the terms governing the management of the Company.
   AGREEMENT:

SECTION 1

INTERPRETATION

1.1 Definitions. In this Agreement, unless the context otherwise requires, the following words and expressions have the following meanings:

"Acquisition Agreement" means the agreement for the sale and purchase of 60% of the Company's interest entered into by Ascendent and CAG on 30 March 2017 (as amended by the supplemental agreement to the Acquisition Agreement dated 23 June 2017).

"Affiliate" means

1. with respect to an individual: (i) any member of that individual's Family; (ii) any person that is directly or indirectly Controlled by that individual and/or one

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or more members of that individual's Family; (iii) any person in which such individual and/or members of such individual's Family hold (individually or in the aggregate) a Material Interest; and (iv) any person with respect to which such individual and/or one or more members of such individual's Family serves as a partner, executor or trustee (or in a similar capacity);

1. with respect to a person other than an individual: (i) any other person that directly or indirectly Controls, is directly or indirectly Controlled by, or is directly or indirectly under common Control with that first person; (ii) any other person that holds a Material Interest in that first person; (iii) each person that serves as a director, officer, partner or trustee of that first person (or in a similar capacity); (iv) any person in which that first person holds a Material Interest; (v) any person with respect to which that first person serves as a general partner; (vi) any Affiliate of any individual described in (ii) or (iii) above.

For purposes of this definition, (a) the "Family" of an individual includes (i) the individual, (ii) the individual's spouse and former spouses, (iii) any other natural person who is related to the individual or the individual's spouse within the second degree, and

1. any other natural person who resides with such individual, and (b) "Material Interest" means direct or indirect beneficial ownership of voting securities or other voting interests representing at least ten per cent. (10%) of the outstanding voting power of a person or equity securities or other equity. interests representing at least per cent. (10%) of the outstanding equity securities or equity interests in a person.

"Amended and Restated Company Charter Documents" means the Amended and Restated Memorandum and Articles of Association of the Company.

"Board" means the board of Directors of the Company.

"Business Day" means a day (other than a Saturday or a Sunday) on which banks are open for business in Hong Kong and the PRC.

"Charter Documents" means, with respect to any Person, the Memorandum of Association, Articles of Association, Certificate of Incorporation, Articles of Incorporation, Bylaws or other relevant organizational documents of such Person, and includes, with respect to the Company, the Amended and Restated Company Charter Documents.

"Connected Person" shall have the meaning set forth in Chapter 14A of the Listing Rules.

"Control" of a Person means with respect to a non-natural person, direct or indirect ownership of more than fifty per cent. (50%)·of the outstanding voting securities of such person or the ability to appoint more than half of the directors of the board or equivalent governing body of such person or the ability, direct or indirect, to direct or cause the direction of the management and policies of such person; and the terms "Controls", "Controlling" and "Controlled" shall have corresponding meanings.

"Deed of Adherence" means the deed of adherence attached hereto as Exhibit A.

"Director" means a director of the Company.

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"Encumbrance" means any mortgage, charge (fixed or floating), pledge, lien, option, right to acquire, right of pre-emption, assignment by way of security or trust arrangement for the purpose of providing security or other security interest of any kind (including any retention arrangement), or any agreement to create any of the foregoing.

"Governmental Authority" means any transnational, domestic or foreign federal, state or local governmental, regulatory, judicial or administrative authority, department, court, tribunal, commission, agency or official, including any political subdivision thereof and including any national securities exchange, in each case, having competent jurisdiction over the relevant matter and person.

"Group" means, collectively, the Company and the Subsidiaries, and "Group Member" means any of them.

"HKFRS" means the Hong Kong Financial Reporting Standards.

"Hong Kong" means the Hong Kong Special Administrative Region of the PRC.

"IFRS" means the international accounting standards or the international financial reporting standards prescribed by the International Accounting Standards Board and its successors.

"Listing Rules" means The Rules Governing the Listing of Securities on the Stock Exchange.

"Party" or "Parties" means any signatory or the signatories to this Agreement and any Person that subsequently becomes a party to this Agreement as provided herein.

"Person" means any natural person, firm, company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality).

"PRC" means the People's Republic of China and for the purpose of this Agreement shall exclude Hong Kong, Taiwan and the Special Administrative Region of Macau.

"PRC GAAP" means the generally accepted accounting principles in the PRC.

"RMB" means the Renminbi Yuan, the lawful currency of the PRC.

"ROFO Proportion" means, with respect to any one ROFO Offeree, the proportion that the number of Shares held by such ROFO Offeree bears to the aggregate number of Shares held by all ROFO Offerees in each case on a fully diluted basis.

"SFC" means the Securities and Futures Commission of Hong Kong.

"Shares" means the ordinary shares with par value of US$1.00 each in the share capital of the Company.

"Shareholders" means (i) Ascendent, (ii) CAG and (iii) any other Person that becomes a holder of Shares in accordance with the terms of this Agreement and executes a Deed of Adherence substantially in the form attached hereto as Exhibit A, in each case for so long as such Person remains a holder of any Shares, and in the case of any Shareholder

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