Document:

Word 8.0 Generic Normal Template, rev. 4/1/97, The Legal MacPac

EXHIBIT 10.2
NONQUALIFIED SUPPLEMENTAL
DEFERRED COMPENSATION PLAN
ADOPTION AGREEMENT
This adoption agreement and the accompanying plan document have not been approved by the Department of Labor, Internal Revenue Service, Securities Exchange Commission, or any other governmental entity. Employers may not rely on this document or the accompanying plan document to ensure any particular tax consequences with respect to the Employer’s particular situation, nor do these documents constitute legal or tax advice. Pen-Cal and its employees cannot provide legal or tax advice in connection with these documents. Employers must determine the extent to which the Plan is subject to Federal or state securities laws. You should have your attorney review this document and the accompanying plan document before adopting the documents. This adoption agreement and accompanying plan document cannot be used in order to avoid penalties that may be imposed on the taxpayer.
​

NONQUALIFIED SUPPLEMENTAL
DEFERRED COMPENSATION PLAN
ADOPTION AGREEMENT
ADOPTION OF PLAN – [Select one]
	☐
	Adoption – The undersigned           (the “Employer”) hereby adopts as a Nonqualified Deferred Compensation Plan for the individuals identified in Item 5 herein the form of Plan known as the Nonqualified Supplemental Deferred Compensation Plan.

	☒
	Amendment of Previous Nonqualified Deferred Compensation Plan – With “Grandfathered” Amounts – C&F Financial Corporation (the “Employer”) previously has adopted a Nonqualified Deferred Compensation Plan, known as the VBA Executive Deferred Compensation Plan for C&F Financial Corporation and VBA Director’s Non-Qualified Deferred Compensation Plan for Directors [enter name of previous plan], and the execution of this Adoption Agreement constitutes an amendment to that Plan, effective only for Deferrals, Contributions, earnings, gains, losses, depreciation and appreciation vested and credited thereto or debited therefrom on and after the Effective Date listed in Section 2 below, or, if otherwise determined by the Employer, on and after January 1, 2005 with respect to Plan provisions required under Section 409A of the Internal Revenue Code and the regulations thereunder. All other amounts in the plan shall be subject to the provisions of the previous plan document. This option is appropriate if the previous plan contains grandfathered amounts not subject to Section 409A of the Internal Revenue Code. Grandfathered amounts were contributed to the plan prior to January 1, 2005 under the terms of the plan in effect prior to October 4, 2004, and those plan terms have not since been materially modified. Grandfathered amounts and earnings will be administered under the terms of the prior plan document.

	☐
	Restatement of Previous Nonqualified Deferred Compensation Plan –            (the “Employer”) previously has adopted a Nonqualified Deferred Compensation Plan, known as the             [enter name of previous plan], and the execution of this Adoption Agreement constitutes a restatement of that Plan, effective as of the Effective Date listed in Section 2 below for all funds under the Plan. This option is appropriate if the previous plan does not contain “grandfathered” amounts (see description above), or if Employer wishes to apply Section 409A rules to all amounts in the plan (even pre-2005 amounts), or if previous plan has been materially modified and thus become subject to Section 409A.

NAME OF PLAN
The name of this Plan as adopted by the Employer is the [enter name of Plan] C&F Financial Corporation Non-Qualified Deferred Compensation Plan for Directors and Executives (the “Plan”).

- 2 -

INDIVIDUALIZED PLAN INFORMATION
With respect to the variable features contained in the Plan, the Employer hereby makes the following selections granted under the provisions of the Plan:
	1.
	Adopting Entity. The Employer adopts the Plan as:

List type of business entity (corporation, partnership, controlled group of corporations, etc.) Corporation
List each Employer adopting the Plan and Employer Identification Number (EIN):
	​

	​

	​

	​

	Name of Employer:
	C&F Financial Corporation
	EIN:
	54-1680165

	Name of Employer:
	Citizens and Farmers Bank
	EIN:
	54-0169510

	Name of Employer:
	C&F Mortgage Corporation
	EIN:
	54-1773964

	Name of Employer:
	C&F Finance Company
	EIN:
	54-0544169

	Name of Employer:
	​
	EIN:
	​

(attach additional lists as necessary)
The adopting Employers and the Employer are referred to herein collectively as the “Employer.”
Select state of controlling law (see Section 10.7 of Plan Document):
		☒
	State of incorporation; VA

		☐
	State of domicile                    

2.Effective Date.The “Effective Date” of the adoption of this Plan, this Plan amendment or this Plan restatement is [enter date] January 1, 2023.
	3.
	Plan Year. The “Plan year” of the Plan shall be [select one]:

		☒
	(a) the calendar year.

		☐
	(b) the fiscal year or other 12-month period ending on the last day of [specify month].

		☐
	a short Plan year beginning on                 ,           and ending on                  ,         ; and thereafter the Plan year shall be as indicated in (a) or (b) above.

	4.
	Plan Administrator. The “Administrator” of the Plan is Any of the CEO, CFO, Compensation Committee or Board of Directors of C&F Financial Corporation

[fill in the name(s) of the individual(s) or job title(s) or entity (such as a committee) that is (are) responsible for administration of the Plan], and such other person(s) or entity as the Employer shall appoint from time to time.

- 3 -

	5.
	Eligible Individuals. The following shall be eligible to participate in the Plan: [select all that apply – do not list individual names]:

		☐
	A select group of management or highly-compensated Employees as designated by the Employer in separate resolutions or agreements;

		☒
	Employee Board Members;

		☒
	Non-Employee Board Members;

		☐
	Other Service Providers (i.e., independent contractors, consultants, etc.)

		☐
	Employees or other Service Providers above the following Compensation threshold: [enter dollar amount] $            ;

		☐
	Employees with the following job titles: [enter job title(s); for example, “Vice President and above”]                  

		☒
	Other: [enter description] Participation in the Plan shall be limited to a select group of management and key employees of the Company, as determined by the Compensation Committee, Board of Directors or the CEO of C&F Financial Corp

	6.
	Eligibility Timing. Eligibility timing selected below shall apply uniformly to all Participant Deferrals (including Performance-Based Bonus Deferrals), as well as Employer Matching Contributions and Other Employer Contributions, unless otherwise indicated. If the Employer wishes to provide for separate eligibility rules for different types of Compensation (for example, Salary vs. Bonus), or for types of Contributions (for example, Employer Matching Contributions vs. Participant Deferrals), mark “Other” below and attach exhibits as necessary [select one]:

		☐
	Eligible immediately upon properly completed designation by the Plan administrator or Employer;

		☐
	Eligible after the following period of employment, Board service, etc. [enter number of days, months or years, for example, 90 days]                ;

		☒
	Other [enter description]: Eligibility begins first of month following employee designation or appointment as director

	7.
	Types and Amounts of Participant Deferrals [select all that apply and enter minimum and maximum percentages in increments of one percent (for example, Salary minimum 0% maximum 100%). Note that no Deferral election can reduce a Participant’s Compensation below the amount necessary to satisfy required withholding for FICA/Medicare/income taxes, required Participant Contributions into another Employer-sponsored benefit plan such as medical insurance, 401(k) loan repayments, etc.]:

		☒
	Salary [select one]:

		☒
	percentage [enter minimum 0% and maximum 100%]

or
		☒
	fixed dollar amount [enter minimum $            ].

- 4 -

		☒
	Non-Performance-Based Bonus [select one]:

		☒
	percentage [enter minimum 0% and maximum 100%]

or
		☒
	fixed dollar amount [enter minimum $          ].

		☒
	Performance-Based Bonus [select one and enter performance period (for example, 12-month period ending each March 31 ]: performance period from 1/1 to 12/31.

		☒
	percentage [enter minimum 0% and maximum 100%]

or
		☒
	fixed dollar amount [enter minimum $          ].

		☒
	Commissions [select one]:

		☒
	percentage [enter minimum 0% and, maximum 100%] 

or
		☒
	fixed dollar amount [enter minimum $           ].

		☒
	Board of Directors Fees/Retainer (note – should not include expense reimbursements):

		☒
	percentage [enter minimum 0% and, maximum 100%]

or
		☒
	fixed dollar amount [enter minimum $           ].

		☐
	Other Service Provider Fees or other earned income from the Employer:

		☐
	percentage [enter minimum         % and, maximum         %]

or
		☐
	fixed dollar amount [enter minimum $         ].

		☐
	401(k) Refund (amount deferred from Participant’s regular Compensation equal in value to any refund paid to Participant in that year resulting from excess deferrals in Employer’s 401(k) plan – see Subsection 2.9 of Plan document for definition.)

		☐
	Social Security Trigger (amount deferred pursuant to an election by the Participant to defer a separate percentage of Compensation only from that portion of Compensation that exceeds the Social Security Taxable Wage Base for the upcoming year).

		☒
	Other [enter description]: 1. Excess 401(k) – Participants may defer up to 100% of their Compensation beginning after their 401(k) contribution has reached the IRS maximum for the year. 2. Participants may elect to defer up to 100% of their YTD Compensation over a specific dollar amount

		☐
	Deferral of restricted stock units.

- 5 -

NOTE: Special Rules for Multi-Year RSU Grants Structured To Provide For Annual Vesting of a Specified Portion of the Total Grant:
☐Check this box if the Employer wishes to allow for deferral of restricted stock units that are structured so that a specified portion of the RSU grant vests annually (for example, an RSU grant over a four-year period vesting 25% annually). Under this type of grant, the election to defer may be made separately with respect to each portion of the grant that vests in a given year. However, each election for each portion of the grant must be made either: (i) within 30 days of the date of grant or each anniversary thereof, and only if the RSU is structured so that vesting is contingent on the employee performing services for at least an additional 12 months subsequent to the election; or (ii) 12 months before the payment date of the RSU (vesting date is treated as the payment date for these purposes), but the election will not take effect for 12 months, and the subsequent payout date must be at least five years later than the previous payment date).
	8.
	Definition of Compensation for Purposes of Making Plan Contributions [select one]:

		☐
	Same definition of Compensation as in Employer’s 401(k) or other applicable qualified retirement plan.

		☒
	Participant’s total wages, salary, commissions, overtime, bonus, etc. for a given year which the Employer is required to report on Form W-2 or other appropriate form, (or, in the case of Board members, Board fees and retainer only, but not including expense reimbursements)(or, in the case of Other Service Providers, the Participant’s total remuneration from the Employer for a given year pursuant to the agreement to provide services to the Employer), earned while the Participant is an Eligible Individual as determined by the Employer.

		☐
	Other [enter description]:               

	9.
	Expiration of Participant’s Deferral Elections [select all that apply]:

		☒
	Renewed Each Year: Participant’s Deferral Elections must be renewed each year during the open enrollment period ending no later than December 31 prior to the effective Plan year (or, in the case of Performance-Based Bonuses, no less than 6 months prior to the end of the applicable performance period).

		☒
	For all types of Compensation Deferrals.

		☐
	For Salary Deferrals only – other types of Deferrals are “evergreen.”

		☐
	For Performance-Based Bonus only – other types of Deferrals are “evergreen.”

		☐
	Other: [specify]              

- 6 -

		☐
	Evergreen: Participant’s Deferral Elections will be “evergreen” (i.e., will continue indefinitely until the Participant’s Termination Date unless changed by the Participant – so each year the Participant will be deemed to have the same election in place as the prior year unless actively changed by the Participant during the open enrollment period ending no later than December 31 prior to the effective Plan year or, in the case of Performance-Based Bonuses, no less than 6 months prior to the end of the applicable performance period).

		☐
	For all types of Compensation Deferrals.

		☐
	For Salary Deferrals only – other types of Deferrals are renewed each year.

		☐
	For Performance-Based Bonus only – other types of Deferrals are renewed each year.

		☐
	Other: [specify]              

	10.
	Employer Contributions [select all that apply]:

☐(a)No Employer Contributions.
☐(b)Matching Contributions [enter description of matching formula below and also complete Items 11 and 12]
                                                                 
☒(c)Employer Contributions other than Matching Contributions [enter description of Employer Contribution formula below and complete Item 13]
The Employer may make SERP Employer Non-Elective Contributions as described in Attachment A to this Adoption Agreement.
	11.
	Employees Eligible to Receive Employer Matching Contributions. Matching Contributions made for each Plan Year (if applicable) shall be allocated and credited to the Accounts of the following Participants: [Select one if applicable]

		☐
	Participants who were employed by the Employer (or, in the case of non-Employee Board Members, served on the Board) during that Plan Year, or, in the case of Other Service Providers, who provided services to the Employer during that Plan Year.

		☐
	Participants who were employed by the Employer (or, in the case of non-Employee Board Members, served on the Board) on the last day of the Plan Year, or, in the case of Other Service Providers, who provided services to the Employer on the last day of the Plan Year.

		☐
	Participants who were employed by the Employer (or, in the case of non-Employee Board Members, served on the Board) on the last day of the Plan Year or who retired, died or were Disabled during the Plan Year, or, in the case of Other Service Providers, who provided services to the Employer on the last day of the Plan Year or who died or were Disabled during the Plan Year. [If this option is selected, complete Item 29 – definition of “Disability”.]

- 7 -

	12.
	Vesting Schedule of Employer Matching Contributions. If Matching Contributions are made to the Plan, select the rate at which such Contributions will vest [select one]:

		☐
	Immediate 100% vesting for all Participants.

		☐
	“Cliff” vesting (0% up to cliff; 100% after cliff) [select one]:

		☐
	1 year cliff (less than 1 year 0%; 1 or more years 100%)

		☐
	2 year cliff (less than 2 years 0%; 2 or more years 100%)

		☐
	Other cliff (enter number of years: less than                  years 0%;                or more years 100%)

		☐
	“Graded” vesting [enter vesting percentages]:

	​

	​

	​

	1 year      %
	6 years      %
	11 years      %

	2 years      %
	7 years      %
	12 years      %

	3 years      %
	8 years      %
	13 years      %

	4 years      %
	9 years      %
	14 years      %

	5 years      %
	10 years      %
	15 years      %

		☐
	Other vesting schedule: [describe schedule – subject to approval]            

	13.
	Vesting Schedule of Employer Contributions (Other Than Matching Contributions). If Employer Contributions (other than Matching Contributions) are made to the Plan, select the rate at which such Contributions will vest [select one]:

		☐
	Immediate 100% vesting for all Participants.

		☐
	“Cliff” vesting (0% up to cliff; 100% after cliff) [select one]:

		☐
	1 year cliff (less than 1 year 0%; 1 or more years 100%)

		☐
	2 year cliff (less than 2 years 0%; 2 or more years 100%)

		☐
	Other cliff (enter number of years: less than           years 0%;            or more years 100%)

		☐
	“Graded” vesting [enter vesting percentages]:

	​

	​

	​

	1 year      %
	6 years      %
	11 years      %

	2 years      %
	7 years      %
	12 years      %

	3 years      %
	8 years      %
	13 years      %

	4 years      %
	9 years      %
	14 years      %

	5 years      %
	10 years      %
	15 years      %

☒Other vesting schedule: [describe schedule – subject to approval] See Option 15 and Attachment A to this Adoption Agreement.

- 8 -

	14.
	Vesting Years. A “Vesting Year” described above for purposes of determining vesting under the Plan shall be computed in accordance with: [select one – if this is an amendment or restatement of a prior plan, definition from prior plan will override this definition.]

		☐
	Years of service (12-consecutive-month periods) with the Employer since date of hire (or date of commencement of Board service).

		☐
	Years of participation in the Plan (12-consecutive-month period between date Participant enters Plan and anniversary of such date) (if this is an amendment or restatement of a prior Plan, years of participation in prior plan will be included) (additional fees will apply if this item is selected).

		☐
	Plan Years since each Plan Year’s total Contributions were made (“rolling vesting”) (additional fees will apply if this item is selected). [If this option is selected, select either (a) or (b) below:]

☐(a)Vesting will be credited/updated on the last day of the Plan year.
☐(b)Vesting will be credited/updated on the anniversary of the date the Contribution is credited.
	15.
	Full Vesting Upon Occurrence of Specific Event. [select all that apply]

		☒
	100% vesting upon Normal Retirement [describe criteria such as age (can be partial year), years of service with the Employer (must be whole years of service), or years of participation in the Plan (must be whole years of participation)]

65
		☒
	100% vesting upon Early Retirement [describe criteria such as age (must be whole years), years of service with the Employer (must be whole years of service), or years of participation in the Plan (must be whole years of participation)]

Early Retirement with consent of the Board expressly providing for such vesting
		☒
	100% vesting upon Death.

		☒
	100% vesting upon Disability [complete Item 29 – definition of “Disability”].

		☒
	100% vesting upon Change in Control of the Employer [complete Items 27 and 28 – definition of “Change in Control”]

		☐
	100% vesting upon occurrence of other event: [describe event]

	16.
	Service Before Plan’s Establishment Excluded. Years of service earned prior to establishment of the Plan shall be disregarded for purposes of determining vesting under the Plan:

		☐
	Yes (this may be elected only if this is the establishment of a new Plan).

		☒
	No.

- 9 -

	17.
	Forfeitures for Misconduct or Violation of Non-Compete. Participants terminating employment prior to becoming 100% vested will forfeit the forfeitable percentage of their Accounts as indicated in accordance with the vesting schedule selected in Items 12 and/or 13. Participants may also forfeit 100% of their Matching and Employer Contribution Accounts (if applicable) under the following circumstances: [select any that apply]:

		☐
	Misconduct (termination for Cause). [enter definition of Misconduct or Cause below]

                                                                                                          
		☐
	Engaging in competition with the Employer. [enter definition of engaging in competition below]

                                                                                                          
	18.
	Employer Stock as Deemed Investment Option. If Employer stock will be a deemed investment option, indicate below how shares are to be tracked: [select one]

		☐
	Partial and whole shares.

		☐
	Unitized fund.

	19.
	In-Service Distributions. If the Employer elects below, the Plan will allow distributions of Participant Deferral Contributions to be made to Participants while they are still employed (“In-Service Distributions”), if they elect a fixed distribution date during the regular election period. [Select one]

		☐
	No, In-Service Distributions will not be permitted.

		☒
	Yes, In-Service Distributions will be permitted. [select one ].

		☒
	For All Participant Deferral Contributions

		☐
	For Participant Compensation Deferral Contributions (other than Performance-Based Bonus) only.

		☐
	For Participant Performance-Based Bonus Deferral Contributions.

		☒
	For Employer Contributions. [if selected, employer contributions must be 100% vested, and additional fees may apply]. If Employer wishes to limit inservice withdrawals to specific types of Employer Contributions, enter details below:

                                                                                                
[Note – if “Yes” is elected above and the Plan will allow In-Service Distributions, please indicate if Participant will be permitted to make a “pushback” subsequent election to defer the original distribution date at least five years in accordance with Plan provisions (see subsection 9.1 of Plan document – note that election must be made 12 months prior to original distribution date and election will not take effect for 12 months) ☒ Yes ☐ No]

- 10 -

Please indicate the number of years a Participant must defer payment(s) until In-Service Distribution(s) may begin:
		☐
	2 Years after the Calendar Year for which the deferral is effective

		☒
	1 Years after the Calendar Year for which the deferral is effective

Please indicate if separate In-Service Distribution Dates are allowed for each Type of Participant Deferral selected in Item 7:
		☒
	No (single distribution date allowed per Plan Year)

		☐
	Yes (requires additional tracked sources per Plan Year)

	20.
	In-Service Distributions – Form and Timing of Payment. In-Service Distributions shall be made to Participants in the following form: [Select one]

		☐
	Lump Sums Only (allows a percentage up to 100% to be elected for distribution)

		☒
	Either 100% in Lump Sums or 100% in Installments.

[Note – please indicate if Participant will be permitted to make a subsequent election to change the installments in accordance with Plan provisions (see subsection 9.2 of Plan document) ☒ Yes ☐ No]
	21.
	Unforeseeable Emergency Distributions Dates. If the Employer elects below, the Plan will allow distributions to be made to Participants while they are still employed if they meet the criteria for an unforeseeable emergency financial hardship (“Unforeseeable Emergency Distributions”). Both Participant Deferral Contributions and Vested Employer Contributions can be distributed in the event of an eligible Unforeseeable Emergency Distribution event. [Select one]

		☐
	No, Unforeseeable Emergency Distributions will not be permitted.

		☒
	Yes, Unforeseeable Emergency Distributions will be permitted. [select one below].

		☐
	For active Participants only.

		☒
	For active Participants, terminated Participants and Beneficiaries.

- 11 -

	22.
	Form of Distributions (at Termination of Employment or Death). Distributions will be made to Participants upon Termination of Employment with the Employer or Death of the Participant as follows [select one]

		☐
	Lump sum only.

		☐
	Lump sum unless installments elected, but can only receive installments if Participant meets the following criteria [select all that apply – if item not selected below, then Participants in that category will receive lump sum only]:

		☐
	Retirement [describe criteria such as age (can be partial year), years of service with the Employer (must be whole years of service), or years of participation in the Plan (must be whole years of participation)]          

		☐
	Early Retirement [describe criteria such as age (must be whole years), years of service with the Employer (must be whole years of service), or years of participation in the Plan (must be whole years of participation)]            

		☐
	Termination (other than for Misconduct, Cause or Violation of Non-Compete)

		☒
	Lump sum unless installments elected, and Participant may receive installments regardless of reason for Termination of Employment.

[Note – if Installments are elected above, please complete Item 26. Also indicate if Participant will be permitted to make a subsequent election to change the number of installments in accordance with Plan provisions (see subsection 9.2 of Plan document) ☒ Yes ☐ No]
	23.
	Distribution Upon Disability. If the Employer selects below, the Plan will allow distributions to be made to Participants upon Disability but while they are still employed if they meet the criteria for Disability in Item 29 below. The form of distribution will be the same as for Termination of Employment, or as elected by the Participant.

		☐
	No, distribution upon Disability will not be permitted.

		☒
	Yes, distributions upon Disability will be permitted. [complete Item 29 – definition of “Disability”].

	24.
	Expiration of Participant’s Distribution Elections [select one]:

		☒
	Renewed Each Year: Participant’s Distribution Election must be selected each year during the open enrollment period for the following year’s contributions – if no new election is made, that year’s contributions default to payment in the form of a lump sum. In-Service Distribution Elections must be made by participants each year.

		☐
	Evergreen: Participant’s Distribution Election will be “evergreen” (i.e., will continue indefinitely for each year’s contributions until the Participant’s Termination Date unless changed by the Participant – so each year the Participant will be deemed to have the same distribution election in place as the prior year unless actively changed by the Participant at open enrollment, and the change will only be applicable to future contributions). In-Service Distribution Elections may not be treated as evergreen.

- 12 -

	25.
	Distributions Upon Change in Control: If Employer elects below, distributions will be made to Participants upon Change in Control of the Employer (without a termination of employment of the Participant), as follows [select one, and complete Items 27 and 28 below (definition of “Change in Control”)]

		☐
	No, Distributions upon Change in Control will not be permitted.

		☐
	Yes, Distributions upon Change in Control will be permitted, in a lump sum only.

		☒
	Yes, Participants may elect to stay in the plan or have their account distributed upon Change in Control. Distributions upon Change of Control may be made in a lump sum or instatements as elected by the Participant.

	26.
	Length of Installments (if Installment Distributions permitted in Item 20, 22 and/or Item 25 above) [indicate length below]:

Annual installments over no fewer than 2 [enter minimum number of years – must be at least 2] and no more than 10 years at Participant’s election [enter maximum number of years].
	27.
	“Change in Control” – Dates of Distribution. Distributions upon a Change in Control shall occur upon the date that [select all that apply – see Subsection 9.9 of the Plan document for more details]:

		☒
	A person or group acquires more than 50% of the total fair market value or voting power of the stock of the corporation (select definition of “corporation” in Item 28 below).

		☒
	A person or group acquires ownership of stock of the corporation with at least 30% of the total voting power of the corporation (select definition of “corporation” in Item 28 below).

		☒
	A person or group acquires assets from the corporation having a total fair market value of at least 40% of the value of all assets of the corporation immediately prior to such acquisition. (select definition of “corporation” in Item 28 below).

		☒
	A majority of the corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the board as constituted prior to the appointment or election (select definition of “corporation” in Item 28 below).

	28.
	“Change in Control” – Which Corporation the Change Relates. Distributions upon a Change in Control shall be made only if the Change in Control relates to the corporation selected below: [select all that apply]:

☒(a)The corporation for whom the Participant is performing services at the time of the Change In Control event.
☒(b)The corporation liable for payments from the Plan to the Participant.
☒(c)A corporation that is a majority shareholder of a corporation described in (a) or (b) above.
☒(d)Any corporation in the chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation described in (a) or (b) above.

- 13 -

	29.
	Definition of “Disability.” A Participant shall be considered “Disabled” if [select one]:

		☐
	by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of at least 12 months, the Participant is receiving income replacement benefits for at least 3 months under accident and health plans of the Employer;

		☐
	the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months;

		☐
	the Participant is deemed to be totally disabled by the Social Security Administration;

		☒
	the Participant is determined to be disabled in accordance with a disability insurance program offered by the Employer.

	30.
	Distributions to “Key Employees” – Investment. In order to comply with Internal Revenue Code Section 409A, distributions to “key employees” (see subsection 9.3 of the Plan Document for definition) of publicly traded companies made due to employment termination cannot be made within 6 months of the employment termination date. If distribution to a key employee must be delayed to comply with this 6-month rule, indicate below how Account balances of such a Participant will be invested during the period of delay [select one]:

		☐
	Valued as of most recent Valuation Date and held at the Employer without allocation of additional gains or losses after such Valuation Date until payment can be made.

		☒
	Remain invested as if termination date had not occurred, then valued as of most recent Valuation Date and distributed.

	31.
	QDRO Distributions. The Employer may elect whether distributions from a Participant’s Account shall be permitted upon receipt by the Plan Administrator of a Qualified Domestic Relations Order relating to a marital dissolution or separation that provides for payment of all or a portion of a Participant’s Accounts to an alternate payee (spouse, former spouse, children, etc.). [Indicate below whether QDRO distributions will be permitted]:

		☐
	No, QDRO Distributions will not be permitted.

		☒
	Yes, QDRO Distributions will be permitted.

	32.
	Additional Survivor Death Benefit from Life Insurance. In the event that life insurance is utilized as a funding vehicle for the Plan, the Employer may wish to provide additional Survivor Benefit from the following options: [select one]

		☒
	No additional Survivor Benefit offered, but rather Participant’s vested Account balance.

		☐
	Face value of life insurance policy of Participant, if any.

		☐
	Greater of (a) face value of life insurance policy of Participant, if any, or (b) Participant’s vested Account balance.

		☐
	Other: [enter amount or formula]                

- 14 -

	33.
	Payment of Plan Expenses. Plan expenses may be paid as follows: [select one]

		☐
	Directly by the Employer.

		☒
	Deducted from the Participant accounts and Plan’s trust or other custodial account (mutual fund plans only, if applicable).

	34.
	“De Minimis” Small Amount Cashouts. If selected by the Employer, Participant account balances that do not exceed a certain threshold amount will be automatically cashed out upon the Participant’s Termination of Employment or Death, as provided below [select one]

		☒
	Yes, amounts that do not exceed a threshold dollar amount will automatically be cashed out IRS 402(g) limit

		☐
	No, no “de minimis” small amounts will be cashed out.

By signing this Adoption Agreement, the Employer certifies that it has consulted with legal counsel regarding the effects of the Plan, as applicable, on all parties. The Employer further certifies that it has and will limit participation in the Plan to a select group of management or highly compensated Employees, Board Members or Other Service Providers, as determined by the Employer in consultation with legal counsel. The Employer further certifies that it is the Employer’s sole responsibility to ensure that each Participant with the right to direct deemed investments under the Plan that are based on securities issued by the Employer or a member of its controlled group (as defined in Code Section 414(b) and (c)) will receive a prospectus for any such deemed investment option based on such Employer securities.
The Employer is solely responsible for its compliance with applicable laws, including Federal and state securities and other applicable laws.
Only those elections that are completed shall be considered as provisions applicable to and forming a part of the Plan.
This Adoption Agreement may only be used in conjunction with the Plan document. All selections in the Adoption Agreement providing for customized or “other” plan provisions are subject to review for administrative feasibility, and may be subject to additional fees.
Terms used in this Adoption Agreement which are defined in the Plan document shall have the meaning given them therein.
The Employer hereby acknowledges that it is adopting this Nonqualified Supplemental Deferred Compensation Plan. Federal legislation or other changes in the law relating to nonqualified deferred compensation or other employee benefit plans may require that the Plan be amended.
*   *   *
​

- 15 -

The undersigned duly authorized owner, or officer of the Employer hereby executes the Plan on behalf of the Employer.
Dated this 18th day of October, 2022.
	​

	​

	​
	/s/ Jason E. Long

	​
	Employer

	​
	​
	​

	​
	By 
	Jason E. Long

	​
	Its
	Executive Vice President and Chief Financial Officer

​
​

- 16 -

ATTACHMENT A
TO THE ADOPTION AGREEMENT FOR
C&F FINANCIAL CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND EXECUTIVES
(As Restated Effective January 1, 2023)
Applicable to Employer Contributions for Employees
for Plan Years Beginning on or after January 1, 2023
Pursuant to authorization of the Board of Directors of C&F Financial Corporation, the following additions are made to the Adoption Agreement for the C&F Financial Corporation Deferred Compensation Plan for Directors and Executives (formerly known as the C&F Financial Corporation Non-Qualified Deferred Compensation Plan for Executives), as restated and amended effective January 1, 2023 (the “Restatement”) in the form of the VOYA (Pen-Cal) Nonqualified Supplemental Deferred Compensation Plan and related Adoption Agreement and as amended from time to time (the “Plan”):
1.  Continued Application of the C&F Financial Corporation Deferred Compensation Plan for Executives. All Employee Deferrals and Employer Contributions attributable to compensation earned before January 1, 2023 are governed by the terms of the C&F Financial Corporation Deferred Compensation Plan for Executives, including Attachments I and II to the Adoption Agreement, prior to the Restatement. In particular, the Board or its Compensation Committee may continue to exercise the right to provide more favorable vesting for Participants in the same manner as described in Attachment I with respect to Pre-2021 accounts and as described in Attachment II with respect to 2021-2022 accounts.
2.  Designation as a Participant Eligible for Employer Contributions. Eligibility of an Employee for participation in the Employer Contributions requires designation by the Board (or a committee thereof). Participants who may be entitled to a SERP Employer Non-Elective Contribution are sometimes referred to as SERP Participants for this purpose.
3.  SERP Employer Non-Elective Contributions. Unless otherwise provided by the Board, the Employer Non-Elective Contribution shall be made on behalf of a Participant who is a SERP Participant in such amount, if any, as determined in writing by the Board at or prior to the time the contribution is made. Such Employer Non-Elective Contribution is referred to as a SERP Employer Non-Elective Contribution and shall be allocated to the Employer Contribution SERP subaccount. Separate subdivisions of such account shall be maintained for the portion of the Contribution that is declared by the Board to be fully vested at the time such Contribution is made.
4.  Vesting in and Payment of Employer Contribution Account SERP Subaccount.
		(a)	Except as otherwise provided in item 4(b) of this Attachment A to the Adoption Agreement for the Plan, the Employer Contribution Account SERP subaccount of a SERP Participant shall be fully vested as described in Option 15 of the Adoption Agreement.

		(b)	If other vesting provisions are provided by the Board or the Compensation Committee of the Board with respect to the Employer Contribution Account SERP subaccount of any SERP Participant no later than the date the first contribution by the Employer to the Participant’s Employer Contribution Account SERP subaccount is made (or at any time thereafter if such other vesting provision makes vesting more favorable to the SERP Participant), vesting in the SERP Participant’s Employer Contribution Account SERP subaccount shall be determined as so provided by the Board or its Compensation Committee.

- 17 -

		(c)	Unless otherwise provided by the Board or the Compensation Committee of the Board with respect to the Employer Contribution Account SERP subaccount of any SERP Participant or unless otherwise elected by the Participant specific to his Employer Contribution Account SERP subaccount no later than the date the first contribution by the Employer to the Participant’s Employer Contribution Account SERP subaccount is made (or alternatively on a year by year basis before the beginning of the year in question), a SERP Participant’s Employer Contribution Account SERP subaccount shall be paid at the same time and in the same form as the Employee Deferral for a Plan Year; provided, however, if no Participant election has been made with respect to such Accounts for a Plan Year, the default time and form of payment shall be a lump sum payment, made six months and one day following Separation from Service for reasons other than death. Any such special payment provisions shall be in writing and shall provide for payment at a time and in a form permitted under the Plan.

IN WITNESS WHEREOF, C&F Financial Corporation, as the Plan Sponsor, has caused its name to be signed to Attachment A by its duly authorized officer as of the date noted below.
	​

	​

	​

	​

	​

	Dated: 
	October 18, 2022
	​
	C&F Financial Corporation, Plan Sponsor

	​
	​
	​
	​
	​

	​
	​
	​
	By: 
	/s/ Jason E. Long

	​
	​
	​
	Its
	Executive Vice President and Chief Financial Officer

​

- 18 -Document

			
	

SHARE PURCHASE AND SHAREHOLDERS AGREEMENT

among

Arteris HK Limited

Transchip Technology (Nanjing) Co., Ltd.

Arteris Semiconductor Technology (Nanjing) Co., Ltd.

SME Development (Shaoxing) Venture Fund, LLP

Jiaxing Luojia Chuanzhi Investment Partnership Enterprise (Limited Partnership)

Gongqing City Guinie Zhuyu No. 3 Investment Partnership (Limited Partnership)

Jiaxing Catalpa Huixin Investment Partnership Enterprise (Limited Partnership)

Gongqing City Guinie Zhuyu No. 5 venture capital partnership (limited partnership)

Huzhou Hangxin Rongxie Equity Investment Partnership (Limited partnership)

and

Ningbo Transchip Information Consulting Partnership (Limited Partnership)

Date: September 15, 2022

			
	

TABLE OF CONTENTS
			
	1

			
	

ARTICLE 1    DEFINITIONS AND INTERPRETATION RULES    2
1.1Definitions    2
1.2Rules of Interpretation    5
ARTICLE 2    SUBSCRIPTION AND TRANSFER OF REGISTERED CAPITAL    6
2.1Capital Contributions of Investor D, Investor E and Investor F    6
2.2Timing of Capital Contribution    6
2.3Registered Capital    6
ARTICLE 3    CAPITAL CONTRIBUTION OF INVESTING PARTIES    7
3.1Closing Conditions.    7
3.2Closing    7
3.3Rights of the Investing Parties    8
ARTICLE 4    SHAREHOLDERS’ MEETING    8
4.1Quorum    8
4.2Resolution of Shareholders’ Meeting    8
4.3Ordinary Resolutions    8
4.4Special Resolutions    9
4.5The Initial Meeting of the Shareholders’ Meeting    9
4.6Regular Meeting    9
4.7Interim Meeting    9
4.8Place and Method of Meeting    9
4.9Attending the Meeting    10
4.10Notice    10
4.11Meeting Minutes    10
4.12Written Resolution    10
ARTICLE 5    BOARD    10
5.1Composition of the Board    10
5.2Term of Office    10
5.3Chairman    11
5.4Board Meetings    11
5.5Quorum and Adoption of Resolutions    11
5.6Powers of the Board    12
5.7Protective Provisions    14
5.8Directors’ Remuneration and Indemnification    14
5.9Meeting Minutes of Board Meetings    14
ARTICLE 6    SUPERVISORS    15
6.1Appointment of Supervisors    15
6.2Powers of Supervisors    15
ARTICLE 7    OPERATION AND MANAGEMENT ORGANIZATION    15
7.1Management System    15
7.2Powers and Responsibilities of the General Manager    16
ARTICLE 8    CONFIDENTIALITY    17
8.1Confidentiality    17
8.2Exceptions    17
8.3Measures of Protection    18
8.4Breach    18
8.5Survival    18
			
	2

			
	

ARTICLE 9    FINANCE, AUDIT AND DISTRIBUTION OF PROFIT    18
9.1Financial and Accounting System    18
9.2Auditing    19
9.3Information and Inspection Rights    19
9.4Distribution of Profits    19
9.5Budgets and Business Plans    20
ARTICLE 10 REPRESENTATIONS AND WARRANTIES OF THE PARTIES    20
ARTICLE 11 ADDITIONAL COVENANTS    20
11.1Non-Competition    20
11.2Export Control    21
ARTICLE 12 TERM AND TERMINATION OF THE COMPANY    21
12.1Term of the Company    21
12.2Events of Termination    21
12.3Shareholders’ Meeting to Discuss Termination and Dissolution    21
12.4Dissolution due to Termination    22
ARTICLE 13 DISSOLUTION AND LIQUIDATION    22
13.1Liquidation Committee    22
13.2Principles of Liquidation    22
13.3Survival    22
ARTICLE 14 INDEMNIFICATION    22
14.1Indemnification for Breach    22
14.2Damages for Breach    23
ARTICLE 15 GOVERNING LAW AND DISPUTE RESOLUTION    23
15.1Applicable Law    23
15.2Dispute Resolution    23
15.3Arbitration    23
15.4Continued Performance    24
ARTICLE 16 MISCELLANEOUS PROVISIONS    24
16.1Effectiveness of this Agreement    24
16.2Entire Agreement    24
16.3Language    24
16.4Amendment    24
16.5Severability    24
16.6Parties in Interest    24
16.7Costs and Expenses    25
16.8Waiver    25
16.9No Agency    25
16.10Notices    25
16.11Publicity    28
			
	3

			
	

Schedule 1    Rights of the Investing Parties
			
	4

			
	

SHARE PURCHASE AND SHAREHOLDERS AGREEMENT PREAMBLE
THIS SHARE PURCHASE AND SHAREHOLDERS AGREEMENT, dated this 15th day of
September, 2022 (this “Agreement”), is made by and among:

(a)Transchip Technology (Nanjing) Co., Ltd. (传智驿芯科技(南京)有限公司), a limited liability company incorporated under the laws of the PRC (the “Company”);

(b)Arteris HK Limited, a company incorporated under the laws of Hong Kong (“AHK”);

(c)Arteris Semiconductor Technology (Nanjing) Co., Ltd. (安通思半导体技术(南京)有限公司), a limited liability company incorporated under the laws of the PRC (the “Original Shareholder” or “Arteris Nanjing”);

(d)SME Development (Shaoxing) Venture Fund, LLP 中小企业发展基金(绍兴)股权投资合伙企业(有限合伙),a limited partnership organized under the laws of the PRC (“Investor A” or “SME”);

(e)Jiaxing Luojia Chuangzhi Investment Partnership Enterprise (Limited Partnership) (嘉兴珞珈传智股权投资合伙企业(有限合伙)), a limited partnership organized under the laws of the PRC (“Investor B” or “Luojia”);

(f)Gongqing City Guinie Zhuyu No. 3 Investment Partnerhip (Limited Partnership)共青城圭臬珠玉三号投资合伙企业(有限合伙),a limited partnership organized under the laws of the PRC (“Investor C” or “Guinie”);

(g)Jiaxing Catalpa Huixin Investment Partnership Enterprise (Limited Partnership) 嘉兴梓禾惠芯股权投资合伙企业(有限合伙), a limited partnership organized under the laws of the PRC (“Investor D” or “Catalpa Capital”)

(h)Gongqing City Guinie Zhuyu No. 5 venture capital partnership (limited partnership) 共青城圭臬珠玉五号创业投资合伙企业(有限合伙), a limited partnership organized under the laws of the PRC ("Investor E” or “Guinie Zhuyu”)

(i)Huzhou Hangxin Rongxie Equity Investment Partnership (Limited partnership) 湖州航信荣协股权投资合伙企业(有限合伙) , a limited partnership organized under the laws of the PRC ("Investor F” or “Hangxin Rongxie”)

(Investor A, Investor B, Investor C, Investor D, Investor E and Investor F collectively “Investors” and each an “Investor”); and

(j)Ningbo Transchip Information Consulting Partnership (Limited Partnership) (宁波传智驿芯信息咨询合伙企业(有限合伙), a limited partnership organized under the laws of the PRC (“Management Co.”).

together the “Parties” and each a “Party”.

WHEREAS,

(a)Series A investments in the Company under this Agreement were made by Investor A, Investor B, Investor C, Management Co., and AHK which closed June 20, 2022 (“First
			
	1

			
	

Closing”). Investor D, Investor E and Investor F desire to subscribe for certain additional Series A capital contributions to the Company under the second closing described below (“Second Closing”) (references to “Closing” below refer to the Second Closing as applicable); and

(b)To protect the Investing Parties’ investment interests and to regulate the Shareholders’ rights and obligations in the Company, the Parties agree to enter into this Agreement.

NOW the Parties agree as follows:

ARTICLE 1 DEFINITIONS AND INTERPRETATION RULES

1.1Definitions

The terms used in this Agreement have the meanings set forth below:

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly, Controls, is Controlled by, or is under common Control with, such specified Person;

“Approved Sale” has the meaning set forth in Section 5.1 of Schedule 1; “Approved Sale Date” has the meaning set forth in Section 5.3 of Schedule 1;
“Articles of Association” means the articles of association of the Company, as amended or supplemented from time to time;

“Board” means the board of directors of the Company; “Breaching Party” has the meaning set forth in Section 14.1;
“Business” means the development, sale, distribution and promotion of products in China;

“Business Day” means any day that is not a Saturday, Sunday, public holiday or other day on which commercial banks are required or authorized to be closed in the PRC.

“Business License” means the business license of the Company issued by the Registration Authority;

“Chairman” has the meaning set forth in Section 5.3; “CFO” has the meaning set forth in Section 7.1(c); “Closing” has the meaning set forth in Section 3.2;
“Closing Conditions” has the meaning set forth in Section 3.1; “Closing Date” has the meaning set forth in Section 3.2; “Confidential Information” has the meaning set forth in Section 8.1;

			
	2

			
	

“Control” (including the terms “Controlled by” and “under common Control with”) means the direct or indirect possession of the decision-making authority over the management and policies of a Person, no matter through the ownership of voting securities, through contract or otherwise, including but not limited to, the direct or indirect ownership of securities with the right to elect a majority of the board or similar organ of authority that governing the affairs of such Person;

“Dilutive Equity” has the meaning set forth in Section 2.1 of Schedule 1; “Dilutive Issuance” has the meaning set forth in Section 2.1 of Schedule 1; “Directors” has the meaning set forth in Section 5.1;
“Disputes” has the meaning set forth in Section 15.2;

“Drag-Along Holder” has the meaning set forth in Section 5.1 of Schedule 1; “Drag-Along Notice” has the meaning set forth in Section 5.3 of Schedule 1; “Dragged Holders” has the meaning set forth in Section 5.1 of Schedule 1; “ESOP” has the meaning set forth in Section 2.3(e);
“Establishment Date” means the establishment date recorded on the first Business License;

“General Manager” has the meaning set forth in Section 7.1(a); “Indemnitees” has the meaning set forth in Section 14.1; “Indemnifying Party” has the meaning set forth in Section 14.1;
“Issuance Equity” has the meaning set forth in Section 4.1 of Schedule 1; “Issuance Notice” has the meaning set forth in Section 4.2 of Schedule 1;
“Investing Parties” means AHK and the Investors (excluding Management Co.), and “Investing Party” means any of them.

“Investing Party Purchase Price” means the per-unit purchase price for the registered capital subscribed pursuant to this Agreement for Investor D, Investor E and Investor F or the per-unit purchase price for the registered capital subscribed pursuant to SHARE PURCHASE AND SHAREHOLDERS AGREEMENT dated on Feb 21st,2022 for
Investor A, Investor B and Investor C at the First Closing (as appropriately adjusted for any dividend or split upon restructuring into a joint stock corporation, or any securities or equivalents issued upon the public offering of shares of the Company in the PRC or an offshore stock market), which shall be RMB 1.00 per unit of Registered Capital.

“Key Employees” means key employees identified before Closing, each of whose employment agreements are to be completed before Closing.

“Lead Investor” means Investor A.

“Licensed Items” has the meaning set forth in Section 10.2;

			
	3

			
	

“Liquidation Committee” has the meaning set forth in Section 13.1(a); “Liquidation Event” has the meaning set forth in Section 1.1 of Schedule 1; “Liquidation Preference” has the meaning set forth in Section 1.1 of Schedule 1;
“New Investor’s Interest Rate” has the meaning set forth in Section 1.2 of Schedule 1;

“Notice Period of Redemption” has the meaning set forth in Section 7.3 of Schedule 1;

“Over-Allotment Issuance Equity” has the meaning set forth in Section 4.4 of Schedule 1;

“Party” and “Parties” has the meaning set forth in the Preamble;

“Person” means any individual, partnership, social organization, enterprise, company, association, trust, unincorporated organization or other entity or institution;

“Potential Purchaser” has the meaning set forth in Section 5.1 of Schedule 1;

“PRC” or “China” means the People’s Republic of China, including the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan; solely for the purpose of this Agreement, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan;

“PRC Accounting System” means the PRC Generally Accepted Accounting Principles;

“PRC Laws” means any published and effective PRC laws, administrative regulations, department rules and provisions and related local regulations, rules and provisions;

“Preemptive Rights” has the meaning set forth in Section 4.1 of Schedule 1; “Preemptive Rights Holders” has the meaning set forth in Section 4.1 of Schedule 1; “Proposed Transferee” has the meaning set forth in Section 3.2 of Schedule 1; “Senior Management Personnel” has the meaning set forth in Section 7.1(d); “Settlement Document” has the meaning set forth in Section 6 of Schedule 1; “Shareholder” means a shareholder of the Company;
“Registered Capital” means the registered capital of the Company and any warrant, option, commitment or security convertible into, exchangeable or exercisable for the registered capital of the Company;

“Registration Authority” means the State Administration for Market Regulation of the PRC or its authorized local counterpart in charge of the registration of the Company;

“Remaining Transfer Equity” has the meaning set forth in Section 3.2 of Schedule 1; “Renminbi” or “RMB” means the lawful currency of the PRC;
“Second ROFR Holder” has the meaning set forth in Section 3.2 of Schedule 1;

			
	4

			
	

“Second Transfer Notice” has the meaning set forth in Section 3.2 of Schedule 1;

“Shareholders’ Meeting” means the supreme decision-making body of the Company, consisting of all of the Shareholders.

“Supervisors” has the meaning set forth in Section 6.1;

“Tag Along Equity” has the meaning set forth in Section 3.3 of Schedule 1; “Tag Along Right” has the meaning set forth in Section 3.3 of Schedule 1; “Technology License Agreement” has the meaning set forth in Section 10.2; “Term” has the meaning set forth in Section 12.1;
“Transaction Documents” means (a) this Agreement, and (b) the Articles of Association of the Company.

“Transfer Equity” has the meaning set forth in Section 3.2 of Schedule 1; “Transfer Notice” has the meaning set forth in Section 3.2 of Schedule 1; “Transferring Party” has the meaning set forth in Section 3.2 of Schedule 1; “U.S.” means the United States of America;
“U.S. Dollars” or “US$” means the lawful currency of the U.S..

1.1Rules of Interpretation

(a)Unless otherwise provided, all the terms, annexes and appendices referred to in this Agreement refer to the terms, annexes and appendices of this Agreement. “Of this Agreement”, “in this Agreement”, “under this Agreement” and other wordings with similar meaning used in this Agreement refer to this Agreement as a whole rather than any article or section of this Agreement.

(b)Reference to any document (including this Agreement) includes the amendment, supplement or replacement of that document from time to time.

(c)Reference to any Party includes any successor of its proprietorship or any permitted assigns.

(d)Reference to the singular includes the plural and vice versa; reference to any gender includes all the other genders.

(e)General words shall not be given a restrictive meaning by any particular examples introduced by “including”, “such as” or any similar expressions.

(f)The insertion of headings in this Agreement is for convenience of reference only and shall not define or limit the articles and sections of this Agreement.

			
	5

			
	

ARTICLE 2 SUBSCRIPTION AND TRANSFER OF REGISTERED CAPITAL

2.1Capital Contributions of Investor D, Investor E and Investor F

The Registered Capital of the Company shall be increased from RMB 196,500,000 at the First Closing to RMB 226,500,000 at the Second Closing (“Capital Increase”). The Investor D, Investor E and Investor F agree to subscribe for and contribute the amounts of Registered Capital of the Company (each, a “Capital Contribution Amount”) as follows (the “Capital Contributions”):

(a)Catalpa Capital agrees to subscribe for and contribute RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing;

(b)Guinie Zhuyu agrees to subscribe for and contribute RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing; and

(c)Hangxin Rongxie agrees to subscribe for and contribute RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing.

2.1Timing of Capital Contribution

Subject to the provisions of Section 3.2 below, the Parties shall contribute their respective subscribed capital contributions to the Company as provided below.

2.2Registered Capital
The Registered Capital of the Company is consisted of as follows immediately after Closing (for the avoidance of doubt, contributions (a), (b), (c), (d) and (h) below were made at the First Closing and their updated percentage ownership of Registered Capital is effective after the Closing):

(d)AHK contributes RMB 79,230,000 representing 34.9802% of the Registered Capital of the Company immediately after the Closing, in which (I) RMB 77,330,000 is contributed in-kind by way of a technology license for Licensed Items under the Technology License Agreement at appraised value, representing 34.1413% of the Registered Capital of the Company immediately after the Closing
(II) RMB 1,700,000 in cash is contributed to the Company, representing 0.7506% of the Registered Capital of the Company immediately after the Closing, and (III) RMB 200,000 in cash has been paid to Arteris Nanjing for the Initial Registered Capital of the Company that transferred earlier from Arteris Nanjing to AHK and representing 0.0883% of the Registered Capital of the Company immediately after Closing;

(e)SME contributes RMB 30,000,000 in cash, representing 13.2450% of the Registered Capital of the Company immediately after Closing;

(f)Luojia contributes RMB 20,000,000 in cash, representing 8.8300% of the Registered Capital of the Company immediately after Closing.

(g)Guinie contributes RMB 26,500,000 in cash, representing 11.6998% of the

			
	6

			
	

Registered Capital of the Company immediately after Closing;

(h)Catalpa Capital contributes RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing;

(i)Guinie Zhuyu contributes RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing;

(j)Hangxin Rongxie contributes RMB 10,000,000 in cash, representing 4.4150% of the Registered Capital of the Company immediately after Closing; and

(k)Management Co contributes RMB 40,770,000 which representing 18.0000% of the Registered Capital of the Company, which shall be reserved for employees under an Employee Shares Option Plan (the “ESOP”) or another vehicle used for employee stock options.

ARTICLE 3 CAPITAL CONTRIBUTION OF INVESTING PARTIES

3.4Closing Conditions.

The obligation of Investor D, Investor E and Investor F to contribute their respective capital contributions to the Company as contemplated in Section 2.1 above will be subject to the satisfaction (or waiver in writing by the applicable Investing Party) of the following Second Closing conditions (“Closing Conditions”):

(l)Each of the Transaction Documents shall have been duly executed by the applicable parties thereto;
(m)The investment committee of Investor D, Investor E and Investor F if applicable shall have issued final approval for the Investor’s investment in the Company contemplated in this Agreement;
(n)All approvals and consents required to be obtained in connection with the Transaction from any third party, governmental authority, and the decision- making authority of the Company shall have been obtained;
(o)The board of directors of AHK and Arteris, Inc., which is AHK’s parent company, shall have approved the transactions contemplated hereunder.

3.1Closing

The closing of the Second Closing’s Capital Contributions (“Closing”) shall occur no later than on the tenth (10th) Business Day (or another day as agreed by the Parties in writing; the day of the Closing agreed by the Parties is the “Closing Date”) following the fulfilment of all Closing Conditions (unless otherwise waived in writing by the applicable Investor D, Investor E and Investor F). For the avoidance of doubt, each Party shall complete its respective Closing agreed under this agreement independently and separately. If any Party fails to conduct the corresponding Closing, it shall not affect other Parties to complete their respective Closings under this agreement.

(p)On or before the Closing Date, Investor D, Investor E and Investor F shall pay their Capital Contribution Amount by wire transfer of immediately available funds to the bank account as notified by the Company to the Investors in writing.

(q)On the Closing Date and after the Company’s receipt of respective contributions, the Company shall deliver to each Investing Party the Company’s updated register of shareholders and an investment certificate issued by the Company, reflecting such

			
	7

			
	

Investing Party having contributed its Capital Contribution Amount and having become a shareholder holding the Registered Capital of the Company in the amount of the applicable Capital Contribution Amount.

(r)Promptly following the Closing Date, the Company shall, and the Shareholders shall cause the Company to, use its reasonable best efforts apply to the Registration Authority and any other applicable Chinese regulatory entities for filings and registrations with respect to the Capital Increase and the updated Articles of Association (as required by the PRC Laws).

3.5Rights of the Investing Parties

The provisions of Schedule 1 will become effective, and all the Investing Parties will enjoy the rights granted to them under Schedule 1, only upon completion of the Closing and on and after the Closing Date.

ARTICLE 4 SHAREHOLDERS’ MEETING

4.13Quorum

Shareholders present in person or by proxy, which shall hold at least two thirds (2/3) of the voting rights of all Shareholders, shall constitute quorum for purpose of a meeting of the Shareholders’ Meeting.

4.14Resolution of Shareholders’ Meeting

The Shareholders shall exercise their voting rights at a meeting of the Shareholders’ Meeting in proportion to their respective contributions to the Registered Capital. Save for the matters to be resolved by special resolutions in Section 4.4, all matters to be decided by the Shareholders shall be resolved by ordinary resolution. To adopt an ordinary resolution, a simple majority of the voting rights of all Shareholders in attendance or by proxy, must be cast in favor of the resolution. To adopt a special resolution, two thirds (2/3) of the voting rights of all Shareholders must be cast in favor of the resolution.

4.15Ordinary Resolutions

The following matters shall be resolved by ordinary resolutions at a meeting of the Shareholders’ Meeting:

(s)determining the Company’s operational guidelines and investment plans;

(t)electing and changing the Directors and the Supervisors and determining matters relating to their salaries and compensation;

(u)approving the reports of the Board of Directors;

(v)approving the reports of the Supervisors;

(w)approving annual budgets and business plans of the Company, and any revisions thereof;

(x)approving profit distribution plans and loss recovery plans of the Company; and

			
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(y)other matters to be decided the Shareholders (other than (a) through (f) above and the matters set forth in Section 4.4) as specified in this Agreement and the Articles of Association.

4.1Special Resolutions

The following matters shall be resolved by special resolutions at a meeting of the Shareholders’ Meeting:

(z)approving any amendment to the Articles of Association;

(aa)approving any increase or reduction of the Company’s Registered Capital;

(ab)approving termination and dissolution of the Company;

(ac)approving any merger or division, or change of corporate form of the Company; and

(ad)approving the establishment, adoption of, any change or amendment to the ESOP and the grant of options or incentives under the ESOP.

4.16The Initial Meeting of the Shareholders’ Meeting

The initial meeting of the Shareholders’ Meeting after the Closing shall be convened and presided over by the person designated by Management Co. subject to China’s Company Law. The initial meeting of the Shareholders’ Meeting after the Closing shall discuss and adopt resolutions with respect to the following matters:

(ae)election of the Board of Directors as per the provisions of this Agreement; and

(af)election of the Supervisors as per the provisions of this Agreement.

4.2Regular Meeting

A regular meeting of the Shareholders’ Meeting shall be held once (1) a year, and shall be convened by the Board and presided over by the Chairman. Where the Chairman is unable to or does not perform his or her function, the meeting shall be presided over by a Director designated in writing by the Chairman and/or preapproved by a majority of the Board.

4.3Interim Meeting

An interim meeting of the Shareholders’ Meeting shall only be held if proposed by the Shareholders representing ten percent (10%) or more of the voting rights, or by a Supervisor. The interim meeting shall be presided over by the Chairman or a Director designated in writing by the Chairman and preapproved by a majority of the Board.

4.4Place and Method of Meeting

Each meeting of the Shareholders’ Meeting generally shall be held at the registered address of the Company or such other address in the PRC or abroad as is designated by the Chairman. A meeting of the Shareholders’ Meeting may be held by any method which allows all participants to hear and be heard simultaneously throughout the meeting, such as telephone, video-conferencing or other electronic communicating methods.

			
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Participation in the meeting through such method by a Shareholder shall be deemed presence in person by such Shareholder at the meeting.

4.5Attending the Meeting

Each Shareholder shall attend the Shareholders’ Meeting in person or by video or audio conference, or entrust other person(s) by proxy in writing to attend the meeting and exercise rights specified in the entrustment letter.

4.6Notice

Each Shareholder shall be given written notice by the Company at least fifteen (15) days before a meeting of the Shareholders’ Meeting is held.

4.7Meeting Minutes

The minutes of a Shareholders’ Meeting shall be taken by a Person designated by the Chairman. A transcript of such minutes shall be prepared by such designated Person in the Chinese and English languages and shall be delivered to each Shareholder as soon as reasonably practicable following such meeting of the Shareholders’ Meeting. The Shareholders shall sign or seal all resolutions duly adopted by the Shareholders’ Meeting and the minutes pursuant to this Agreement as soon as reasonably practical following the delivery of such resolutions or minutes to the Shareholders.

4.8Written Resolution

In lieu of a meeting of the Shareholders’ Meeting, a written resolution may be adopted by the Shareholders if such resolution is sent to all Shareholders and is affirmatively signed and adopted by all Shareholders. The written resolution shall be made in writing with the signatures or seals of all Shareholders. Such resolution shall be filed with the minutes of Shareholders’ Meetings and shall have the same force and effect as resolutions adopted by Shareholders present in person or by proxy at a duly convened meeting of the Shareholders’ Meeting.

ARTICLE 5 BOARD

5.10Composition of the Board

The Board shall consist of five (5) directors (“Directors”), allocated as follows.

(ag)AHK shall be entitled to nominate and appoint two (2) Directors.
(ah)Investor A shall be entitled to nominate and appoint one (1) Director.
(ai)Investor B shall be entitled to nominate and appoint one (1) Director.
(aj)The remaining one (1) Director shall be appointed by Management Co.

All persons appointed as Directors shall meet the qualification requirements for company directors as specified in PRC Laws. All Parties undertake to vote in favor of the candidates for Directors and Chairman as nominated by each Party pursuant to this provision to be elected on Shareholders’ Meeting.

5.1Term of Office

The term of each Director shall be three (3) years, and each Director shall be nominated by the Party to this Agreement that originally nominated such Director, on or prior to the

			
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conclusion of such Director’s then-current term. If a seat on the Board is vacated by the retirement, removal, resignation, illness, disability or death of a Director, the Party that originally nominated such Director shall be entitled to nominate a successor for election at the next relevant meeting of the Shareholders’ Meeting. The term of such successor Director shall end upon expiry of the term of the original Director. A Director may serve consecutive terms if nominated again by the Party who originally nominated that person and elected by the relevant meeting of the Shareholders’ Meeting. Any Director may resign at any time upon written notice to the Company and the Party who originally nominated that Director.

5.2Chairman

(ak)The Chairman is the legal representative of the Company. The Chairman shall convene and preside over Board meetings, and exercise his or her powers within the limits given by the Board in accordance with this Agreement and the Articles of Association.

(al)When the Chairman is unable to perform his or her duties (including convening and presiding over Board meetings) for any reason, he or she shall appoint another Director to act on his or her behalf in accordance with China’s Company Law. If the Chairman further fails to appoint such Director, any Director elected by no less than half of the remaining Directors except the Chairman shall act on behalf of the Chairman until a new Chairman is elected by the Board.

5.11Board Meetings

(am)In each calendar year, the Board shall convene at least one (1) regular meeting to examine the operations and approve major matters of the Company. Upon written request of two (2) or more of the Directors, the Chairman shall convene an interim Board meeting to discuss relevant matters within ten (10) days after his or her receipt of such request. Board meetings may be attended by the Directors in person, or through television conference, video conference, tele- conference or other similar communication methods, so long as all attending Directors are able to hear each other and to communicate, and all such Directors are deemed to attend the Board meeting by presenting in this meeting in person.

(an)All Board meetings shall be convened and presided over by the Chairman. The Chairman shall give written notice of any Board meeting to each of the Directors at least ten (10) days prior to the meeting, which notice shall specify the time, place, agenda of the meeting and other documents related to such Board meeting (if any). Any Board meeting held without giving proper and timely notice to each of the Directors shall be invalid unless each of the Directors who did not receive proper and timely notice delivers a written waiver to the Chairman either before or after the meeting of the Board or attends the meeting. Board meetings shall be held at the registered address of the Company or such other place inside or outside the PRC as may be determined by the Chairman.

(ao)Other details regarding Board meetings may be provided in the Articles of Association.

5.3Quorum and Adoption of Resolutions
			
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(ap)The quorum for a duly convened Board meeting shall include at least two-thirds (2/3) of the Directors present in person (including attending via television conference or tele-conference) or by proxy. In the absence of a quorum, any resolutions passed at a Board meeting shall be invalid and have no effect, subject to the following sentences if and when applicable. If the quorum is not present at any duly convened Board meeting, the Chairman (or another Director in accordance with Section 5.3(b)), shall send a notice to all Directors within two (2) Business Days to convene a second Board meeting (with the same agenda to be held at the same place as the first meeting) on or about the fifth (5th) Business Day after the first meeting, in accordance with the procedures provided in this Agreement and the Articles of Association, and so on until a quorum is present.

(aq)If a Director is unable to attend a Board meeting for any reason, he or she may, so long as providing notice to the Chairman or Secretary prior to the Board meeting, appoint a proxy in writing to attend the meeting, who may be but not necessarily to be another Director of the Board. Any proxy so appointed shall have the same rights as the Director who appointed him or her, and one proxy may represent more than one Director. A proxy shall have one vote for each Director he or she represents and an additional vote if he or she is also a Director. The Chairman shall have the same right of one vote as accorded to each of the other Directors.

(ar)Resolutions may be passed without a Board meeting if in writing and executed by the required Directors pursuant to Section 5.6 below, provided that the proposed resolution is delivered to each of the Directors. For such purposes, Directors may execute separate counterparts of identical written resolutions, which, taken together, shall constitute one valid set of written resolutions, and facsimile or email signatures of the Directors shall be valid and binding for such purposes. Such written resolutions shall have the same force and effect as resolutions adopted at a duly convened Board meeting.

5.12Powers of the Board

Except as reserved to the Shareholders’ Meeting, the Board shall have the power to manage and to direct the Senior Management Personnel and employees of the Company. The Board shall have the right to delegate authority to such Senior Management Personnel as the Board shall deem appropriate except for such authority that cannot be delegated according to the applicable laws. The Board shall decide on the following matters:

(as)provision of security or guarantee to a third party by the Company;

(at)appointment or dismissal and remuneration of the Senior Management Personnel;

(au)establishment or termination of subsidiaries, branches or other branch offices, or investment by the Company in any other entity or acquisition or disposal of any equity interest in any other entity;

(av)borrowing of any amounts involving value or amounts of more than RMB 1,000,000 in a single transaction or a series of related transactions (for the purpose
			
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of this Section 5.6, “a series of related transactions” shall mean a series of transactions (i) entered into with the same counterparty or its Affiliates, and (ii) regarding the same or related subject matter within a period of twelve (12) consecutive months);

(a)provision of any loans to organizations or individuals other than the Company;

(b)decisions on sales, transfers or other dispositions of any fixed assets and/or Company IP that is material to the business of the Company important business operated by the Company, the amount of which is or would exceed RMB 1,000,000 in a single transaction or a series of related transactions;

(c)selection and appointment of external auditor of the Company, subject to Article 9 below;

(d)any contract or other transaction to be entered into between the Company and any Party or its Affiliates involving value of RMB 5,000,000 or more in a single transaction or a series of related transactions;

(e)formulating the Company’s proposed annual budgets and business plans, for submission to the Shareholders’ Meeting for final approval;

(f)formulating the Company’s profit distribution plans and plans for making up losses, for submission to the Shareholders’ Meeting for final approval;

(g)formulating plans for the merger, division, change of corporate form or dissolution of the Company, for submission to the Shareholders’ Meeting for final approval;

(h)important rules and regulations of the Company, including without limitation financial system, investment management system, human resources and remuneration management system and market development system;

(i)matters relating to executive compensation and administration of the ESOP (including any grants and awards associated therewith); and

(j)other matters the Board has the right to determine in accordance with the applicable PRC Laws.

Unless otherwise provided in this Agreement, a decision on any matters specified in this Section 5.6 shall require the approval of affirmative votes of at least a majority of the Directors (including at least one (1) Director nominated by the Lead Investor) present in person or by proxy at a duly convened Board meeting or by an affirmative written

			
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resolution signed by at least a majority of the Directors (including at least one (1) Director nominated by the Lead Investor) in accordance with Section 5.5 above.

5.1Protective Provisions

Without limiting any other provisions in this Agreement, the Articles of Association and PRC Laws, the Company or its subsidiaries shall not, without the prior written consent or resolution from at least two-thirds (2/3) of the members of the Board, take or do or agree to take or do any of the following actions or transactions:

(aw)Change in the principal business activities of the Company;
(ax)Making or changing annual business plan and annual budget plan;
(ay)Adoption or amendment of the Articles of Association, by-laws or any similar governing documents;
(az)Any change in accounting principles or policies materially or change auditors;
(ba)Modification of the number of board of directors;
(bb)Alternation or change in the rights, preferences or privileges of the Investing Parties, or provide other investors with any rights favorable than the Investing Parties;
(bc)Transactions with any related or affiliated party;
(bd)Making any guarantee for third parties;
(be)Any acquisition of part or all of the Company;
(bf)Any corporate or product acquisition or merger activities;
(bg)Any Company corporate reorganization, including divestiture or consolidation activities or resolutions;
(bh)Any initial public offering of the Company;
(bi)Any dividends or redemptions issued by the Company;
(bj)Any new financing activity by the Company; and
(bk)Any new stock issuance activity by the Company.

5.13Directors’ Remuneration and Indemnification

(bl)The Directors are not entitled to receive any remuneration from the Company for their position as Directors of the Company, provided that reasonable costs incurred by Directors or their proxies in connection with attending Board meetings shall be reimbursed by the Company in Renminbi or U.S. Dollars based on vouchers permissible under the PRC Accounting System.

(bm)Directors shall be indemnified by the Company from personal liabilities for acts performed in a normal manner within their respective capacities as such. After Closing, the Company shall enter into a standard indemnification agreement with the Directors, pursuant to which the Company will indemnify them, to the fullest extent possible under applicable PRC Laws, from and against any claim or charge brought against them, except for claims or charges resulting from acts or omissions of intent or gross negligence, fraud or serious dereliction of duties by the Director.

5.4Meeting Minutes of Board Meetings

The Board shall maintain complete and correct records of its meetings, including copies of all meeting notices to convene meetings. All Board meeting minutes and adopted resolutions shall be recorded by the secretary and/or assistant secretary appointed by the Board for a meeting designated by the Board and shall be circulated to all Directors within ten (10) days after the conclusion of each meeting. All Board resolutions shall be
			
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signed by all voting Directors, and Board meeting minutes shall be signed and approved by the Chairman and then filed by the secretary and kept in the Company Board meeting minutes books. The appointment and replacement of Directors shall be recorded in the Board meeting minutes books.

ARTICLE 6 SUPERVISORS

6.3Appointment of Supervisors

The Company shall have two (2) supervisors (“Supervisors”). Each of Management Co. and Investor C is entitled to nominate one (1) Supervisor for the Company. Both Parties undertake to vote in favor of the candidates for Supervisors as nominated by each Party pursuant to this provision to be elected on Shareholders’ Meeting. The Directors and Senior Management Personnel of the Company shall not act as the Supervisors of the Company. Each Supervisor shall be appointed for a term of three (3) years and may serve consecutive terms if reappointed by the Party that originally appointed him or her. The Supervisors are not entitled to receive any remuneration from the Company for their position as Supervisors of the Company. Reasonable costs incurred by Supervisors or their proxies in connection with attending Board meetings shall be reimbursed by the Company in Renminbi or U.S. Dollars based on vouchers permissible under the PRC Accounting System.

6.4Powers of Supervisors

A Supervisor shall exercise the following powers:

(bn)examine the financial status of the Company;

(bo)supervise Directors’ and Senior Management Personnel’s behaviors to carry out his/her duties for the Company, and advise to dismiss any Director or Senior Management Personnel who violates any laws, the Articles of Association or any Board resolution;

(bp)when the behaviors of Directors and Senior Management Personnel damage the interest of the Company, request the Director and Senior Management Personnel to rectify such behavior;

(bq)make proposals in furtherance of Supervisor powers at or in connection with a Board meeting; and

(br)bring lawsuits against the Directors and Senior Management Personnel pursuant to Article 151 of the Company Law of the People’s Republic of China, as amended.

The Supervisors may attend Board meetings as observers.

ARTICLE 7 OPERATION AND MANAGEMENT ORGANIZATION

7.3Management System

(bs)The Company shall have one (1) general manager (“General Manager”), who shall be appointed by the Board. The day-to-day management and operation of the Company shall be carried out by the General Manager in accordance with the

			
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policies adopted by the Board from time to time. The General Manager will be the CEO of the Company. The General Manager shall be directly responsible to the Board.

(bt)The term of office of the General Manager shall be three (3) years and he/she can serve consecutive terms upon re-appointment. The General Manager may be dismissed and replaced by the Board upon thirty (30) days’ notice.

(bu)The Company shall have one (1) chief financial officer (“CFO”) who shall be in charge of matters of finance, accounting, financial reporting to the Board and shareholders, internal control and tax. The CFO will be nominated by AHK, and shall be approved and appointed by the Board.

(bv)The General Manager, CFO and any other personnel of the Company who are required to be senior management personnel of the Company under the PRC Laws, regulations, rules or as per the requirements of the regulatory authorities or departments (“Senior Management Personnel”) shall be appointed by the Board based on market-oriented principles.

7.1Powers and Responsibilities of the General Manager

The powers and responsibilities of the General Manager shall consist of the following:

(bw)implementation of the resolutions adopted by the Board from time to time;

(bx)reporting to the Board on the operation of, and matters of major importance to, the Company;

(by)preparation and submission to the Board of operational reports concerning the business, marketing, capital expenditure, personnel and other operational matters of the Company;

(bz)within the powers delegated by the Board, negotiation, execution, amendment and implementation of business contracts and other contracts with third persons;

(ca)formulation, amendment and submission to the Board of the rules and regulations required for the operation of the Company, including but not limited to internal employees management rules and regulations, confidentiality system, bonuses and welfare or benefit plans of the Company, which shall be implemented upon approval by the Board;

(cb)suggestion to Board of the nomination and remuneration of the Senior Management Personnel (except for the General Manager), and determination of the employment, appointment and dismissal of other employees of the Company, and determination of the salaries, rewards, promotion and sanctions for employees in accordance with the Company’s employment policies;

(cc)preparation and submission to the Board of proposals for an organizational structure suitable for the Company’s operations, the establishment of various departments and their responsibilities and functions, which shall be implemented upon approval by the Board;

(cd)the daily management and direction of all the Company’s employees, including without limitation those engaged in the activities of marketing, sales and services;

			
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and

(ce)all other responsibilities entrusted to him or her by the Board from time to time or necessary for the normal operation of the Company.

ARTICLE 8    CONFIDENTIALITY

8.6Confidentiality

Each Party shall maintain the secrecy and confidentiality of any information of the following (“Confidential Information”):

(cf)the business or asset of the Company, the other Parties or its Affiliates;

(cg)the existence and content of this Agreement; and

(ch)all information provided by the other Party pursuant to this Agreement.

Each of the Parties and the Company receiving Confidential Information shall:

(a)limit the access to the Confidential Information to only such directors, senior management personnel and employees as are necessary for the implementation of this Agreement;

(b)not disclose, directly or indirectly, any Confidential Information to any third Person; and

(c)not use any Confidential Information for any purpose other than for the implementation of this Agreement or any ancillary contracts or agreements hereto.

Except for situations set forth in Section 8.2, none of the Parties may use or disclose any Confidential Information to any third party for its own business purpose or other purposes without the other Party’s prior written consent.

8.1Exceptions

The confidentiality obligations under Section 8.1 above shall not apply to:

(ci)confidential communications to the Parties’ respective Affiliates, directors, senior management personnel, employees, agents, professional advisors or financing party that are under an equivalent confidentiality obligation necessary for the implementation of this Agreement of a Party;

(cj)disclosure required to be made by applicable law; provided, however, that the Party subject to such requirement shall promptly notify the Party who disclosed the Confidential Information of such requirement to the extent of practically permissible and gives it reasonable opportunity to oppose such disclosure;

(ck)information which has become public knowledge through no fault of any Party or the Company; and

(cl)any information which was disclosed to the receiving party in good faith by a third Person who is not subject to any confidentiality obligation.

			
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8.7Measures of Protection

(cm)Each of the Parties and the Company shall advise its directors, senior management personnel, employees, agents, professional advisors or financing party having access to any Confidential Information of the existence and the requirements of Section 8.1 and shall formulate rules and regulations to cause its directors, senior management personnel, employees, agents, professional advisors or financing party and the directors, senior management personnel, employees, agents, professional advisors or financing party of its Affiliates to comply with the confidentiality obligations set forth in Section 8.1. Each of the Parties and the Company shall sign a confidentiality agreement with each of its directors, senior management personnel, employees, agents, professional advisors or financing party who may have access to any Confidential Information (confidentiality clauses in executed labor contracts, agency contracts, subcontracts or any other contracts or agreements with such personnel, which cover the Confidential Information, shall be considered as having executed such confidentiality agreement).

(cn)In addition, without prejudice to the generality of the provisions of Section 8.1 above, each of the appointees or nominees to the Company from each Party (including without limitation the Chairman and Directors) shall not use or disclose any Confidential Information which may become known to him or her in his or her involvement in the investments or investment decisions or business activities relating to the Party which appointed or recommended him or her or any of its Affiliates.

8.2Breach

If, without the prior written consent of the Party providing the Confidential Information or the Company, any Party discloses or permits or allows to be disclosed any Confidential Information to any unauthorized third Person, such Party shall be in breach of this Agreement and shall indemnify and hold the other Party and/or the Company thus affected harmless in accordance with applicable law and this Agreement.

8.3Survival

The provisions and obligations under this Article 8 shall survive within two (2) years of the expiry or termination of this Agreement, and shall continue to be binding on the Parties, the Company and their respective permitted assigns and successors.

ARTICLE 9 FINANCE, AUDIT AND DISTRIBUTION OF PROFIT

9.6Financial and Accounting System

(co)The Company shall establish its financial and accounting systems in accordance with the PRC Accounting System and other applicable PRC Laws, which shall be submitted to the Board for approval.

(cp)The Company shall adopt the accrual basis and debit and credit method for bookkeeping and shall separately prepare complete and accurate monthly, quarterly and annual financial statements in accordance with the PRC Accounting System.

			
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(cq)The Company shall adopt the Gregorian calendar year as its fiscal year, commencing on January 1 and ending on December 31 of each year. The first fiscal year of the Company shall begin on the Establishment Date and end on December 31 of the same year.

(cr)Renminbi shall be the Company’s bookkeeping currency. For cash, bank deposits, funds, credits and debts, gains and expenses that are not in Renminbi, the Company shall also enter the currencies actually paid and received in its bookkeeping.

(cs)The depreciation period of the fixed assets of the Company shall be decided by the Board in accordance with the then applicable PRC Laws.

9.1Auditing

The Company shall hire a Big Four accounting firm (Deloitte, Ernst & Young, KPMG or PwC) with securities business qualifications in the PRC as its external auditor for annual auditing. The external auditor shall audit the Company’s accounts and issue an audit report in accordance with the PRC Accounting System, which shall be submitted by the Company to the Board for approval. the Company shall provide the external auditor with all documents and books necessary for the external auditing.

9.2Information and Inspection Rights

(ct)For as long as the Investing Parties continue to hold the shares of the Company, the Company shall deliver to each Investing Party (i) unaudited quarterly consolidated financial statements and business reports, which shall be delivered to the Investors no later than 30 days after the end of each quarter, (ii) key Company metrics (to be determined based on the Investing Parties’ and the auditor’s feedback) by the end of the calendar month preceding the end of each quarter, (iii) unaudited annual financial statements and business reports, which shall be within 30 days after the end of each financial year, (iv) audited annual consolidated financial statements prepared by a recognized accounting firm within 60 days after each financial year ends, (v) an annual operating plan and budget which shall be approved by the Board/Shareholder Meeting (within their respective authority limits) and delivered to the Investors no later than 45 days prior to the beginning of each fiscal year, and (vi) other information relating to the Company as reasonably requested by the Investing Parties.

(cu)Without affecting the Company’s normal operations, the Investing Parties shall be entitled to standard inspection rights to the facilities, assets, book and record of the Company and its subsidiaries. The Investing Parties shall be allowed to discuss the business, operations and other aspects of the Company and its subsidiaries with the managers, employees, accountants, legal counsel and the investment bankers.

9.7Distribution of Profits

(cv)The distribution of the Company’s profits shall depend upon the available surplus of the Company’s profits and liquidity, as resulting from the Company’s financial statements approved by the Shareholders’ Meeting for each fiscal year. Any distribution of the Company’s profits shall be in accordance with the profit distribution plan approved by the Shareholders’ Meeting and in proportion to the

			
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shareholding of each Party. For the sake of clarity, Investors are not obligated to pay dividends that they had received to other Shareholders.

9.3Budgets and Business Plans

The Company shall operate in accordance with the annual budgets and business plans approved by the Shareholders’ Meeting.

ARTICLE 10 REPRESENTATIONS AND WARRANTIES OF THE PARTIES

10.1Each Party hereby represents and warrants to the other Parties as follows:

(cw)It is a legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

(cx)It has full legal right, power and authority to execute, deliver and perform this Agreement and all of the contracts and documents referred to in this Agreement to which it is a party;

(cy)It has obtained or will obtain within 90 days from the Closing Date, all legally required, governmental or third Person consents, approvals ( and CFIUS Clearance shall have been obtained prior to the Closing Date) and authorizations necessary for the valid signing, delivery and performance of this Agreement and all of the contracts and documents referred to in this Agreement to which it is a party, and this Agreement shall constitute legal, valid and binding obligations of it, enforceable against it in accordance with its terms;

(cz)Neither the signing and performance of this Agreement nor the consummation of the transactions contemplated hereby shall violate, result in a breach of any material term or provision of, or constitute a default under, any articles of association or any contract, agreement, law or regulation to which it is a party or by which it is bound; and

(da)There is no lawsuit, arbitration or other legal proceeding pending or threatened against it with respect to the subject of this Agreement or that would affect in any way its ability to enter into or perform this Agreement.

10.2AHK hereby represents and warrants to the Investors that AHK and/or its Affiliates shall have the power and right to license to the Company all the Licensed Items (collectively “Licensed Items”) pursuant to the technology collaboration and license agreement which has been duly executed and delivered by the Company and AHK in January 20th, 2022 (the "Technology License Agreement”). To the knowledge of AHK, entrance into and performance of the Technology License Agreement has not and will not violate or infringe upon any other entity’s right relating to the Licensed Items.

ARTICLE 11 ADDITIONAL COVENANTS

11.3Non-Competition

Following the Closing Date, until the earlier of the expiry of the Term or early termination of this Agreement pursuant to its terms, without the prior written approval of the Investing Parties, AHK, AHK’s worldwide Affiliates, and Management Co shall not operate or conduct any business that competes directly with the automotive SoC business (which is namely the design and delivery of entire SoCs or entire SoC platforms)

			
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of the Company and its subsidiaries, including but not limited to establishing a joint venture with any third party, or entering into a strategic cooperation agreement.

Absent the express prior written permission of AHK and AHK’s applicable Affiliates, the Company shall not directly or indirectly enter or enable or cause third parties to enter, in any way, the interconnect IP and/or interchip link licensing business.

The Key Employees shall devote their full working time to the conduct and development of the business of the Company, protecting the interest of the Company. Without the prior written approval of all the Investing Parties, no Key Employee or his/her affiliates or family members shall, directly or indirectly, own, manage, operate, conduct, consult, render services for, or participate in any entity whose business may compete with the business of the Company.

11.4Export Control

Upon the execution of this Agreement, the Parties shall collaborate with each other to conduct an initial analysis on whether the Company’s technologies and products are subject to any export control requirements. In the event that the initial analysis indicates so, the Parties shall discuss in good faith for a viable solution.

ARTICLE 12 TERM AND TERMINATION OF THE COMPANY

12.5Term of the Company

The term of the Company shall be twenty (20) years (“Term”) from the Establishment Date.

12.6Events of Termination

(db)This Agreement will terminate automatically upon expiration of the Term.

(dc)This Agreement may be terminated prior to the expiry of the Term (absent mutual agreement by the Lead Investor and AHK under separate written agreement):

(i)by the Parties upon their mutual agreement; or
(ii)by Investor D, Investor E and/or Investor F, if the Closing Conditions set forth under Section 3.1 shall have not been satisfied or waived in writing by such Investor on or before October 31, 2022, provided that if not all the Investor D, Investor E and Investor F elect to terminate this Agreement, this Agreement shall remain effective and binding upon the remaining investors and the other Parties; or
(iii)by AHK, if all Closing Conditions have been satisfied or waived on or before October 31, 2022 but the Investor D, Investor E and/or Investor F fail to fund and transfer their Capital Contribution Amount to the Company’s bank account; provided that this (iii) shall not apply if another Investor(s) acceptable to AHK funds and transfers a Capital Contribution Amount making up for aggregate unfunded Investor obligations.

12.1Shareholders’ Meeting to Discuss Termination and Dissolution

(c)Upon the occurrence of any of the events of termination enumerated in Section
12.2 above, any Party may request that a meeting of the Shareholders’ Meeting be convened to discuss the termination of this Agreement. The Board must convene

			
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a meeting of the Shareholders’ Meeting within ten (10) days of the receipt of that request in accordance with the provisions regarding Shareholders’ Meeting.

(d)At the meeting of the Shareholders’ Meeting, if the Shareholders are unable to reach any other solution acceptable to the Shareholders, the Shareholders may vote to dissolve and liquidate the Company.

12.7Dissolution due to Termination

Upon a termination pursuant to Sections 12.2 and 12.3 above, the Company shall be liquidated and dissolved, and the Shareholders shall liquidate the Company in accordance with ARTICLE 13, the applicable PRC Laws and the provisions of this Agreement.

ARTICLE 13 DISSOLUTION AND LIQUIDATION

13.4Liquidation Committee

(a)If the Company is to be liquidated in accordance with Section 12.4, the Parties shall establish a liquidation committee (“Liquidation Committee”) pursuant to PRC Laws. The costs and expenses of the Liquidation Committee shall be paid by the Company.

(b)Upon completion of the liquidation of the Company, the Liquidation Committee shall prepare a liquidation report, which shall be submitted to the Shareholders’ Meeting for confirmation, and the Company shall then complete the de- registration procedures with the Registration Authority.

13.1Principles of Liquidation

The Liquidation Committee shall conduct an overall inspection and stock take of the Company’s assets, creditors’ rights and liabilities, prepare a balance sheet and assets inventory, put forward the basis on which the Company’s assets are to be valued and computed, and apply the assets of the Company to satisfy the Company’s liabilities. Thereafter, the remaining assets of the Company shall be distributed to the Parties in accordance with Section 1 of Schedule 1; provided, however, that any cash or assets to be distributed to the Breaching Party shall be used with priority to pay for the damages payable by the Breaching Party to the non-breaching Party.

13.2Survival

In case of a termination of this Agreement, none of the Parties shall be relieved from any obligation and responsibilities towards the Company or the other Party until the date of the resolution of the Shareholders’ Meeting to liquidate the Company.

ARTICLE 14 INDEMNIFICATION

14.3Indemnification for Breach

			
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If a non-breaching Party (or both) (“Indemnitees”) suffers any expense, liability or loss, (including lost profits of the Company but excluding any other indirect or consequential losses of any nature) as a result of a breach of this Agreement, the breaching Party (“Indemnifying Party”) shall indemnify and defend the one or more Indemnitees against all demands, claims, Proceedings, and losses, including third-party claims.

14.4Damages for Breach

Each Party acknowledges that any breach of the covenants contained in this Agreement would cause irreparable injury so that damages and remedies under PRC Law for any breach of any such covenant would be inadequate. The remedies provided under this Article 14 will be non-exclusive and the Indemnitees will be free to pursue all remedies available at Law or otherwise against the Indemnifying Parties, including for injunction and liquidated damages.

ARTICLE 15 GOVERNING LAW AND DISPUTE RESOLUTION

15.5Applicable Law

The formation, validity, interpretation, execution of this Agreement and settlement of any Disputes arising hereunder shall be governed by and in accordance with the PRC Laws.

15.6Dispute Resolution

Any dispute, controversy or claim arising under or relating to this Agreement, or any breach hereof (collectively the “Disputes”) shall be resolved through amicable negotiation by the Parties. If the Dispute is not resolved through negotiation within thirty
(30) days of its occurrence, any Party may submit the Dispute to arbitration in accordance with the provisions of Section 15.3.

15.7Arbitration

(c)Any Dispute that is not resolved in accordance with Section 15.2 shall be settled by final arbitration binding upon the Parties in Shanghai at the Shanghai International Economic and Trade Arbitration Commission by an arbitration tribunal in Shanghai, China in accordance with the then effective arbitration rules of the Shanghai International Economic and Trade Arbitration Commission.

(d)The arbitration proceedings shall be conducted in English and Chinese, using qualified translators. The Parties shall use their best efforts to effect the prompt execution of any such award and shall render whatever assistance as may necessary to this end. The arbitral reward shall be enforced by any court of competent jurisdiction, if necessary.

(e)The losing Party shall be responsible for the costs of the Shanghai International Economic and Trade Arbitration Commission, the fees of the arbitrators, fees and expenses of the arbitration proceedings and all costs and expenses in relation to the enforcement of any arbitral award, including reasonable attorneys’ fees and expenses.

			
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15.1Continued Performance

During the period when a Dispute is being resolved, the Parties shall continue to perform this Agreement except for the matters in dispute.

ARTICLE 16 MISCELLANEOUS PROVISIONS

16.12Effectiveness of this Agreement

This Agreement shall become effective and binding upon the Parties on the date of signing by duly authorized representatives of the Parties.

16.13Entire Agreement

This Agreement, together with the schedules and annexes, constitutes the entire agreement of the Parties with respect to the subject matter hereof, and shall supersede all previous oral or written agreements, contracts, letters of intent, undertakings and communications between the Parties with respect to the subject matter hereof. For the avoidance of doubt, Schedule 1 (Rights of the Investing Parties) under SHARE PURCHASE AND SHAREHOLDERS AGREEMENT dated on Feb 21st, 2022 among
Investor A, Investor B and Investor C and other relevant parties, shall be expressly superseded by Schedule 1 under this Agreement on and after the Closing Date.

16.14Language

This Agreement is written in English, with a Chinese translation. The languages will be interpreted consistently. The English language will prevail if strictly necessary to make a final interpretation.

16.15Amendment

Any amendment to this Agreement shall come into force only after a written agreement is signed by the duly authorized representatives of each of the Parties.

16.16Severability

If any term or provision of this Agreement shall be held to be invalid or unenforceable in whole or in part under any applicable law, it shall be excluded from this Agreement (to the extent of such invalidity or unenforceability only), and all other terms and provisions of this Agreement shall continue to be in full force and effect. Under such circumstances, the Parties shall use their best efforts to implement both the letter and spirit of this Agreement and replace the invalid or unenforceable term or provision with a valid and enforceable term or provision that corresponds as far as possible to the spirit and purpose of the invalid or unenforceable term or provision.

16.17Parties in Interest

This Agreement shall be binding on and inure to the benefit of the Parties and to their respective successors and administrators, as well as to their assigns where a Party’s interests in the Company are assigned in accordance with law and the terms and conditions hereof.

			
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16.18Costs and Expenses

Any costs, expenses or fees of any nature incurred by a Party in connection with the preparation and execution of this Agreement and the Articles of Association shall be borne by the incurring Party; provided further that, the Company shall at its own cost make any notification to or filing to the Registration Authority for filings and registrations with respect to the Capital Increase and the updated Articles of Association (as required by the PRC Laws) contemplated by this Agreement. Amounts approved by the Board may in connection with such approval, be auditable by the Board.

16.19Waiver

No delay or failure by a Party to this Agreement to exercise any of its powers, rights or remedies under this Agreement shall be construed as a waiver of any of them, nor shall any single or partial exercise of any such powers, rights or remedies preclude any other. Any waiver by a Party of any provision of this Agreement shall not be construed as a waiver of any other provisions of this Agreement, nor shall such waiver be construed as a waiver of such provision with respect to any other event or circumstances, whether past, present or future. Further, the remedies provided in this Agreement are cumulative and not exclusive of any provided by law.

16.20No Agency

Nothing in this Agreement shall be construed so as to constitute a Party the agent or partner of another Party. On no account may a Party create (or hold itself out to third Person as being able to create) any binding obligation on behalf of another Party without the prior written consent of such other Party.

16.21Notices

Communications between the Parties, notices and documents of the Board and the Shareholders’ Meeting and such other notices and financial reports of the Company as provided for herein shall be sent to each of the Parties and to the Company at their respective addresses set forth below, in each case by (i) personal delivery, (ii) prepaid airmail, (iii) prepaid air courier, or (iv) email. All such notices shall be deemed to have been given or received (i) upon receipt if personally delivered, (ii) on the tenth (10th) day after it is sent if delivered by airmail, (iii) on the fifth (5th) day after delivery to an internationally recognized courier service if delivered by air courier, (iv) twenty-four (24) hours following transmission by facsimile with confirmed successful answer back, if delivered by facsimile, and (v) upon receipt on the email system of the receiving Party, if delivered by email.

(f)In the case of AHK to:

Arteris HK Limited

Address: 26/F Three Exchange Square 8 Connaught Place Central Hong Kong Attention: K. Charles Janac
Email [***]

(g)In the case of SME (Investor A) to:

			
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SME Development (Shaoxing) Venture Fund, LLP 中小企业发展基金(绍兴)股权投资合伙企业(有限合伙)

Address: 11th Floor, Building 1, No. 1158 Zhangdong Road, Pudong New Area, Shanghai, P.R. China

Attention: Mr. Cangbo Zhao; Mr. Sen Zhao

Email: [***]

(h)In the case of Luojia (Investor B) to:

Jiaxing Luojia Chuangzhi Investment Partnership Enterprise (Limited Partnership) 嘉兴珞珈传智股权投资合伙企业(有限合伙)

Address: 26th Floor, Block A, Poly Plaza, No. 99 Zhongnan Road, Wuchang District, Wuhan, Hubei Province, P.R. China

Attention: Mr. Geng Lin; Ms. Huan Guo

Email: [***]

(i)In the case of Guinie (Investor C), to:

Gongqing City Guinie Zhuyu No. 3 Investment Partnerhip (Limited Partnership) 共青城圭臬珠玉三号投资合伙企业(有限合伙)

Address: Room 1703, Block B, Jinhui Global Center, Gong-jian Road, Yanta District, Xi 'an, Shaanxi Province, P.R. China

Attention: Zixi Yao

Email: [***]

(j)In the case of Management Co to:

Ningbo    Transchip    Information    Consulting    Partnership    (Limited Partnership) 宁波传智驿芯信息咨询合伙企业(有限合伙)

Address: 107-6, 1F, No. 69, Dagang Second Road, Xinqi street, Beilun District, Ningbo City, Zhejiang Province, P.R. China

Attention: Zheng Wu

Email: [***]

(k)In the case of Arteris Nanjing to:

			
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Arteris Semiconductor Technology (Nanjing) Co., Ltd. 安通思半导体技术(南京) 有限公司

Address: Room 1821, Fuying Building, No. 99, Tuanjie Road, Yanchuang Park, Jiangbei New Area, Nanjing, Jiangsu Province, P.R. China

Attention: K. Charles Janac Email: [***]

(l)In the case of the Company to:
TransChip Technology (Nanjing) Co., Ltd. 传智驿芯科技(南京)有限公司
Address: Room 2307, Fuying Building, No. 99, Tuanjie Road, Yanchuang Park, Nanjing area, China (Jiangsu) pilot Free Trade Zone, P.R. China

Attention: Zheng Wu

Email: [***]

(m)In the case of the Investor D to:

Jiaxing Catalpa Huixin Investment Partnership Enterprise (Limited Partnership) 嘉兴梓禾惠芯股权投资合伙企业(有限合伙)

Address: Room 2201, Block B, 288 Jiahui Street, Yinzhou District, Ningbo, Zhejiang Province, P.R. China

Attention: Xin Zheng

Email: [***]

(n)In the case of the Investor E to:

Gongqing City Guinie Zhuyu No. 5 venture capital partnership (limited partnership) 共青城圭臬珠玉五号创业投资合伙企业(有限合伙)

Address: Room 1703, Block B, Jinhui Global Center, Gong-jian Road, Yanta District, Xi 'an, Shaanxi Province, P.R. China

Attention: Zixi Yao

Email: [***]

(o)In the case of the Investor F to:

Huzhou    Hangxin    Rongxie    Equity    Investment    Partnership    (Limited partnership) 湖州航信荣协股权投资合伙企业(有限合伙)

Address: Room 2010, Beichen Times Building, No. 8 Beichen East Road, Chaoyang District, Beijing

			
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Attention: Yang Hu

Email: [***]

During the term of this Agreement, any Party may change its address from time to time, provided that the other Parties will be notified in writing of that change promptly.

16.1Publicity

No Party shall make any declarations, announcements, or disclosures to the public with respect to this Agreement without the prior written consent of the other Parties.

16.2Logo Usage

Names and logos of Investors shall not be used by other Parties to this Agreement absent the prior consent of the applicable Investor.
			
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Arteris HK Limited

By: /s/ K. Charles Janac    
Name: K. Charles Janac
Title: Authorized Representative

			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

SME Development (Shaoxing) Venture Fund, LLP
中小企业发展基金(绍兴)股权投资合伙企业
(有限合伙)

By: /s/ Mr. Sen Zhao    
Name: Mr. Sen Zhao
Title: Representative Delegated by its General Partner
			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Jiaxing Luojia Chuangzhi Investment Partnership Enterprise (Limited Partnership)嘉兴珞珈传智股权投资合伙企业(有限合伙)

By: /s/ Mr. Geng Lin    
Name: Mr. Geng Lin
Title: Representative Delegated by its General Partner

			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Gongqing City Guinie Zhuyu No. 3 Investment Partnership (Limited Partnership)
共青城圭臬珠玉三号投资合伙企业(有限合伙)

By: /s/ Mr. Zixi Yao    
Name: Mr. Zixi Yao
Title: Representative Delegated by its General Partner

			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Arteris Semiconductor Technology (Nanjing) Co., Ltd. 安通思半导体技术(南京)有限公司

By: /s/ K. Charles Janac    
Name: K. Charles Janac Title: Legal Representative

			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Ningbo    Transchip    Information    Consulting Partnership (Limited Partnership)
宁波传智驿芯信息咨询合伙企业(有限合伙)

By: /s/ Mr. Zheng Wu    
Name: Mr. Zheng Wu
Title: Representative Delegated by its General Partner
			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Transchip Technology (Nanjing) Co., Ltd.
传智驿芯科技(南京)有限公司

By: /s/ Zheng Wu    
Name: Zheng Wu
Title: Legal Representative
			
	Signature page to the Share Purchase and Shareholders Agreement

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Jiaxing Catalpa Huixin Investment Partnership Enterprise (Limited Partnership)
嘉兴梓禾惠芯股权投资合伙企业(有限合伙)

By: /s/ Mr. Xin Zheng    
Name: Mr. Xin Zheng
Title: Representative Delegated by its General Partner

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Gongqing City Guinie Zhuyu No. 5 venture capital partnership (limited partnership)
共青城圭臬珠玉五号创业投资合伙企业(有限合伙)

By: /s/ Mr. Zixi Yao    
Name: Mr. Zixi Yao
Title: Representative Delegated by its General Partner

			
	

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives, duly authorized hereunto, on the date first above written.

Huzhou Hangxin Rongxie Equity Investment Partnership (Limited partnership)
湖州航信荣协股权投资合伙企业(有限合伙)

By: /s/ Mr. Yang Hu    
Name: Mr. Yang Hu
Title: Representative Delegated by its General Partner

			
	

Schedule 1    Rights of the Investing Parties

1.Liquidation Preference

1.1In the event of any Liquidation Event (as defined below), all assets and funds legally available for distribution to the Shareholders shall be distributed as follows:

(a)FIRST, prior to and in preference to any distribution of any of the assets and funds to any Shareholders other than the Investing Parties that made Capital Contributions, each Investing Party that made Capital Contributions shall be entitled to receive an amount, the price per unit of equity of which is equal to the Investing Party Purchase Price, plus a simple interest rate of 8% per annum from the date of the Closing until the full payment of the total liquidation preference amount, plus declared but unpaid dividends on the equity interests held by such Investing Party (the “Liquidation Preference”);

(b)SECOND, the remaining assets and funds legally available for distribution to the Shareholders shall be distributed ratably among all the Shareholders (including the Investing Parties) in proportion to the equity interests held by them.

A “Liquidation Event” shall be deemed to have occurred upon: (a) liquidation, dissolution or winding up of the Company, (b) any consummated merger, amalgamation, acquisition, or other business combination in which the Shareholders owning a majority of the voting power or voting stock of the Company immediately prior to such transaction do not own a majority of the voting power or voting stock of the Company, or (c) any sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole).

1.2In the event of any new equity financing by the Company after the Closing Date in which any new investor is entitled to receive a liquidation preference equal to the investment amount paid by such new investor, plus declared but unpaid dividend on the equity interests held by such new investor and further plus annual interest at a certain interest rate ("New Investor’s Interest Rate”), then the Investing Party’s Liquidation Preference hereof shall be automatically amended and equal to an amount, the price per unit of equity of which is equal to the Investing Party Purchase Price, plus declared but unpaid dividends on the equity interests held by such Investing Party, and further plus an annual interest at the New Investor’s Interest Rate.

2.Dilutive Issuance

2.1Dilutive Adjustment. If at any time, the Company issues or sells any additional Registered Capital to any third party for a per-unit consideration that is less than the Investing Party Purchase Price (“Dilutive Issuance”), then simultaneously with or immediately after such issuance or sale of additional Registered Capital, an Investing Party shall be entitled to require the Company to issue to such Investing Party an additional number of units of Registered Capital determined by the following formula (as calculated below, “Dilutive Equity”):

Dilutive Equity = (Investing Party Registered Capital × IPP1 ÷ IPP2) – Investing Party Registered Capital

For the purposes of the foregoing formula, the following definitions will apply:

(a)“Investing Party Registered Capital” means the total units of Registered Capital held by the Investing Party immediately prior to the Dilutive Issuance;
(b)“IPP1” means the Investing Party Purchase Price in effect immediately prior to the Dilutive Issuance;

			
	

(a)“IPP2” means the Investing Party Purchase Price in effect immediately after the Dilutive Issuance as determined through the following formula:

IPP2 = IPP1* (A + B) ÷ (A + C)
In this formula:
“A” means the total number of units of all Registered Capital immediately prior to the Dilutive Issuance;
“B” means the number of units of Registered Capital that would have been issued if the New Equity had been issued at the Investing Party Purchase Price; and
“C” means the total number of units of New Equity issued in the Dilutive Issuance.

1.3Deemed Issuances of Registered Capital. In the case of the issuance of any option, the following provisions will apply for all purposes of this Section 2:

(a)The aggregate maximum number of units of Registered Capital deliverable upon exercise of any option will be deemed to have been issued at the time such option was issued, and for consideration equal to the consideration, if any, received by the Company upon the issuance of such option, plus the minimum exercise price provided in such option for number of units of Registered Capital covered thereby.
(b)If there is any change in the number of units of Registered Capital deliverable, or in the consideration payable to the Company, upon exercise of such option, including a change resulting from the Dilutive Issuance provisions thereof, the Investing Party Purchase Price, to the extent that it is in any way affected by or computed using such option, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of units of Registered Capital or any payment of such consideration upon the exercise of any such option.
(c)Upon the expiration or termination of any such option, the Investing Party Purchase Price shall, to the extent in any way affected by or computed using such option, be recomputed to reflect the issuance of only the number of units of Registered Capital actually issued upon the exercise of such option.

3.Transfer of Equity Interest

3.1Transfer Restrictions. Without the prior written consent of the Lead Investors, within two
(2) years of the Closing Date, neither AHK nor Management Co. may, directly nor indirectly, sell or transfer any equity interest in the Company (including but not limited to, transfer of the equity interest or its right of entitlement, issuance of any securities that may result in the transfer of the equity interest or its right of entitlement, entering into any arrangement that may result in change of control of the entity holding the equity interest in the Company, or creation of any trust, pledge or other arrangement over the equity interest or its right of entitlement that may result in change of control of the entity holding the equity interest in the Company), pledge any equity interest in the Company or otherwise create any third party rights on the equity interest of the Company. Notwithstanding the above and Section 3.2 below, a Shareholder may transfer any or all of its equity interest in the Company to any of its Affiliates, and each Shareholder hereby irrevocably consents to and shall cause the Director(s) nominated by it to the Board to vote in favor of, such transfer. If any Shareholder transfers its equity interest in the Company in accordance with provisions of this Agreement and the Articles of Association, the assignee (including Affiliates of any Party) shall accept all terms and conditions of this Agreement in writing, unless otherwise agreed in writing between the assignee and the other Parties.

3.2Rights of First Refusal

(a)Subject to Section 3.1 above, if any Shareholder other than the Investing Parties (each, “Transferring Party”) wish to transfer all or portion of its equity interests in

the Company (“Transfer Equity”) to any third party that is not a Shareholder (“Proposed Transferee”), the Transferring Party shall first offer the Transfer Equity to the Investing Parties.

(d)To offer the Transfer Equity to the Investing Parties, the Transferring Party shall deliver a written notice to each Investing Party containing the following (“Transfer Notice”):

(i)the amount of the Transfer Equity;
(ii)a cash price per unit of Registered Capital at which the Transfer Equity will be transferred;
(iii)the identity of the Proposed Transferee;
(iv)a summary of the terms of purchase put forward by the Proposed Transferee, including details of the nature and amount of the consideration and the date on which it would be payable; and
(v)whether the Transferring Party’s offer is conditional on acceptances being received for all (or any other specified percentage) of the Transfer Equity.

(a)Within 20 Business Days after receiving the Transfer Notice, an Investing Party may purchase up to its pro rata share of the Transfer Equity on the terms set out in the Transfer Notice. The pro rata share of the Transfer Equity shall be equivalent to the product obtained by multiplying the Transfer Equity, by a fraction, of which the amount of the Registered Capital that has been contributed by the exercising Investing Party shall be the numerator and the total amount of the Registered Capital that has been contributed by all exercising Investing Parties shall be the denominator. A notice indicating an Investing Party’s acceptance of such offer will be irrevocable, and will give rise to a legally binding agreement between the Transferring Party and the exercising Investing Party.

(b)If any Investing Party chooses not to purchase its entire pro rata share of Transfer Equity, then the entire un-purchased Transfer Equity (“Remaining Transfer Equity”) will be offered to the Investing Parties that have elected to purchase their respective entire pro rata share of Transfer Equity (“Second ROFR Holder”). The Transferring Party shall deliver a written notice to the Company and each Second ROFR Holder to inform them of the number of the Remaining Transfer Equity that are available for purchase (“Second Transfer Notice”). The Second Rights Holder will have 10 Business Days after receiving the Second Transfer Notice to irrevocably elect to purchase all or a portion of the Remaining Transfer Equity at the same price per unit and subject to the same terms and conditions as described in the Transfer Notice by notifying the Transferring Party and the Company in writing of the number of units of Remaining Transfer Equity to be purchased.

(c)If an Investing Party or Second ROFR Holder elects to purchase any Transfer Equity, the Investing Party or Second ROFR Holder shall pay for the Transfer Equity by wire transfer in immediately available funds of the appropriate currency, against delivery of such Transfer Equity to be purchased, at a place and time agreed by the Transferring Party and the Investing Party or Second ROFR Holder that has elected to purchase the Transfer Equity, provided that the scheduled time for closing may not be later than 20 Business Days following the date on which the Investing Party or Second ROFR Holder notified the Transferring Party of its desire to purchase the Transfer Equity.

(d)If the non-transferring Parties fail to timely elect to purchase the entire Transfer Equity, then the Transferring Party may transfer all, but not less than all of the

			
	

remaining portion of the Transfer Equity to the Proposed Transferee, on the terms set forth in the Transfer Notice. Any such transfer to the Proposed Transferee must be completed within 90 days after the date of the Transfer Notice or the requirements and procedures relating to the Right of First Refusal must be re-initiated with respect to such transfer; provided, that the above 90-day period shall not include the time for obtaining any government approvals required for the transfer.

(b)Each Investing Party or Second ROFR Holder may freely assign its rights of first refusal to any of its respective Affiliates at any time.

1.2Tag Along Rights

(c)If an Investing Party does not wish to execute its right of first refusal under Section 3.2 above, the Investing Party will have 20 Business Days after the date of the Transfer Notice to irrevocably elect to sell up to its Tag Along Share of any Transfer Equity proposed to be transferred by the Transferring Party at the same price and subject to the same terms and conditions as described in the Transfer Notice (“Tag Along Right”) by notifying the Transferring Party and the Company in writing of the amount of Transfer Equity to be sold (“Tag Along Equity”).

(d)The sale of the Tag Along Equity to the Proposed Transferee by the Investing Party will be consummated simultaneously with the sale by the Transferring Party. To the extent that any Proposed Transferee refuses to purchase any Tag Along Equity, the Transferring Party shall not sell to such Proposed Transferee any Registered Capital until, simultaneously with such sale, the Proposed Transferee purchases from the Investor such Tag Along Equity that the Investor would otherwise be entitled to sell to the Proposed Transferee pursuant to its Tag Along Right.

(e)The Investing Party’s “Tag Along Share” will be determined according to the amount of all units of Registered Capital held by the Investing Party on the date of the Transfer Notice in relation to the total amount of all units of Registered Capital held by the Transferring Party.

1.1Further Assistance

(f)If any Shareholder proposes to transfer any of its Registered Capital under this Section 3 of Schedule 1, and the relevant procedures above have been completed, each Shareholder shall consent to the transfer and take any actions and execute any documents reasonably requested by the Transferring Party to evidence such agreement and to effect the transfer of the Transfer Equity (and Tag Along Equity, if applicable).

(g)All relevant parties to any transfer of the Registered Capital shall promptly enter into one or more equity transfer agreements setting forth the details of the transaction in question. Within 10 Business Days after the date on which the sale of the Transfer Equity (and the Tag Along Equity, if applicable) is closed, the Parties shall make all necessary amendments to this Agreement, the Articles of Association and any other documents of the Company, and undertake any necessary filings with applicable Governmental Authority to reflect the concluded transfer.

(h)For the avoidance of doubt, each Shareholder shall, and shall cause the Company to, promptly execute all such further documents and perform all such further acts as the Transferring Party, the Investing Party or the Proposed Transferee (or any combination of them) may reasonably require to formalize the transfer of Registered

Capital.

4.Right of Participation

4.1General. If the Company wishes to increase the Registered Capital in accordance with the terms and conditions of this Agreement, the Articles of Association or PRC Law, then the Investing Parties (“Preemptive Rights Holders”) will each have the right (“Preemptive Rights”) to subscribe for its pro rata share of the increased Registered Capital (“Issuance Equity”).

4.2Issuance Notice. If the Company proposes to increase its Registered Capital, it shall deliver a written notice to the Preemptive Rights Holders containing the following information (“Issuance Notice”):
(i)the amount of the Issuance Equity;
(j)the cash price per unit of Registered Capital at which the Issuance Equity will be issued; and
(k)a summary of the terms of subscription for the Issuance Equity.

4.9Notice to Exercise. Each Preemptive Rights Holder will have 30 Business Days after receipt of the Issuance Notice to agree in writing to purchase up to the Preemptive Rights Holder’s pro rata share of the Issuance Equity for the price and upon the terms and conditions specified in the Issuance Notice by giving written notice to the Company and stating in the notice the quantity of Issuance Equity to be purchased. If a Preemptive Rights Holder does not respond in writing within the 30-Business Day period, then the Preemptive Rights Holder will be deemed to have abandoned the purchase of that part of its pro rata share of such Issuance Equity.

4.10Over-Allotment. If any Preemptive Rights Holder chooses not to purchase its entire pro rata share of Issuance Equity, then the entire un-purchased Issuance Equity will be offered to the Investing Parties that have fully exercised their Preemptive Rights. The Company shall deliver a notice to the Investing Parties that have fully exercised their Preemptive Rights to inform the remaining number of units of Registered Capital that are available for purchase (“Over-Allotment Issuance Equity”). The Investing Parties that have fully exercised their Preemptive Rights will have 10 Business Days after receiving the notice to irrevocably elect to subscribe all or a portion of the Over-Allotment Issuance Equity at the same price per unit and subject to the same terms and conditions as described in the Issuance Notice by notifying the Company in writing of the number of units of Over-Allotment Issuance Equity to be purchased.

4.11Sale by the Company. Any remaining Issuance Equity and Over-Allotment Issuance Equity (as the case may be) not purchased by the Preemptive Rights Holders in accordance with Sections 4.1 to 4.4 of this Schedule 1 will fall under the control of the Board and may be offered for sale to third party purchasers according to the exact price, terms and conditions set forth in the Issuance Notice for a period of three months, calculated from the date of the Issuance Notice. If the Company does not complete the sale of remaining Issuance Equity and Over- Allotment Issuance Equity (as the case may be) within such 90-day period, the right of participation provided in this Section 4 in respect of such Issuance Equity and Over-Allotment Issuance Equity (as the case may be) shall be deemed to be revived and such equity interests of the Company shall not be offered to any person unless first re-offered to the Preemptive Rights Holders in accordance with this Section 4.

4.12Exceptions. The Preemptive Rights Holders will not have any Preemptive Rights with respect to: (a) any increase of Registered Capital or any options issued pursuant to the ESOP or any other compensation plan that is related to the equity of the Company, or any increase of Registered Capital undertaken pursuant to options approved by the Board; (b) any increase in Registered Capital in connection with an acquisition or merger of equity or business of any

other entity that is approved by the Board; (c) any increase in Registered Capital from the conversion of profits or reserved capital of the Company that is approved by the Board; or (d) any New Equity issued in the event of any share conversion, dividend or split upon restructuring into a joint stock corporation (as approved by a Shareholders’ Meeting of the Company), or any securities or equivalents issued upon the public offering of shares of the Company in the PRC or an offshore stock market approved by the Board.

1.4Consideration. In the case of the issuance of increased Registered Capital for cash, the consideration will be deemed to be the amount of cash received by the Company. In the case of the issuance of increased Registered Capital for non-cash consideration, in whole or in part, the non-cash consideration will be deemed to be the fair market value thereof, as determined by the Board, irrespective of any accounting treatment.

5.Drag-along Right.

5.1General. If AHK and at least one (1) Lead Investor (collectively, the “Drag-Along Holder”) consent to an acquisition or sale of the Company by merger, sale of more than fifty percent (50%) of the Registered Capital of the Company, sale of all or substantially all of the assets or business of the Company or otherwise, in which the pre-investment valuation of the Company shall not be less than the higher of (i) 1 billion RMB, and (ii) the latest post- investment valuation of the Company at that time (the “Approved Sale”) to a third-party potential purchaser (the “Potential Purchaser”) at any time after the second anniversary of the Closing date, then upon written notice from the Drag-Along Holder, each of other shareholders of the Company (the “Dragged Holders”) shall, (i) vote, or give its written consent with respect to, all Registered Capital held by them in favor of the Approved Sale; (ii) sell, transfer, and/or exchange, as the case may be, all Registered Capital held by them in such Approval Sale on the same terms to such Potential Purchaser; (iii) execute and deliver such instruments of conveyance and transfer, and (iv) take all actions reasonably necessary to consummate the proposed Approved Sale. If any Dragged Holder does not elect to vote, or give its written consent with respect to, all Registered Capital held by them in favor of the Approved Sale, such Dragged Holder shall be obligated to purchase all Registered Capital held by the Drag-Along Holder at the same price and terms offered by the Potential Purchaser within thirty (30) days from the date of failure to vote or give its written consent of such Approved Sale by the Dragged Holder. Notwithstanding any provision to the contrary, the restriction on transfer under Section
3.1 of this Schedule 1 shall not apply to any transfer made pursuant to this Section 5 of this Schedule 1.

5.2Representation and Undertaking. Any such sale or disposition by the Dragged Holders shall be on the terms and conditions as the proposed Approved Sale by the Potential Purchaser. Each Dragged Holder shall be required to make customary and usual representations and warranties in connection with the Approval Sale. Each Dragged Holder undertake to obtain all consents, permits, approvals, orders, authorizations or registrations qualifications, designations, declarations, or filings with any governmental authority or any third party, which are required to be obtained or made in connection with the Approved Sale.

5.3Drag-Along Notice. Prior to making any Approved Sale in which the Drag-Along Holder wishes to exercise its right under this Section 5 of Schedule 1, the Drag-Along Holder shall provide the Company and the Dragged Holders with written notice (the “Drag-Along Notice”) at least thirty (30) days prior to the proposed closing date of the Approved Sale (the “Approved Sale Date”). The Drag-Along Notice shall set forth (i) the name and address of the Potential Purchaser; (ii) the proposed amount and form of consideration to be paid, and the terms and conditions of payment offered by the Potential Purchaser; (iii) the Approved Sale Date; (iv) the number of units of the Registered Capital held of record by the Drag-Along Holder on the date of the Drag-Along Notice which form the subject to be transferred, sold or otherwise dispose

			
	

of by the Drag-Along Holder; and (v) the number of units of the Registered Capital held of record by the Dragged Holders to be included in the Approved Sale.

1.5Transfer Certificate. On the Approved Sale Date, each Dragged Holder shall deliver or cause to be delivered an executed instrument of transfer and/or a certificate (if required) representing and evidencing the number of units of the Registered Capital held by such Dragged Holder to be included in the Approved Sale, with all endorsement necessary for transfer to such Potential Purchaser in the manner and at the address indicated in the Drag-Along Notice.

1.6Payment. If the Drag-Along Holder or the Dragged Holders receive the purchase price for their number of units of the Registered Capital or such purchase price is made available to them as part of an Approved Sale and, in either case such party elects in writing not to deliver an executed instrument of transfer and/or a certificate (if required) evidencing the number of units of Registered Capital as described under this Section 5, they shall for all purposes be deemed no longer to be a shareholder of the Company, shall have no voting rights, shall not be entitled to any dividends or other distributions with respect to any number of units of the Registered Capital held by them, shall have no other rights or privileges as a shareholder of the Company. In addition, the Company shall stop any subsequent transfer of any number of units of Registered Capital held by such shareholder.

6.Most Favored Nation for this Transaction. AHK, Management Co and the Company hereby jointly and severally represent and warrant and covenant, from the Closing Date, that terms offered to any Person with respect to any amendment, settlement or waiver (each a “Settlement Document”) relating to the terms and conditions and transactions contemplated by this Agreement will not, taken as a whole, be more favorable to such Person than those of the Investors. If the previous sentence is demonstrated by a court of applicable jurisdiction to have been violated, this Agreement shall be, without any further action by the Investors or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Investors shall receive the benefit of the more favorable terms and conditions contained in such Settlement Documents. In the event that this Section 6 is triggered, AHK, Management Co and the Company jointly and severally agree, at their expense, to take such other actions (such as entering into amendments to this Agreement) as the Investors may reasonably request, in the form and substance reasonably acceptable to the Investors, to further effectuate this Section 6.

7.Right of Redemption

7.4General. Each Investor has the right of redemption to ask the Company to redeem all or part of shares held by it in the Company once any of the following events is triggered: (i) the Company’s failure to consummate a qualified IPO within six years after the Closing; (ii) the violation of non-competition clause by any Key Employee, AHK, the Management Co or AHK’s worldwide Affiliates; (iii) failure of the Company to own or use necessary IP for its business operation, whether attributable to the laws and rules of export control or the Company’s incompliance with other applicable laws; (iv) intentional, verified and uncured violation or breach by AHK under the Technology License Agreement.

7.5Good Faith Resolution Efforts; Redeem Price. Once any of the triggering events stated in this Section 7.1 occurs, (a) the relevant Investors will give written notice to the Company, and the relevant Investors and the Company will promptly thereafter for at least 60 days have regular good faith discussions and efforts to resolve such claim(s) that 7.1 was triggered, held by senior representatives of each party with authority to approve a resolution to such claim(s); and if the preceding (a) is unsuccessful despite such good faith discussions and efforts by the parties involved in such discussion and efforts, then (b) the Company shall redeem the Investor who exercises its right of redemption at the price per unit of equity of which is equal to the applicable Investor’s Investing Party Purchase Price, plus a simple interest rate of 8% per

annum from the date of the Closing until the full payment of the total liquidation preference amount, plus declared but unpaid dividends on the equity interests held by such Investor.

1.7Notice of Redemption Right. In case of any of events stated in this Section 7.1 is triggered, the Investor who intends to exercise its right of redemption, shall send a written notice to the Company no later than four (4) months from the date of the occurrence of the triggering events stated in this Section 7.1 (the “Notice Period of Redemption”).

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